IPC PEPPER MKT REPORT No. 22/20, 25 - 29 May 2020

LOCAL MARKET 
Market this week showed mixed response with a rather positive outlook as only Indonesia's Muntok white pepper was reported with a decrease. In local market, Malabar black pepper was reported stable at an average of USD 4,043 per Mt. Indonesia black pepper was reported with an increase of 1% as opposed to the previous week averaging at USD 1,728 per Mt whilst Indonesia white pepper was reported with 1% deficit as compared to the previous week at an average of USD 2,913 per Mt. Malaysia's black and white peppers were reported stable and unchanged. Furthermore, Viet Nam black and white pepper were reported with significant increase of 17% and 11% respectively as compared to the previous week at an average of USD 2,093 per Mt for black pepper and USD 2,939 per Mt for white pepper. The increase of Viet Nam price could be contributed to the significant increase of China's pepper demand after China's lock down ended. Sri Lanka black pepper was reported steady and was traded at an average of USD 2,733 per Mt. China white pepper was also reported stable averaging at USD 4,114 per Mt.


INTERNATIONAL MARKET
International market showed similar mixed response with a rather positive outlook. India black pepper was reported stable at an average of USD 4,308 per Mt. Indonesia black pepper was reported with an increase of 1% as compared to the previous week averaging at USD 2,133 per Mt whilst Indonesia white pepper was reported with 1% deficit when compared to the previous week averaging at USD 3,468 per Mt. Malaysia black and white pepper continued to be traded stable and unchanged. Following the local market trend, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper were reported with an increase of 7%, 7% and 10% respectively as opposed to the previous week at an average of USD 2,440 per Mt, USD 2,482 per Mt and USD 3,526 per Mt respectively. China white pepper was reported stable averaging at USD 4,309 per Mt.
US market was reported with a slow movement of several origins. Despite the time of year usually saw more stock of Sarawak from new crop, it was reported to be very quiet. Furthermore, as Indonesia and Brazil offered limited amount with no possible prompt shipment, Viet Nam was able to supply a large quantity to market. US stock for the 3rd and 4th quarters are yet to be covered while buyers are anxious on low price contract. 

 





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VIETNAM - PEPPER MARKET UPDATE 25TH MAY - WEEK 22 - TREND IS UP

Pepper market has continuously increased this month from VND 38,000 in early May to VND 48,500 at the present. Price increase was up to 28% within 25 days and up from the bottom of 35.5% (VND 34,500) within 2 months. A jump in prices is beyond the expectation of almost all pepper producers and exporters not only in Vietnam but also worldwide. The market increased last time mainly due to the following reasons;

- After lock down due to the Covid-19 epidemic, Chinese customers returned to buy both black and white pepper in huge quantities (March and April bought above 20.000 tones and May is around above 10.000 metric tones) . In particular, white pepper is being bought by many and continuously.

- Pepper was low level and is considered to have been at the bottom already (VND 34,500 - 1,510$), so many speculators actively bought huge quantities of stock. This also contributed significantly to the price increase last time.

- Due to the Covid - 19, some countries producing and exporting pepper have been continuously restricted as harvesting, processing, freight forwarding, logistic service. This also makes pepper sometimes suddenly shortage in each different time.

- At low prices and a lot of farmers making losses, many farmers have left and do not continue to take care of pepper as the previous time, besides the weather in the pepper areas is drought. Therefore, pepper production in 2021 is maybe less than the 2020 crop.

- Many exporters sold short for long time shipments who have not covered raw material yet. They have to buy to ensure time of shipment.

- Some big oversea customers have not yet purchased enough quantity for orders in the 3rd & 4th quarters, so they continue to participate in the market in the coming month.

- At present, the situation in Vietnam is controlling Covid 19 quite well. Transportation service, logistics smoothly and quickly. Therefore the oversea demand for spice products in Vietnam is gradually increasing.

- Although the inventories of Vietnam pepper are still quite large, however, we assess that the pressure of circulation of these inventories is very low due to being scattered from farmers, middlemen, exporters ... They are not in a hurry to sell or be ready to freeze inventory if the market price decreases.

- Even at this level many farmers/collectors still think attractive and they have been buying more quantity to stockpiling from last week until now.

- Currently, it is almost the only Vietnam can supply a large quantity to the market while Indonesia and Brazil are offering very limited and not possible prompt shipment. Therefore, the demand for Vietnamese pepper is expected to continue to increase until next July at least (Indonesia harvests in July, Brazil harvests the second crop in August 2020).

- Contrary to many other pepper exporting countries, Vietnam's currency has been consistently stronger than the USD with a 1% over the past week, that makes pepper prices also up.
In my opinion, pepper prices will continue uptrend until the end of June/July. There will be some short-term corrections in July/August.


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The new crop of Brazilian Pink Pepper arrived

The new crop of Brazilian Pink Pepper started to arrive.
Now, it will be cleaned, re-dried, ventilated, passed through color screen equipment, graded, pass pesticides and biological analisis and cerificated and than packed for export.

It is a rather long processing as Pink pepper corns are fragile.

