VIETNAM SPICES MARKET UPDATE 8th MARCH 2021 – WEEK 10

PEPPER

Pepper price has increased by 19.5% in the past two weeks. The price of material from the VND 53,500 has increased to VND 64.000 today.

Despite being in the harvest season, raw material prices continue to rise steadily due to the following main reasons;

 

-       Many farmers are at a loss even at this price due to having a poor crop, almost all consider storing pepper. Farmers and domestic agents prefer to sell other agricultural products like Coffee to cover temporary costs and store as much as they can. From their perspective, pepper is the most attractive to invest in compared to other agricultural products. Some rich farmers even buying from others to stock continue.

 

-       Pepper's price is at an attractive level has stimulated many exporters/domestic agents to buy stocks. Especially, there are large enterprises with FDI capital actively participating and pushing the market up sharply in the last time. Pepper harvesting fully swings in all areas in Vietnam however it is not easy to buy in bulk.

 

-       China and Domestic speculators buying very aggressively after Lunar New Year. Demand coming from Middle East/India for March/April shipment. USA customers are more interesting to cover full-year shipments but processors/exporters hesitate to offer further shipments.

 

-       Several exporters are big short and have been buying raw material in secret in order to ensure shipment on time to the buyers.

 

Although Vietnam imports from other countries every year for re-production and re-export, the possibility of inventories from old crops and the volume of imports is forecasted to plummet in this year 2021 due to the price almost not much difference between each country.

 

Covid's control has been better in many countries while inventories used for production have to reduce a lot. Therefore, many countries try to increase the number of purchases to supplement production orders in 2021. This has resulted in prices of many commodities having very impressive price increases such as;

 

⦁ Pepper; has increased by 19.5% over 2 weeks from February 17th  - March 7th

⦁ Ginger; 5-7% increase within 1 week

⦁ Star Anise rose 25-30% within 1 week

⦁ Turmeric up 5 - 7% within 1 week

 

CASSIA/CINNAMON

 

The next two weeks will start a new harvest, but the market demand is still high, so it is forecasted that the market will continue to move sideways with little change in March and April.

 

STAR ANISE

 

Sudden demand from different countries such as the USA / EU / China has made the price of anise rose 25-30% within 1 week. The prices are currently high and there will be little chance of a decrease in the short term as China remains the main consumer market and demand is high.

 

TURMERIC

 

Price up 5 - 7% and foreseen up significantly this year due to huge demand from other different countries such as EU / India... Crop this year likely not good both India and Vietnam when farmers reduced their plantation.