Important Report - Brazilian Pepper Contracts

Since the middle of November when the rainy season finaly  came to Brazil, bad weather and heavy rains are threatening Pepper production areas disrupting delivery routes and processes causing a big mess in the pepper industru this end of the year.
We post below an advise from one of the most reputable spices operators in Brazil warning clients and explaining the situation.
Our understanding is due the situation, the trend of Brazilan Pepper for next month is upright

                                 State of Paraná, Guaratuba - road to the port of Parangúa

Situation of roads in the State of Espírito Santo

December 5, 2022

After another weekend of heavy rain across the state of Espírito Santo and, particularly, in the pepper growing and processing regions, the situation today is of extreme concern.

In addition to the roads banned last week, now more roads, accesses and bridges are being punished by the heavy rains that devastate the region.

Today some more roads are blocked, with landslides, erosion and affected bridge structures, which makes all vehicle traffic in these regions impossible.

In view of this, we communicate to our customers that all shipments are on standby, since without road clearance, access to the ports of Espírito Santo, Bahia and Rio de Janeiro are closed.

We are in contact with all exporters, carriers and freight forwarders so that we can ship what is possible at this time, however delays will inevitably occur due to the aforementioned situation.
We are still waiting for the positioning of the road bodies and authorities so that we can estimate the time needed for the situation to normalize.

So we ask our customers to be patient and know that we are full time working on this matter and as soon as we have any news, we will inform you immediately.

Best Regards,

Cris Guerreiro

Cloves Market Latest News

 


Royal Golden's Cloves Market Latest News
By Parsram Dhirani

Madagascar - With weeks of slow progression of incoming new crop from field, goods are now reportedly seen starting to arrive in good flow from North and Tamatave areas. The arriving crop seems promising in terms of colours despite few areas reporting having small buds. According to shippers, few weeks from now, quality will be perfect alongside volume distribution from Tamatave that will finally increase. However, some buyers on site who are allegedly monitoring the field are still not able to procure enough cargo with export license that is still under renewal process. Most major sellers are still abstaining from selling until the license is released from their government. While some are able to offer, buyer must be willing to pay a premium price. Local price from North bushes still between MGA 25,000 – 25,500 while from Tamatave it is now at about MGA 30,000 with indicative FOB export price ranging from $7500 (pmt) and up.

Comoros from few days of holding their offers, finally came back in market by ending week 45. Price indication about $7200 pmt which is much supportive compared to Madagascar.

Sri Lanka still experiencing extreme weather events that could affect cropping patterns by December harvest. Price indication about $7100 -7200 pmt.

Brazil is completely absent.

At the moment, it is Madagascar versus Comoros. The latter as an active and leading contender compared to the other (at least) in terms of pricing. However, for those buyers who still value quality over price, choosing Madagascar is a ‘no brainer.’

On overall market sentiments, while others sporadically cover their urgent needs, the current economic condition overrides the optimism of some to openly participate and would rather stay on side line until the right buying time comes.

SALMONELA - EU strengthens measures against brazilian pepper

At the beginning of October the European Spice Association inssued a letter direcyed to it members,stating that EU Commision will strengthen the rules on Brazilian origin Pepper.

Black pepper from Brazil - announced tightening of current import measures  

The ESA Secretariat has been informed by the EU Commission that due to the high rate of positive salmonella findings in the import controls of whole black pepper from Brazil, a tightening of the current measures has been discussed.

The next steps would be a further increase in the frequency of controls and finally a ban on imports of black pepper from Brazil within the next months if there is no adequate reaction from the Brazilian authorities. The Commission will inform the Brazilian authorities about this possible tightening of the measures in the coming weeks. The Commission will inform the Brazilian authorities about this possible tightening of the measures in the coming weeks.

In discussions with the ESA Secretariat, the Commission has stressed that the only way to maintain or withdraw the current measures is to reduce the risk of salmonella contamination of the goods shipped from Brazil.

