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MALAYSIA - Pepper market slows down

 

By JACK WONG

KUCHING: Domestic pepper prices have weakened considerably this year, after 2021’s powerful rally as a result of the spice’s global oversupply.

Other key factors contributing to the pull-back in prices include the Russia-Ukraine war, inflationary pressures and the strong US dollar.

Kuching Grade 1 black pepper slipped to RM13,750 per tonne on Aug 12 from RM17,330 per tonne in December 2021, down by RM3,580 per tonne or more than 20%.

Likewise, Kuching Grade 1 white pepper fell to RM23,850 per tonne from RM26,450 per tonne or by RM2,600 or about 10% during the same period, according to Malaysian Pepper Board’s (MPB) daily published prices.

In 2021, both black and white pepper prices posted impressive gains, soaring by about 90% from RM9,050 per tonne and 65% from RM16,000 per tonne respectively recorded in 2020.

Last year, both the black and white pepper prices climbed to their highest levels in three years since 2018, but were still far way off from their all-time highs of RM30,000 per tonne and RM50,000 per tonne respectively, in 2015.

International Pepper Community (IPC) executive director Firna Azura Ekaputri Marzuki said the current pepper market continues to be bearish, as the world grapples with demand erosion this year due to “deficit changing to surplus” inventory.

Other factors are depreciating currencies because of the strong dollar, inflation and low consumer appetite.

“China has returned to the pepper market but it may not be enough to cheer markets as Brazil and Indonesia are entering harvest season for 2022,” she added in her presentation on “Globalisation and World Pepper Industry 2021/2022” at Universiti Malaysia Sarawak (Unimas) late last month.

Sarawak’s established pepper exporter Nguong Aik (Kuching) Sdn Bhd director William S C Yii said as China, a major pepper consuming country, has not fully re-opened its international borders due to its Covid zero policy, it has resulted in a cut down in imports from major producing and supplying countries like Vietnam.

“Now China is very short of pepper because of a lot of restrictions (in imports). If Vietnam exporters cannot sell to China, they have to sell to other markets, like the United States and Europe and this has affected pepper prices,” Yii told StarBiz.

Vietnam, the world’s number one pepper producer and exporter, was estimated to have exported 261,000 tonnes valued at US$938mil (RM4.17bil) in 2021. This was down 8.5% in volume but up 42% in value from 2020, thanks to strong export prices.

Year-on-year, Vietnam’s average export price of pepper products jumped 53.5% to reach US$3,757 (RM16,697) per tonne in 2021.

Yii said the Russia-Ukraine war, which broke out in February 2022, has affected demand and pepper shipments to the two countries which imported a combined 7,000 tonnes a year previously.

He said the new Indonesian pepper crop, which will come into the market from next month, might be bigger in quantity than that of 2021. This may put pressure on pepper prices as Indonesia is the world’s second largest pepper producer.

The strong US dollar, he added, is another reason for the weak pepper prices as this dampened consumption of the spice.

Late last year, Yii was bullish and had predicted pepper prices to extend their rallies by another 30% in 2022. But the unexpected turn of events as mentioned has largely changed his views on the market outlook.

“The current pepper market is very inactive and extremely quiet. Though cargo containers are now available and the global shipping freight rates have come down from (their historical peaks) last year, these are still high compared to the pre-Covid-19 period,” he said.

Frina expects the global pepper market to stabilise and prices to firm up in November and December.

Concurring with her, Yii said it is normally in the third quarter and towards the end of the year when the global pepper market is more active, with prices on the uptrend.

“If China fully opens up its international borders by then, this may push up pepper prices by 10% to 20%, from current levels. But any price spike will attract sellers,” Yii said.

On Sarawak’s new pepper crop, he said the harvesting season was just over and that it had been a “failure crop”. Yii estimates this year’s small crop production to be 10% to 20% lower, compared to the past two years.

According to MPB, Malaysia produced 31,600 tonnes of pepper in 2021 (2020: 30,804 tonnes), with Sarawak contributing nearly 98% of the country’s total output. In 2021, Malaysia, which ranks fourth among the top five IPC member producers, exported 7,407 tonnes of pepper worth RM153.7mil.

Yii said pepper farmers are hit by soaring imported fertiliser prices, which have doubled from that of 2021.

Fertiliser made up about 70% of farm inputs.

Inadequate fertilising of pepper vines will affect yields.

At current weak prices, Yii said the better-to-do pepper farmers and rich dealers are holding onto their inventories and hoping to sell at higher prices.

By JACK WONG

TAGS / KEYWORDS:

Pepper , Prices , Down ,

https://www.thestar.com.my/business/business-news/2022/08/15/pepper-market-slows-down

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The major goals for Vietnamese pepper industry: safe, sustainable and profitable

 

August 2, 2022  

Vietnam: By 2025, up to 75% of pepper output and exports will fulfill the needs of developed markets, and 25% of farmers will have access to safe production models and better livelihoods. At least 25% of pepper producers will see a 25% increase in revenue, 25,000 farmers will get training and have access to agricultural services, and 70,000 tons of peppers will be produced sustainably. In the coming years, these are the goals set by the public-private partnership group for the pepper industry.

