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.