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
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.
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.
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.
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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.
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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.
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.
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.
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.”
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Christopher Doering
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