Packed usually is in 5 or 10 kg polybags vacuumed or with gastoxin injected to protect against contamination within paper cartons.

The first lots are usually the best, the most selected.

Shipments may be by the end os June however this year due to COVID 19 problems some delays may be considered.

Call us for firm offers and terms
manager@peppertrade.com.br

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VIETNAM - PEPPER MARKET UPDATE 18TH MAY - WEEK 21

Market opening today firmer and very less offer. Farmers/middleman keep watching and not offer raw material. Good demand coming from USA/EU/ASIA especially from China both black and white pepper. Exporters covering short position so market maybe continue increasing is foreseen.

VIETNAM EXPORTS

Total export turnover in April reached 73.4 million USD (black pepper; 62.8 million USD, white pepper; 10.6 million USD). Compared to the previous month, export volume decreased by 9.3% and turnover decreased by 12.1%.

The average export price of black pepper in April reached 1,898$/ton and white pepper; 3,150$/ton.

China continued imported biggest quantity within in April, reaching 11,416 tons, up 5.8% and around for 31.3% of total export of Vietnam Pepper.

January to April 2020; Vietnam exported 116,764 tons with turnover reached 248.75 million USD. Compared to the same period in 2019, exports quantity increased by 7.8%, but exports - import turnover decreased by 12.1%.

-          Imports of Asia in the first 4 months decreased by 1,254 tons to 64,868 tons but it remained the largest import area of ​​pepper from Vietnam ( 55.2%).

-          China is biggest with total quantity imported from Jan to April reached 26,266 tons (19.8%), down 2,635 tons compare with the same period last year.

-          India is also sharp decrease from 10,102 tons in 4 months of 2019 to 5,978 tons in 4 months of 2020, a decrease of 40.8%.

-          Some other import markets decreased including Iran decreased 736 tons, Arabs decreased 592 tons, Indonesia decreased 236 tons, ...

-          Imports increased sharply in Myanmar, up 3,346 tons to 4,117 tons, Nepal increased 1,500 tons to 3,826 tons, ...

-          USA import increased by 2,622 tons, of which the USA increased 2,144 tons to 19,759 tons (16.8%) and was the second import market of Vietnam Pepper.

-          Europe, the import increased by 2,976 tons to 20,438 tons (17.4%), leading by Germany imported 4,137 tons, up 562 tons. Next is the Netherlands, Russia, England, Turkey, ... Imports dropped the most in Ireland, dropping 1,791 tons to 385 tons.

-          Africa import around 8.9%, increasing 2,986 tons over the same period, leading by Egypt importing 4,932 tons, up 2,141 tons. Followed by Senegal imported 1,506 tons, up 119 tons.


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BRIEF PICTURE OF THE SITUATION OF BLACK PEPPER IN BRAZIL

MAY 15, 2020

Pepper in Brazil is scarce now as the harvest in Espirito Santo finished and the new crop in Belem will start in July/August.
Some stock is been kept by the growers but due to scarcity asked prices are hight.

In the last weeks the CORONA issue impacted heavily on pepper trade in Brazil causing delays in processing, transportation and port operations such as inspections and loading/unloading due to strong reduction of the workforce.

These are problems common to the whole world now but, in Brazil has particular issues of the political strugle against the President Bolsonaro which cause a big indefinition about the economy,
As a result of this political unrest, Dollar rates are absolutelly volatile with daily changes of upt to 2% - 3%.
Growers and stock holders try to get maximum price following and oftenly even surpassing de Dollar appreciation.
Therefore business is very difficult to settle.

Some esxporters that sold future shipments are short and struggling to honour their commitments.
In the words of one exporter "he offers price within 10 minutes validity" because growers change prices by hour.
If not confirmed at once the price is not valid anymore. Earlier this week business was done at U$D 1,900 FOB but today it would be impossible to make it at U$D 2,000.

Pepper at farmgate rose 28% from last week to yesterday and more 10% today.

Bottom line is: If you get a suitable offer book it immediatelly ! or consider wait for some weeks to see if market stabilize.
General trend is upwards, and we might see prices way over U$D 2,000 in the next months.

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VIETNAM - PEPPER MARKET UPDATE 11TH MAY 2020 – WEEK 20

Within 1 week, pepper raw material increased rapidly by 11% at VND 39,000 on 4/5/2020 jumped to VND 43,500 at the end of last week.
On the Saturday, the price increased by 4% due to huge demand from Chinese trader as well as many exporters cover short position for orders delivered in May. However, on Sunday market sudden correction with softened around 2%.

Market opened today stable, farmers and domestic agents to offer small quantity cautiously and prefer to keep watching. On the contrary to many other pepper exporting countries, Vietnam currency was stronger than USD dollar in the past week when VND index up by 1%.

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BRAZILIAN PINK PEPPERCORNS SEASON - HARVEST STARTED

Brazilian Pink Pepper harvest started alreay.

Shipments will be available from June on.
Packing in 10 or 5 Kg net cartons with plastic inner bag .
20ft container load - 7 MT

See below some pics of this season
 

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