TRYING TO UNDERSTAND BLACK PEPPER MARKET

A Client asked me today:

" Why Brazilian Black Pepper has been cheaper then Vietnam for such long time ?
I´ve been in the market for 6 years now and I never seen such situation !"

Well, neither I know.
I´ve been trying to understand the reasons but cannot find a reasonable answers for 2 questions:
Why brazilian pepper had been cheaper for all year long, and
Why Pepper price in general decreased that much in the last seasons ?

Average prices for B1 550g black pepper in 2002 were U$D 1,500/ton
Than in 2006/2007 it started to rise to U$D1,800 /U$R 2,000 / U$D 2,250... ended the 2007 quoted at U$D 3,700
After a relatively smooth 2008 and 2009 it climbed to U$D 4,200 at the end of 2010.
Beginning 2011 it went from U$D4,200 to U$D 7,000 and from then it was always quoted in the range ofU$  7 - 8,000, with a peak of U$D 9,000 in 2015.
In the middle of2017 it started to fall ending the year at U$D 3,600 and now is averaging U$D 2,000 - back to 12 years ago !
If inflation is considered, the present price is even lower that the one of 2002.

WHY ??? What happened to pull the prices to such behaviour ?  And what´s is to come now ???

Therefore I invite you to write a guess about these 2 questions and further try to make a preview for the next year or even more extended. Please write to manager@peppertrade.com.br

The answers for these questions will be published on our blog and FB page, and if you desire we´ll mention your name and mail adress.

Let´s see if we find a consensus

Thank you all
Michail Wagapoff

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VIETNAM - SPICES MARKET UPDATE 12TH DECEMBER 2019

November, Vietnam has exported 16,484 tons of pepper, including 14,941 tons of black pepper and 1,543 tons of white pepper.  Export turnover reached 38.85 million $ with black pepper 33.98 million$ & white pepper 4.87 million $. Compared to the October, the export volume decreased by 3.9%, the turnover decreased by 5.8%.

Accumulated from Jan to November 2019, Vietnam has exported 271,067 tons including 243,174 tons of black pepper & 27,893 tons of white pepper with export turnover reached 682.9 million $. Compared to the same period in 2018, the export volume increased by 21.7%, equivalent to 48,281 tons, but the export turnover decreased by 6.8%, equivalent to 49.8 million $.

The average export price of black pepper in the first 11 months of 2019 reached 2,446 USD/ton, white pepper at 3,026 USD/ton. The export price of black pepper decreased by 23.4% and white pepper decreased by 21.3% compared to the same period of 2018.

China is Vietnam's largest pepper import with 56,095 tons, USA is 46,210 tons, follow is India, Germany…

Pepper market slightly firmer due to exporters covering December shipment, farmers/collectors offer limited raw material. USD is in weakening trend compare with Vietnam currency from this year.

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IPC REPORTS -IMPORT OF PEPPER BY DENMARK

Denmark, officially the Kingdom of Denmark is a Nordic country. Denmark proper, which is the southernmost of the Scandinavian countries, consists of a peninsula, Jutland, and an archipelago of 443 named islands. Denmark actively imports pepper from various pepper producing countries for domestic consumption or for re-export.
In 2017, Denmark was reported to have imported a total of 1,122 Mt of pepper which 27% or 300 Mt of it comprised of whole pepper while 73% or 822 Mt of it was ground pepper. The average import by Denmark in 2017 was reported to be 93 Mt per month with the highest quantity recorded in July with 139 Mt. The total expenditure of pepper imported by Denmark was reported to be as high as USD 12.2 Million, recording an average price of the total pepper imported by Denmark at USD 11,083 per Mt for whole pepper and USD 10,905 Per Mt for ground pepper.
Year 2018 saw a decreasing trend in term of quantity of pepper imported by Denmark. Denmark was reported to have recorded a total of 1,071 Mt which comprised of 23% or 246 Mt of whole pepper and 77% or 825 Mt of ground pepper. Thus, recording a decrease of 5% as compared to the same period in 2017. On average Denmark was reported to have imported 89 Mt per month and peaked in April with 132 Mt. In accordance with decreasing in terms of quantity, Denmark's expenditure for pepper import was reported to have declined by 15% to a total of USD 10.4 Million, recording an average price of the total pepper imported by Denmark at USD 11,037 per Mt for whole pepper and USD 9,407 per Mt for ground pepper or a decrease by 0.4% and 14% respectively as compared with 2017.
Pepper import by Denmark as of June 2019 was reported with a decrease of 17% as compared with the same period in 2018, totalling at 460 Mt which comprised of 97 Mt of whole pepper and 363 Mt of ground pepper. The total expenditure of pepper import by Denmark as of June 2019 was reported with a decrease by 27% as compared to the same period in the previous year, totalling at USD 4.0 Million.
The top five countries of origins of Denmark's pepper both for whole and ground as of June 2019 were reported to be Germany with 225 Mt (a decrease of 7% as compared with the same period in 2018), Sweden with 83 Mt (an increase of 6%), Netherlands with 53 Mt (an increase of 464%), Spain with 43 Mt (an increase of 40%) and India with 12 Mt (a decrease of 48%). The significant decrease of Denmark import from India could be contributed that Denmark started to shift import to Netherlands as one of the re-export hub to European countries (an increase by 44 Mt as compared to the same period in 2018).

WHATSAPP +5511988027709
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IPC MARKET REPORT No. 47/19, 18 - 22 November 2019

LOCAL MARKET 
Market this week showed mixed response with only Indonesia and Malaysia recroded decreses.
In local market, Malabar black pepper was traded with an increase by 2% as compared to the previous week with an average of USD 4,523 per Mt.
Indonesia black pepper was reported stable with an average of USD 1,632 per Mt.
Whilst Indonesia white pepper took a dive with a 9% deficit as compared to the previous week with an average of USD 3,015 per Mt, recording the lowest price of Muntok white pepper in the past year. The significant decrease in price of white pepper in Indonesia could be contributed to market being flooded by product. Thus, pressuring the price in the local currency to an average of IDR 42,500 per Kg from IDR 46,500 per Kg in the previous week.
Malaysian black and white pepper was also traded negatively with a 2% and 1% deficit respectively as opposed to previous week at an average of USD 1,930 per Mt for black pepper and USD 3,433 per Mt for white pepper. Furthermore, Viet Nam black pepper was reported an increase by 2% as compared to the previous week with an average of USD 1,740 per Mt whilst Viet Nam white pepper was reported stable and unchanged.
Sri Lanka black pepper showed a strong outlook this week and returned to be traded at an average above USD 3,000 per Mt with an increase by 7% as compared to the previous week at an average of USD 3,093 per Mt. Whilst, China white pepper was reported stable with an average of USD 4,563 per Mt.

INTERNATIONAL MARKETIn international market, the trend also showed mixed response with only Indonesia recorded decrease.
FOB price of India black pepper was reported with the same 2% increase as compared to the previous week at an average of USD 4,801 per Mt.
Indonesia black pepper was reported steady with an average of USD 2,031 per Mt.
Whilst Indonesia white pepper was reported with an 8% deficit as compared to previous week at an average of USD 3,592 per Mt.
Malaysia black and white pepper continued to be traded stable and unchanged.
Furthermore, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper were reported with an increase by 3%, 3% and 2% respectively as opposed to the previous week averaging at USD 2,326 per Mt, USD 2,391 per Mt and 3,476 per Mt respectively.
China reported a stable international trade for its white pepper with an average of USD 4,763 per Mt.

WHATSAPP +5511988027709
MAIL manager@peppertrade.com.br
TWITTER : https://twitter.com/peppertrade