Monday, July 26, 2021

VIETNAM PEPPER & SPICES MARKET UPDATE – WEEK 29

According to data from Vietnam Customs, in the first 15 days of July, Vietnam exported 14,320 tons of pepper, with a turnover of 52.7 million USD. Progressively from January 1st to July 15th, 2021, Vietnam exported 168,204 tons, total export turnover reached 548.8 million USD.

Vietnam facing with the serious development of the epidemic in many provinces and cities, the government has imposed social distancing, restriction, lockdown. Therefore, most export companies have focused on production and boosted exports for all order already signed with customers. It is forecasted that the export volume in July will reach approximately 28-30,000 tons, bringing the total export volume in 7 months reached 180 - 184,000 tons (same period last year reached 184,571 tons) although the business situation in the past month was very slow due to freight charges, booking, long holidays of the US / EU /Middle East...

Currently, the supply chain has been broken and the ability to supply pepper and other product for export has been seriously affected. Let's take a look at some notable news from the past time.

• After selling pepper after harvesting, now pepper materials are almost concentrated in households with good financial conditions. They only sell materials when absolutely necessary to cover temporary costs.

• Currently, households are also very limited in contact with and selling to agents /dealers due to / lockdown from the government as well as fear of epidemics situation.











Friday, July 23, 2021

BLACK PEPPER OUTLOOK: MID-YEAR REVIEW 2021

The report below was published by IPC and Namagro.
We believe it is very consistent and offers a very clear vision of the market which this year due to exceptional crisis cause by the COVID pandemic is very confused. 
MW
manager@peppertrade.com.br





Summary

# Aug/Sep period is period of convergence and is the only period with stock availability in all three major origins.

# We expect markets to align close to 3700/3800 USD/MT for 570 ASTA at an FOB Level.

# We expect EU to be back after holidays and book Indonesia and Brazil. 

# USA is expected to book new crop Vietnam and Q4 shipments from Brazil.

# Chinese demand could bring a squeeze suddenly. This may not happen in the next 15/30 days as Vietnam enters severe lock down.

# For MRL pass buyers are expected to turn to Brazil due to better freight rates

# Freights from Asia to NA/EU will remain firm.

# Overall activity in Vietnam is expected to be slow as stock at farm gate is lowest as compared to previous 2/3 years . 

# Downside is Demand from ME is expected to be slow as destination prices are lower than origin price 

# Fundamentally global demand for pepper remains strong with supplies not growing.

# Therefore any softness in the market should be seen as a buying opportunity.

----------------------------









Indonesia Price Outlook

Current price for ASTA Fob USD 4000/ MT
We expect prices to drop to 3800 USD/MT and align with Brazil to cover impact of freight
Slow Demand from traditional destinations will be countered by lower crop.
Unless Arbitrage improves Indonesia may not import from Vietnam.

Supply disruptions due to Covid are expected and market is inactive.
It is possible in the later part of the year prices rebound as China is uncovered and they would be aggressive in Vietnam and Indonesia.

Freights are not expected to reduce for next 3/4 months.

--------------------------------









Vietnam Price Outlook

Current price for ASTA Fob USD 3850/ MT
We do not expect prices to drop sharply.
Slow Demand from traditional destinations has been already factored in.
Unless Arbitrage improves Vietnam may not import from Brazil.
Supply disruptions due to Covid are expected and market is inactive.
It is possible in the later part of the year prices rebound as China is uncovered and they would be aggressive in Vietnam and Indonesia.

  • The origins processors especially ingredient factories, unlike previous years, have sold for 2022 and are carrying stocks. This means farmers have sold their produce much earlier and do not have much stock in hand.
  • This is evident by the fact that despite a lock down and poor fresh sales for the past 3 weeks prices of raw material is steady.

Freights are not expected to reduce for next 3/4 months.

-----------------------









Brazil Price Outlook

Current price for ASTA Fob USD 3900/MT
We expect prices for ASTA Fob should drop by 10% to USD 3600/MT
Drought and low crop is factored in.

Demand from non traditional destinations like ME will remain low.
Unless Arbitrage improves Vietnam may not import.
Supply disruptions due to Covid are not expected.