The commodity must comply with the EU provisions on salmonella at the time of import. Subsequent sterilization would therefore not be compatible with the Commission's requirements.

We will inform you as soon as we receive further information on the Commission's possible course of action.

VIETNAM BUSINESS NEWS OCTOBER 13 - Pepper

 

HCMC economy gains strong growth in Jan-Sept

Gross regional domestic product (GRDP) of HCMC between January and September reached nearly VND1,100 trillion in current prices, up around 9.97% year-on-year, according to the HCMC Statistics Office.

This remarkable figure shows that HCMC’s economy has bounced back quickly after one year of implementing economic recovery programs in the new normal.

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

Coffee

Coffee gains highest export value from Jan-Sept

Coffee has outweighed other key items to top the list of agricultural items with the largest export value in the first nine months of the year.

According to the latest data from the General Department of Vietnam Customs, the nation exported 92,550 tons of coffee worth US$226 million in September, a decline of 17.8% and 15.1% in volume and value over the last month.

As of September, the exports of this sector had continued to grow impressively, with 1.34 million tons of coffee worth US$3.06 billion, a year-on-year rise of 13.1% in volume and 37% in value.

Coffee has surpassed many key items such as vegetables, rice and cashew nuts to reap the largest export value in the agricultural sector.

Germany is the largest buyer of Vietnam, with 170,336 tons of coffee worth US$363 million. Belgium came second with 103,024 tons worth US$219 million, followed by Italy with US$236.47 million from 110,631 tons.

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

Pepper

Pepper export value surges by 7.1% over nine-month period

Vietnam raked in US$770.44 million from exporting 174,530 tonnes of pepper during the past nine months of the year, a decline of 18% in volume, but up 7.1% in value on-year, according to details given by the Ministry of Industry and Trade.

Throughout the reviewed period, pepper exports to the United States, the United Arab Emirates (UAE), Germany, and the UK fell while exports to markets such as India, the Netherlands, the Republic of Korea (RoK), the Philippines, Russia, and Thailand experienced an upward trajectory.

The average export price of Vietnamese pepper soared by 30.7% to reach US$4,414 per tonne compared to the same period from last year.

Pepper exports are forecasted to continue facing numerous difficulties as global pepper prices continue to drop due to reduced demand occurring in many countries, especially demand from China and the high value of the US$.

According to the Import and Export Department, the amount of pepper in stock in the nation is estimated to be at a relative high of between 80,000 and 100,000 tonnes,

At present, the price of local peppers largely depends on the Chinese market, particularly with European and US importers signing contracts until the end of this year.

Vietnam: Pepper industry takes advantage of opportunities to the UK market

 

06 October 2022, VN:
Vietnamese pepper exporters have great business opportunities in the UK market, which has high demand for pepper imports.

According to industry experts, Vietnamese exporters can also take advantage of the supply shortage in the UK to increase exports of items such as pepper to the UK due to the impact of the COVID-19 pandemic, Brexit and international sanctions against Russia led to supply instability and caused a shortage of goods in the UK. Currently, the UK is the second largest pepper importer and consumer in Europe after Germany, and Vietnam’s pepper exports to the UK market have increased sharply in recent years.

In 2020, Vietnam exported 5,621 tons of pepper to the UK market, earning 48 million USD, out of a total of 14,000 tons of pepper and 121 million. At the end of 2021, Vietnam’s pepper exports to the UK increased sharply compared to 2020, with an increase of 49%. In the first four months of 2022, pepper continues to be one of Vietnam’s main agricultural exports to the UK, alongside coffee and cashews.

According to the Vietnam Trade Office in the UK, pepper is among Vietnamese agricultural products that have a strong position in the UK and sold well in supermarkets. This agency said that Vietnamese agricultural products such as pepper have an advantage in the UK compared to similar products from other countries who have no free trade agreement (FTA) with the UK as UKVFTA has completely abolished the regulations on tax policy for pepper imported from Vietnam. However, local businesses can only take advantage of these competitive advantages if they meet British quality standards and suit the taste of their customers.