Demand for pure pepper on the market

Nguyen Quy Duong, Deputy Director of the Department of Plant Protection Department (MARD), emphasized that the preliminary meeting of the public-private partnership group aimed to assess and seek direction for resolving some significant issues regarding the general quality of Vietnamese pepper products exported to the US market.

“We are establishing a threshold for Vietnamese pepper. The meeting also seeks to summarize and assess the implementation outcomes of the EU-funded sustainable Vietnamese pepper development project in Dak Nong, Dak Lai, and Gia Lai provinces. After the conference, the Department of Plant Protection, the Sustainable Spices Initiative (SSI), and The Sustainable Trade Initiative (IDH) will sign a Memorandum on Integrated Plant Health Management “, Duong stated

The memorandum between the three parties includes: supporting and promoting sustainable pepper production in Vietnam via responsible management of pesticide use; strengthening effective cooperation of public-private partnership to control pesticide residues in pepper production to meet market requirements; promoting safe production links; improving policies and capacities of public partners to scale up sustainable pepper production; and calling on fertilizer enterprises to build models of using organic fertilizers in Dak Lak and Dak Nong.

The adjustment of the maximum residue limit (MRL) in accordance with the United States’ standard, according to Duong, is one of the most important factors for enhancing pepper product exports to the U.S. market. “The whole system, including state agencies, enterprises (private group), farmers, and social organizations, must be involved in addressing the excessive chemical residues,” Duong noted.

The group of businesses is vital. The present cooperation group, comprised of eight businesses, is effective in establishing connections with farmers, managing production, and training farmers in cultivation techniques, among other tasks. And the Department of Plant Protection will support these training sessions, which include instructions on the “4 proper” use of pesticides.

The public-private partnership group will also assist key farmers with training in sustainable agriculture, plant health, and the environment. The initiative will assist with production and environmental issues, including pesticide residues. This is the method through which the Food and Agriculture Organization of the United Nations (FAO) funds the Department of Plant Protection to establish an action plan for 2030 with a vision for 2050.

At the meeting, the conference also discussed a number of other issues that businesses and international organizations are interested in, such as the use of child labor in the pepper production industry, and land degradation in the pepper-growing area in the Central Highlands.

In the last six months of 2022, the group recommends constructing an environmentally sustainable production program to restore the health of the soil.

Top priorities

Vietnam is the largest pepper producer and exporter in the world, accounting for around 60 percent of the global pepper trade volume. However, the Vietnamese pepper business faces significant obstacles such as poor selling prices, lack of sustainability, and an inability to satisfy markets’ ever-increasing demands.

“It is crucial to guarantee that exported pepper products do not include pesticide residues. China, the main import market for Vietnamese pepper, has increasingly stringent food quality criteria. Therefore, the production of pepper in a sustainable manner is an essential and vital responsibility. One of the highest priorities of the public-private partnership in the pepper industry is to assist small and medium-sized businesses and farmers in controlling pesticide residues in pepper; chain production links; and promoting communication and replication of safe pepper production models.”, Duong elaborated.

The Department of Plant Protection plays a focal role in promoting the improvement of the policy system and capacity in managing and guiding the responsible use of pesticides, promoting safe production linkages, and managing food safety and original traceability of exported pepper in order to increase the scale of pepper production and meet market standards for safe, sustainable production.

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Vietnam - pepper market update 1st August 2022 – Week 31.

Pepper price has increased over 2% in July.

Last week, pepper price in Vietnam was almost unchanged with a stable price trend when the trading volume on the market was not much. Farmers and dealers did not have any pressure to sell as inventories dropped sharply in the first 7 months of the year. The upcoming market trend is still difficult to forecast, but it is likely that the market will move sideways or increase in price as EU / USA / ASIA / AFRICA… will have to increase imports pepper to prepare for orders by the end of 2022.

 

 

Please see the REPORT FILE & FULL QUOTATION LIST by click to download.

 

https://drive.google.com/file/d/1Mc6BOvy_iwcW18hjs041ujTTtLjNDGUy/view?usp=sharing

 

 

MEXICAN ALLSPICE PIMIENTO CROP UPDATE

 

 

The new Allspice Pimiento crop is arriving delayed.
Many of the trees are flowering just now and some of them are in the second flowering.
The fruits are very small yet and the most of the trees do not have fruits yet. 

For that reason we are considering that the harvest time could be arriving almost three weeks later  and the shipments will not be be ready for loading until September, depending also of the availability of the containers which is still unstable. 