It is possible in the later part of the year prices rebound as China is uncovered and they would be aggressive in Vietnam and Indonesia.

Therefore,one can wait a little for the opportunity but being too pessimistic may not be wise.




Tuesday, June 29, 2021

VIETNAM PEPPER & SPICES MARKET UPDATE 28th JUNE 2021 - WEEK 26

 

PEPPER

 

Although the situation of freight rates and epidemics is still complicated, besides the lack of liquidity in the domestic market from exporters / collectors at different times. However, the market has had very strong gaining sessions in the past week with an increase of 4%. The main reason is that Vietnamese exporters actively buy raw material for June shipment. In addition, with a forecast quantity not less than 50,000 tons to be exported in the next 2 months, July and August, so farmers / dealer stock is now being too tight. Besides, the demand from different markets such as EU / USA / ASIA and China has also pushed up the domestic market. Thus, pepper prices in June have increased by 9.2% compared to May.




The market has gone through half of the crop of 2021 with a fluctuating but very steady increase since May. Therefore, farmers and dealers have a solid basis to believe that pepper prices will continue to increase in the second half of 2021 as different reasons that we have analyzed in the 24th week report.

 

Indonesia; The epidemic situation is still complicated and the harvest is expected to be come later than expected. Crop size is estimated to be poor and the quantity used for export in 2021 is forecasted only around 10 - 15,000 tons (Crop size around 30.000 tons max but huge domestic consumption already reached 15.000 tons). However, the situation of containers and freight from Indonesia is very stressful and it is difficult to get containers with high rates. Therefore, the price and time of shipment to abroad have not been fixed.

 

Brazil; The second crop of Brazil will start in end August / early September but quantity with max 25.000 tons. Prompt shipment still available but higher price compare with Vietnam. The Brazilian real Currency traded around 4.9 per USD in the fourth week of June, its highest level since June 2020, after latest data showed Brazilian consumer inflation surged in the first half of June, suggesting further monetary policy tightening, while the country's current account deficit was at its smallest in more than 13 years.

Therefore, it is likely that the price of pepper from Brazil will continue to increase in the near future when the local currency tends to appreciate quite strongly against the USD

(in contrast in 2019/2020).

 

With both the current Indonesia / Brazilian markets and max quantity of 2 these market for export around 50 - 60.000 tons for second half of the year 2021. The ability to import for re-production and export is not feasible in Vietnam now. Therefore, all Vietnam exporters / processors / traders will have to focus on buying domestic raw material for export.

 

 

SPOT market in ASIA & USA & EU; Material at the ports of destination continuously increase in price due to the increase rapidly in freight rates, consumption… This will also promote the price of raw materials in exporting countries to continue to firmer in the near future.

 

CASSIA/ STAR ANISE/ TURMERIC;

 

High demand coming from different countries while new crops are still in the next 3 more months. Stock being tight and price continuing firmer / uptrend is foreseen until August at least.

 








 



Wednesday, June 16, 2021

The Impact of Ocean Freight to Pepper Market

We got this important information from the last RGB Pepper Market Report

Since last year, deficiency in shipping containers alongside the growing port congestion issues have created an unfavorable impact and disruptions to all exporters particularly from Asia.

Routes that are mostly affected are shipments bound to USA and EU ports with rates that are
now up of about 438%- 950% respectively from our last noted rates in June 2020.

If before large exporters were having an advantage to plan shipments ahead of time with contracted rates
from carriers, nowadays situation is completely distorted. The reportedly China’s aggressive tactics to bring back empty containers became even more challenging for USA/EU exporters.

Europe specifically Hamburg port is having a severe congestion issue with major carriers that are now
compelled to re-route containers to other available EU ports such as Bremerhaven and Wilhelmshaven as end of carriage obligation.

The desperation to export goods abroad often leads seller to commit and booked premium rates just to
acquire containers. Current situation for June: Another GRI rates implementation on June 15 with a critical space availability on the demand that is currently exceeding the current supply.

Specifically in Brazil freight rates where little affected if any, until now, but it started increase from the beginning of this month.
Routes and availablity of vessels and containers where altered already before, with changes happening on already contracted and booked vessels and ports, causing delays and dificulties to plan shipment and arrivals.