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Inflation, supply chain woes weigh on spice maker McCormick

 

Published Sept. 15, 2022

Dive Brief:

McCormick & Co. said supply chain challenges that are taking longer to ease and inflation that is impacting consumer buying habits are weighing on its business, prompting the company to trim its financial guidance in 2022 for the second time.

In a statement, CEO Lawrence Kurzius said the “normalization of our supply chain costs is taking longer than expected, pressuring gross margin.” He said the 133-year-old manufacturer of spices, seasoning mixes, flavorings and condiments “will be aggressively driving the elimination of supply chain inefficiencies.”

McCormick is not the only CPG being impacted by macroeconomic issues. Every food and beverage company is dealing with increased costs, heightened uncertainty and changes in consumer buying habits that have impacted their bottom line and made planning increasingly difficult.

Dive Insight:

Fewer than three months ago, McCormick cut its outlook, citing high cost inflation and supply chain challenges. Now the flavorings giant is lowering it once more. The company said adjusted third-quarter earnings would be 65 cents a share, trailing analysts’ estimates, while it expects adjusted earnings for the fiscal year 2022 to be between $2.63 to $2.68 a share, a drop from its previous guidance of $3.03 to $3.08 estimated in June.

“Supply chain challenges, heightened costs, and tepid consumption are taking a more pronounced toll on McCormick than foreseen two months ago,” Erin Lash, a director of consumer sector equity research at Morningstar, said in a research note published last week.

Brendan Foley, McCormick’s president and chief operating officer, told a Barclays Global Consumer Staples conference audience last week that people are looking for ways to stretch their food dollars, including using more of what they already have in their pantries and eating more leftovers. Shoppers, he said, also are doing more planning ahead and looking for lower prices on the shelf. The shift has been especially pronounced during the last three months.

“Fundamentally, we’re seeing consumer behavior change, really pretty significantly since the first half of ’22,” he said.

In addition to supply chain woes, McCormick is facing a moderation in some trends like baking at home that, while elevated, have eased “both faster and earlier than we expected,” Kurzius said at the Barclays conference.

The executive noted that inflation has left consumers less inclined to accept price increases. McCormick, Kurzius said, is increasing its brand marketing and focusing on highlighting the value of its offerings to drive growth. To be sure, the headaches reflect the economy as a whole rather than anything specific to McCormick, which has a dominating position in the spices category.

“We do see the consumer under pressure. We do see supply chain constraints that are still impacting us. But with that, our sales growth is still quite strong,” Kurzius said. “We still have a lot of confidence in the long-term outlook.”

McCormick is among a handful of food and beverage makers to lower their outlook or report ongoing challenges in recent months. Tyson Foods said last month that consumers are buying more chicken and cheaper cuts of beef to save money. And soup and snack maker Campbell Soup said recently that margins are slipping, and supply challenges impacting its Lance, Late July and V8 brands are likely to continue into 2023.

As consumers watch their spending, a major beneficiary of the current inflationary environment continues to be private label manufacturers such as TreeHouse Foods. While McCormick is best known for Lawry’s, its namesake spices and condiments like French’s and Frank’s RedHot, it also has a strong private label business that could serve as a buffer, Lash noted.

“Even if consumers opt to trade down, McCormick is well placed, given it operates as the largest private-label seasoning and spice manufacturer,” she said. “Most importantly, we think its unwavering focus on investing in consumer-valued innovation and marketing (5% of sales, or $100 million annually) should enable it to navigate the unsettling backdrop and maintain its competitive prowess long-term.” 

Christopher Doering's headshot

Christopher Doering

Senior Reporter

https://www.fooddive.com/news/mccormick-inflation-supply-chain-woes-spice-maker/631671/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202022-09-15%20Food%20Dive:%20Ingredients%20%5Bissue:44570%5D&utm_term=Food%20Dive:%20Ingredients

VIETNAM PEPPER MARKET UPDATE WEEK 36

Today, we received a brief report from one of our Vietnamese parties as below:

According to the preliminary data report of the General Department of Vietnam Customs, pepper exports in July 2022 reached 19,013 tons of pepper of all kinds, down 5,197 tons, ie down 21.47% over the previous month and down 7,217 tons, ie down 27.51% over the same period last year.