Vietnam Pepper market update 27TH June 2022 – Week 26

 

 

The first 17 days of June recorded the highest import volume of China at 1,603 tons, followed by the United Arab Emirates, Singapore and the United States.
The return of Chinese purchases is expected to be a sign of prosperity when the pepper market has been quiet during the past 1.5 months.
According to forecast, the total pepper export output in the first 6 months of Vietnam will reach over 125,000 tons, down 29,000 tons, equivalent to a decrease of 19% compared to the same period in the first 6 months of 2021 (154,038 tons).
A significant reduction when the big market is China imported just over 3.500 tons (down to 90% compared to the same period in 2021 due to the application of zero covid policy at the border).

 

Cardamom prices fall on weak demand, exports may receive a boost

Cardamom prices are down from around Rs 1,000 per kg to Rs 750 to 850 per kg. The market expects the rates to decline further with a new harvest season round the corner

 PK KRISHNAKUMAR JUNE 14, 2022 / 06:33 PM IST

Robust production and tepid demand have caused prices of cardamom to decline, raising concern among growers. Small cardamom prices have fallen by over 20 percent in the last few weeks.

As cardamom growers fret over the plummeting prices, exporters reckon the low prices will boost India’s competitive edge in the global market and help them to match the record shipments of the last financial year.

Weak demand, both in the domestic market and overseas, has pushed down the cardamom prices from around Rs 1,000 per kg to Rs 750 to 850 per kg. The market expects the rates to decline further with a new harvest season round the corner.

Exports of the spice fetched all-time-high volumes and earnings in 2021-22, according to the latest figures of the Spices Board. The country exported 10,572 tonnes of cardamom worth Rs 1,375.70 crore in the year. The volumes were higher by 63 percent and value by 25 percent over the previous year.

UAE overtakes Saudi Arabia

The record exports were achieved despite Saudi Arabia imposing stringent rules on pesticide residues. Until a couple of years ago, Saudi Arabia used to be the biggest buyer of Indian cardamom. The United Arab Emirates (UAE) has now overtaken Saudi Arabia in cardamom purchases.

According to the available statistics for 2020-21, the UAE purchased 1,724 tonnes of Indian cardamom compared to 842 tonnes by Saudi Arabia.

“The exports have spread to many other countries. Besides other Gulf countries, Bangladesh has also emerged as a big buyer,’’ said Anjo Jose, executive director of Mas Enterprises, a major exporter.

Even going by the 2020-21 data, exports to countries like the US, Kuwait, Bangladesh, Canada, Singapore and Qatar have increased significantly over the previous year. This is expected to go up further in FY22 as shipments have risen sharply.

Competition from Guatemala

Although cardamom from Gautemala, the largest producer of the spice, is cheaper than the Indian variety, many buyers are going for the superior quality of the latter.

“Buyers have come to recognize the premium quality of Alleppey green bold cardamom. Indian cardamom at $14-15 per kg is around $3 higher than the Gautemalan variety,” said Hemen Ruparel, chief executive of Samex Agency, another exporter.

But presently there is a shortage of good quality export cardamom in the Indian market, which has led to the dominance of Guatemalan cardamom in global trade.

“Exporters are waiting to buy fresh stock in the new harvest season, which is expected to be in full swing by July-August,’’ Jose said.

Growers complain that climate vagaries are affecting the production quality of cardamom, grown mostly in Kerala and a few regions of Tamil Nadu and Karnataka.

“Pest menace has gone up. The chemicals we had used earlier are banned now and the new ones that are approved are not effective in controlling it. As a result, the quality of production is coming down,” said K S Mathew, a major grower.

Production in 2021-22 is estimated at over 25,000 tonnes compared to 22,520 tonnes in the previous year. The surplus production has come from new growers and non-traditional areas.

“While the big estates get hardly 300 kg an acre, the small ones are able to get almost double the quantity,” said M M Lambodharan, general secretary of the Spices Planters Association.

Weak demand from the North Indian markets and with exporters waiting for the new season, cardamom prices have become non-remunerative for the growers.

“The growers need Rs 1,200 per kg to break even considering the increasing cost of fertilizer and pesticides. Though the growing regions received copious rains in May, extreme heat this month is causing the plants to wilt. At this rate, the crop could be short by 40 percent in the next harvest," Lambodharan said.

Earlier during the year, when cardamom prices fell below Rs 800 per kg, the Spices Board implemented new steps restricting the total quantity per auction for a licensed auctioneer to 65 tonnes.

Of this, growers were allowed 70 percent of the share while the quota for licensed dealers was limited to 30 percent. This was to check the re-pooling of cardamom by dealers at auctions, which the growers said was leading to a price fall. But that was in force only for over a month and was relaxed when the prices rallied.

PK KRISHNAKUMAR is a journalist based in Kochi.

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https://www.moneycontrol.com/news/business/cardamom-prices-fall-on-weak-demand-exports-may-receive-a-boost-8686031.html

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