 


 

Monday, June 14, 2021

 

PEPPER=WORLD MKT PRESENT SITUATION

 

According to the Customs data, in May 2021, Vietnam exported 27,963 tons, less 7.9% compared to May 2020. In the first 5 months from January 1st to May 31st , 2021 Vietnam has exported 121,338 tons with a turnover of $ 379.6 million, compared to the same period in 2020, the export volume decreased by 17.1%, but the export turnover increased by 23.0%.

 

-       The Americas with an increase in imports in the first 5 months reached 27,398 tons, up 0.4% over the same period. The US is the largest import market from Vietnam with 24,636 tons, down 0.4%.

 

-       Africa's imports down by 38.4%, of which Egypt decreased by 48.4% from 6,035 tons to 3,114 tons.

 

-       Asia's imports decreased by 25.1%, of which China was the second largest import of Vietnam, down 29.4% to 23,657 tons compared to the import volume of 33,508 tons in the same period. Some other markets also a decrease in imports such as India, the Philippines, Thailand, Saudi Arabia, Bangladesh and increased imports in the United Arab Emirates, Korea, Iran, Japan ...

 

-       European imports decreased by 4.1 % from Germany, Russia, Poland, Ukraine, Israel... Import volume increased in the UK, France, Ireland, Italy..

 

Based on the data pepper import and export situation in the past 3 years from 2018 - 2020. Let's look back and predict the possible scenarios in the coming time from June - December 2021;

 

 

No

Countries

2018

2019

2020

Average Quantity last 3 years

Imported First 5M 2021

Need cover  from June to December 2021

 

 

 

 

 

 

 

 

1

China

34,439

57,523

56,050

49,337

23,657

25,680

2

America

44,140

49,346

54,991

49,492

24,636

24,856

3

United Arab

9,781

10,359

13,040

11,060

7,317

3,743

4

India

20,441

20,039

12,598

17,693

5,984

11,709



108,801

137,267

136,679

127,582

61,594

65,988


 

No

Countries

2018

2019

2020

Average Quantity last 3 years

Imported First 5M 2021

Need cover from June to December 2021

 

 

 

 

 

 

 

 

1

Other Market

121,533

147,252

148,613

139,133

60,198

78,935

 

 

 

 

 

 

 

78,935

 

Which scenario will be happening?

 

Section

Scenario 1

Scenario 2

Scenario 3

Carryover (stock last few year 2019 – 2020)

50,000

40,000

40,000

Crop 2021

230,000

200,000

170,000

Total Import 2021

30,000

30,000

30,000

Exported in first 5 months

121,000

121,000

121,000

Domestic consumption

10,000

10,000

10,000

Lost weight when process white pepper

10,000

10,000

10,000

China / USA / UAE / INDIA need cover next 7 months

65,988

65,988

65,988

Other market need to cover from June to Dec 2021

78,935

78,935

78,935

Quantity available for next 7 months for other market

24,077

-15,923

-45,923

Possibility

50% ?

50% ?

0%

 


Whatever the scenarios happen or another scenario has not been mentioned. However, we can clearly see that the inventory volume of 2021 will decrease sharply and is expected to continue to decrease in 2022. Therefore, selling pressure from households / agents and exporters as very low will make pepper prices trend to continue to stabilize / increase in the short and medium term.

 

 

 

 

Pepper prices last week kept increasing momentum due to quite good demand from China and other countries such as the USA / EU / ASIA, especially big demand from Nepal / India. Although the situation of freight rates continues to increase and it is difficult to get containers along with the epidemic, it is still complicated. Rising freight rates have pushed raw material up. However, pepper prices still maintained a very strong upward momentum despite the above difficulties. The US and EU have gradually returned to normal activities, which has boosted consumption demand. The SPOT market in the US and EU were also recorded with a strong increase in demand in the past week.