Export turnover in the month reached 80.12 million USD, down 19.95 million USD, or 19.94% compared to the previous month and down 14.77 million USD, or 15.57% decrease over the same period last year. last year.

The cumulative export volume of pepper in the first 7 months of 2022 reached a total of 142,557 tons of pepper of all kinds, down 37,631 tons, or 20.88% lower than the export volume of the first 7 months of 2021.

In terms of export value in the first 7 months of 2022, it totaled 639.84 million USD, an increase of 48.33 million USD, or 8.17% increase over the same period.

The average export price of pepper in July 2022 reached $4,214/ton, up 1.94% compared to the average export price of June 2022.

The European - American and Middle Eastern markets are flocking to Brazil to buy new crops due to lower logistics costs and softer prices. While the Chinese market still has an unresolved real estate crisis, the outbreak of a new Omicron variant has caused the Government to return to maintain the "Zéro - covid" policy, making pepper prices unable to prosper in the short term. . The soaring coffee prices also contributed to putting pepper prices at a disadvantage.

Coffee season is coming, dealers need money to trade coffee, so the pressure to sell pepper from now until the end of the year is quite large.

Check for more info o IPC week 36 report

REMINDER
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IPC PEPPER REPORT No. 35/22, 29 August 02 - September 2022

 

MARKET REPORT - KEY HIGHLIGHTS

- Market this week showed a mixed response with only India reported with an increase.

- After reported stable for the last two (2) weeks, Indian pepper price responded positive this week.

- Pepper price for Indonesia continued to be reported stable for the last three (3) weeks.

- Both local and international prices for Malaysia remained stable and unchanged as Malaysians celebrated the Malaysia’s Independence Day on 31st August.

- Local price for Sri Lankan pepper continued to be reported with a decreasing trend for the last three (3) weeks.

- Only Viet Nam white pepper local price reported stable this week. Whilst, the rests remained negative for the last three (3) weeks as Vietnamese celebrated the Independence Day of Vietnam on 2nd September.

FOB PRICE BLACK PEPPER - in US$/Mt

BUYERS PRICES AT NEW YORK (In USD/Mt)

FUTURES CF              THIS WEEK    PREVIOUS WEEK

Malabar black (Garbled 1)  n.a              7,100 CF September/October

Lampung black (ASTA)       n.a              4,850 CF September/December

Sri Lanka black                   n.a               7,000 CF September

Brazil black (ASTA)             n.a               n.a

Sarawak black (YL)             n.a              5,500 / MT FOB Prompt

Viet Nam black (ASTA)        n.a             4,400 CF September/October

Muntok white (DW)              n.a              n.a

Muntok white (FAQ)             n.a             7,450 CF September/October

Sulawesi Soroako white      n.a              n.a

Sarawak white (BL)             n.a              7,375 / MT FOB Prompt

Viet Nam white (DW)           n.a              6,100 CF September

IPC PUBLICATION - No. 33/22, 15 - 19 August 2022

Market this week shows a rather negative outlook with no origins reported with an increase as India and Indonesia celebrate their independence day this week.
Indian pepper price reported stable this week .
After reported with an increasing trend for the last two (2) weeks, pepper price for Indonesia reported stable this week as harvest continued in Lampung region.
Both local and international prices for Malaysia continued to be reported stable and unchanged.
After reported stable for the last two (2) weeks, local price for Sri Lankan pepper reported with a decreasing trend this week.
Both local and international price for Viet Nam responded negative this week.

