VIETNAM PEPPER MARKET UPDATE 20TH OCT 2020 – WEEK 43

 

 

 

Every year from August to October, there are storms, tropical depressions in the central provinces of Vietnam. However, this year, natural calamities have happened quickly and take the worst consequences in recent years. All regions in Vietnam are continuously affected by storms and tropical depressions, especially severe flooding has been happening in the central provinces of Vietnam in which;

-           Quang Tri Province; Severely flooded, this is also a quite famous province for pepper because farmers focus on a sustainable program and quality was low pesticide residues. Quang Tri crop size is about 2,500 - 4,000 tons/year. However, facing severe natural disasters, it is likely pepper plantations in Quang Tri province will be completely destroyed.

-           Heavy rain and flood in early October affected many places in some key raw material areas such as Tuy Duc, Dak RLap, Dak Song in Dak Nong; Cu Kuin, Ea H’leo, Krong Nang, Cu M’Gar,… in Dak Lak. Therefore, the possibility of disease and pest attack to the pepper vine is foreseen while pepper plantation is very sensitive to weather conditions. If the weather continues to change suddenly, it will almost seriously affect the yield of the 2021 crop.

 

Pepper prices increased rapidly with an increase of about 5% for black pepper and 6% for white pepper within 1 week. Demand is pushed up from China and other countries such as USA/ASIA ... The Chinese government also gradually loosened measures for agricultural products between two countries, pushing the demand up rapidly (pepper prices increased 4%, Star Anise 10-20%, cinnamon/cassia also increased from 5 - 10% within 1 week).

Demand has risen again while inventories have decreased significantly at the end of the season. Therefore, the material traded on the market is not abundant and very limited quantity was done. Farmers and domestic collectors do not offer raw material from yesterday.

In addition, unfavorable weather factors have reinforced confidence in the 2021 crop with reduced quantity and encouraged farmers/middlemen and even exporters to increase stockpiling and do not rush to offer. Some said they can stockpile for the next 3 years and believe the market can not come down in medium term.

Many big buyers are interested to buy the current price for long distance shipment 2021, however processors and exporters are cautious and withdraw.

 

Export: According to the General Department of Vietnam Customs, in the first 9 months of 2020, Vietnam exported 220,193 tons of pepper with a turnover of 489.5 million USD. Compared to the same period in 2019, the export volume decreased by 5.8%, the turnover decreased by 17.5%.

 

MONTHLY AVARAGE PEPPER PRICE 2018 - 2020 FOR REFERENCE

 

 

MONTH	BLACK PEPPER			WHITE PEPPER
	2018	2019	2020	2018	2019	2020
1	3.773	3.313	2.340	5.918	3.654	3.255
2	3.481	2.512	2.130	5.413	3.251	3.218
3	3.357	2.448	2.160	5.061	3.169	3.127
4	3.040	2.414	2.109	4.624	2.970	3.150
5	3.084	2.365	2.184	4.540	3.037	3.182
6	3.085	2.376	2.285	4.679	2.883	3.221
7	2.970	2.447	2.371	4.240	2.516	3.475
8	2.817	2.370	2.445	4.009	2.721	3.519
9	2.983	2.388	2.416	3.944	3.093	3.561
10	2.891	2.333		3.933	3.024
11	2.972	2.274		4.733	3.155
12	3.016	2.282		4.301	3.368
AVARAGE	3.122	2.460	2.271	4.616	3.070	3.334

 

 READ MORE NEWS ABOUT WEATHER IN VIETNAM LAST WEEK...