 

 

IMPORT COUNTRIES IN FIRST 5 MONTHS

 

 

No

Countries

First 5M

First 5M

2021

TOTAL

+/- %

2019

2020

JAN

FEB

MARCH

APRIL

MAY

21/20

1

America

22,734

24,724

3,962

3,686

6,285

5,367

5,336

24,636

-0.4

2

China

36,038

33,508

2,756

1,403

7,347

7,425

4,726

23,657

-29.4

3

United Arab

6,070

5,424

1,098

657

2,125

1,994

1,443

7,317

34.9

4

Pakistan

6,906

6,261

363

418

2,758

1,701

1,078

6,318

0.9

5

India

12,365

7,517

767

891

1,341

1,107

1,878

5,984

-20.4

6

Germany

5,631

5,892

568

546

623

1,931

1,245

4,913

-16.6

7

Netherlands

3,949

3,380

585

271

928

760

892

3,436

1.7

8

Egypt

4,185

6,035

192

162

836

1,336

588

3,114

-48.4

9

Korea

2,951

2,742

290

191

522

901

1,009

2,913

6.2

10

England

1,883

2,443

543

387

534

696

471

2,631

7.7

11

Philippine

2,642

2,510

500

275

430

480

603

2,288

-8.8

12

France

720

1,254

50

361

411

715

671

2,208

76.1

13

Russia

2,095

2,902

274

219

414

571

708

2,186

-24.7

14

Turkey

1,896

2,099

241

303

412

789

375

2,120

1

15

Thailand

3,234

2,859

530

154

539

351

435

2,009

-29.7

16

Iran

2,990

1,835

349

265

355

458

554

1,981

8

17

Ireland

3,320

661

155

359

498

59

900

1,971

198.2

18

Canada

1,205

1,325

273

223

414

344

353

1,607

21.3

19

Japan

1,165

1,327

324

149

303

423

247

1,446

9

20

Poland

1,044

1,652

45

222

325

481

234

1,307

-20.9

21

Saudi Arabia

1,860

2,045

241

86

456

356

114

1,253

-38.7

22

Australia

861

825

282

202

253

189

316

1,242

50.5

23

Spain

1,124

1,148

202

147

168

410

194

1,121

-2.4

24

South Africa

1,433

1,012

284

157

273

260

126

1,100

8.7

25

Senegal

1,496

1,631

263

302

28

109

294

996

-38.9

26

Ukraine

660

819

51

49

72

252

261

685

-16.4

27

Bangladesh

478

1,069

69

 

309

213

75

666

-37.7

28

Israel

1,170

1,212

72

27

277

131

151

658

-45.7

29

Taiwan

450

491

52

66

123

286

126

653

33

30

Malaysia

658

509

84

93

122

144

178

621

22

31

Vietnam

202

300

98

35

84

76

279

572

90.7

32

Gambia

512

765

207

124

28

152

43

554

-27.6

33

Italy

409

372

31

48

142

57

186

464

24.7

34

Mexico

236

492

28

40

123

67

134

392

-20.3

35

Singapore

493

626

7

40

132

68

130

377

-39.8

36

Greece

324

473

116

25

41

117

44

343

-27.5

37

Ghana

54

167

28

83

84

56

28

279

67.1

38

Kazakhstan

268

179

 

66

104

52

49

271

51.4

39

Tunisia

225

409

 

 

77

68

106

251

-38.6

40

Sudan

256

546

 

 

 

27

218

245

-55.1

41

Algeria

404

919

 

81

50

 

108

239

-74

42

Mauritania

279

167

127

28

54

 

28

237

41.9

43

Croatia

65

195

 

25

72

118

17

232

19

44

Belgium

119

178

59

 

58

58

35

210

18

45

Guinea

207

126

43

28

 

98

14

183

45.2

46

New Guinea

 

654

55

96

 

31

 

182

-72.2

47

Kuwait

274

259

32

 

 

54

95

181

-30.1

48

New Zealand

174

204

48

16

71

9

30

174

-14.7

49

Syria

294

279

17

71

28

55

 

171

-38.7

50

Bulgaria

152

311

15

 

 

95

52

162

-47.9

51

Iraq

201

528

 

16

55

63

28

162

-69.3

52

Guatemala

85

69

25

23

25

46

40

159

130.4

53

Oman

238

188

43

43

42

27

 

155

-17.6

54

Latvia

90

202

 

58

 