FARM GATE PRICE BLACK PEPPER - in US$/Mt

FOB PRICE BLACK PEPPER - in US$/Mt

PINK PEPPER HARVEST IS IN FULL SWING IN BRAZIL

CALL FOR A GOOD QUALITY OFFER !

manager@peppertrade.com.br

PINK PEPPER HARVEST IS IN FULL SWING IN BRAZIL

 CALL FOR A GOOD QUALITY OFFER !

manager@peppertrade.com.br

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

REMINDER
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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.

-

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

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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Spices trend indications for 2022 - Black Pepper

SPICEXIM are International Brokers for seeds, spices, herbs and dry fruits. SPICEXIM is a multi-generation company with a long and respected history and has been in the business for more over a century. Below they try to provide a snapshot for different spices in 2021 and trend indications for 2022.

Black Pepper

Black pepper prices continued to firm in second half of 2021 on expectations of smaller crops in 2022, especially from the biggest origin – Vietnam, where farmers/planters disappointed at the lower prices started neglecting their plantations.
Average sized crops across Indonesia and Brazil were reported, which kept markets stable. Sri Lankan new crop is smaller, and prices have firmed up on Indian buying.

More controls have been imposed in EU for salmonella from Brazil pepper, effective from January 2022.

We expect black pepper to remain stable during the first quarter of 2022, with new Vietnam crop and Chinese New Year holidays and firm up during the middle part of the year, depending mainly on demand from China and USA.

Spices trend indications for 2022 - CLOVES

SPICEXIM are International Brokers for seeds, spices, herbs and dry fruits. SPICEXIM is a multi-generation company with a long and respected history and has been in the business for more over a century. Below they try to provide a snapshot for different spices in 2021 and trend indications for 2022.

Cloves

Clove prices moved sharply in 2021 on Indonesian small crop, buoyed by high price buying by Indonesian cigarette companies and Indian demand.

Good crops from African origin helped stabilize the prices, however the shipping line congestion complicated situation for importers.

Indonesian origin prices continue to be high, whereas African origins are lower due to the bureaucratic entanglements and shipping line issues.

Current muted Indian demand will be keenly watched during the first quarter of 2022, as new crop Madagascar consignments reach the Indian shores in Jan.

We expect cloves prices to remain stable to weak, with price spikes depending on buying by Indonesian cigarette companies

SPICES TRADE - CONSIDERATIONS ABOUT 2021 YEAR - TRENDS FOR 2022

If 2020, confined us to our homes, 2021 allowed us some freedom and many challenges in our efforts to return to the normalcy of pre-pandemic. 

THE CONTAINER

This metal box, the basic clog in the global supply chain system became the most sought after and premium component in 2021. As freight rates reached dizzying heights, finding suitable food grade empty containers at origins became a treasure hunt and in the end stages highest bidding auction situation for exporters, as shipping lines raked in billion $ profits.

The spices trade was faced with disrupted supply chain issues - farmers and planters inability to take care of crops and plantations due to lockdown restrictions and/ or reduced labour forces and weather challenges 2021, also demonstrated the inherent highly volatile nature of the spices trade. 

Many spices showed a sharp price spike on fundamental reasons but were unable to maintain the high levels due to the unstable demand situation across the globe. 

The hand-to-mouth buying trend visible in 2020 continued in 2021 and looks to be approaching the just-in-time buying philosophy, propagated by the Japanese in 2022. Extreme risk aversion is now a dominant theme, and it will only spread across major importers/buyers as new variants and vaccination protocols emerge.

For India as a major spice origin, the challenge lies in providing pesticides controlled spices, as more and more countries become stringent in their  requirements. As on date, it does look like a Herculean task unless government agencies work together with private players.

Currencies remained volatile as ever, (special mention for the Turkish Lira, which gave strong competition to the cryptocurrency markets) with the US FED continuing to print USD and dropping hints of tapering in 2022. 

With Chinese New Year in early February, Ramadan starting from early April and the big behemoths buying during the first couple of months for their yearly requirements - we expect a lot of volatility and good demand for most spices up to April, 2022 - by when hopefully also the Omicron situation will stabilize across most countries.