60

25

143

-29.2

55

Finland

189

130

7

15

33

49

33

137

5.4

56

Sweden

218

227

10

35

84

 

3

132

-41.9

57

Qatar

167

286

47

 

10

30

43

130

-54.5

58

Yemen

437

357

 

 

15

98

 

113

-68.3

59

El Salvador

121

 

 

3

27

52

27

109

100

60

Lithuania

125

138

 

 

 

79

14

93

-32.6

61

Hongkong

91

46

25

 

23

26

15

89

93.5

62

Nepal

3,288

3,826

 

 

 

16

73

89

-97.7

63

Afghanistan

16

 

 

 

27

61

 

88

100

64

Libyan

122

192

30

56

 

 

 

86

-55.2

65

Venezuela

36

18

16

 

 

20

48

84

366.7

66

Morocco

793

241

18

25

 

35

 

78

-67.6

67

Nigeria

54

47

1

25

 

28

23

77

63.8

68

Lebanon

176

116

 

 

51

25

 

76

-34.5

69

Bahrain

95

136

38

 

11

11

16

76

-44.1

70

Dominica

45

14

5

 

12

21

36

74

428.6

71

Indonesia

355

119

11

15

22

12

10

70

-41.2

72

Georgia

144

122

 

 

42

12

15

69

-43.4

73

Romania

156

215

22

16

 

 

28

66

-69.3

74

Jamaica

111

101

17

25

 

 

17

59

-41.6

75

Argentina

 

29

5

 

 

24

25

54

86.2

76

Chi Lê

56

274

 

9

30

13

 

52

-81

77

Norway

24

61

12

 

13

13

13

51

-16.4

78

Uzbekistan

 

52

 

 

 

 

50

50

-3.8

79

Mali

28

 

 

 

 

50

 

50

100

80

Hungary

24

50

17

 

 

 

29

46

-8

81

Estonia

69

104

11

 

17

 

10

38

-63.5

82

Panama

38

162

5

 

18

9

5

37

-77.2

83

Costa Rica

31

32

15

 

19

 

 

34

6.3

84

Reunion

18

37

 

17

 

 

17

34

-8.1

85

Peru

29

8

6

 

20

 

1

27

237.5

86

Djibouti

1

15

 

 

27

 

 

27

80

87

Kenya

 

 

 

 

27

 

 

27

100

88

Slovakia

 

125

 

25

 

 

 

25

-80

89

Azerbaijan

 

11

 

 

 

25

 

25

127.3

90

Angola

 

5

24

 

 

 

 

24

380

91

Guyana

21

 

 

 

 

 

21

21

100

 

 

 

 

 

 

 

 

 

 

 

 

Regarding VPA data, in the first 5 months of 2021, Vietnam imported 16,357 tons, of which black pepper reached 12,026 tons, white pepper reached 4,331 tons. Compared to the same period in the first 5 months of 2020, the import volume increased by 28,9%. Indonesia – 5,982 tons, Brazil – 4,498 tons and Cambodia – 3,228 tons are the 3 largest pepper exporting countries to Vietnam. Compared to the same period in 2020, imports from Indonesia increased by 35,8%, from Cambodia increased by 84,4%, but imports from Brazil decreased by 14,6%.

 

 

No

Countries

First 5M

First 5M

2021

TOTAL

+/- %

2019

2020

JAN

FEB

MARCH

APRIL

MAY

21/20

1

Indonesia

10,754

4,404

1,878

365

1,088

1,511

1,140

5,982

35.8

2

Brazil

8,843

5,267

1,186

1,113

1,027

645

527

4,498

-14.6

3

Cambodia

1,245

1,747

 

126

480

775

1,847

3,228

84.8

4

Other

1,070

1,272

522

123

235

267

1,502

2,649

208

 

 

 

 

 

 

 

 

 

 

 

 

Total

21,912

12,690

3,586

1,727

2,830

3,198

5,016

16,357

28.9

 

CASSIA/ STAR ANISE/ TURMERIC;

Last week we saw a very strong demand for cassia from USA / EU / ASIA that pushed the price up from 75 - 150 USD each grade. Currently, whole cassia are almost out of stock and it is forecast that the price of cassia will continue to increase in the near future.