CASSIA MKT UPDATE JUNE 20, 2020

20-Jun-20

The March cassia crop (the main crop) ended more than a month ago.
Due to Covid pandemic, transactions in March-April was bleak, but since May the orders have increased and factories have been active in collecting goods to perform the signed contracts.

Cassia is no longer in farmers now, local traders also sold nearly all their stock to factories.
Currently, the amount of cassia, especially cigarette cassia have started to be scarce, the price of split cassia, broken cassia have increased by USD 200-300/ton compared to the price of early June.

The prices of cigarette cassia in factories are very different.
Some factories offer a little higher than the price in early June, possibly because they have collected more goods. But there are factories offering cigarette cassia very high, more than USD 300-400/ton compared to the average price in early June.

The market of Vietnamese cigarette cassia during last 2 years is quite good, high demand due to Indonesia price which are much higher than Vietnamese prices, so buyers turn to Vietnam.

It is expected that in coming time, price of cassia will continue to be stressful, especially for cigarette cassia, when the demand in countries recover after the pandemic while inventories are not much, the new cassia crop (subsidiary crop) will be available in Nov-Dec.

As in 2017/18/19, the price of cigarette cassia usually increases sharply from July to year-end. 

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EXPORT OF GREEN PEPPER BY INDIA

Green pepper is made from the fully developed but immature berries. They are preserved in brine, vinegar or citric acid and may be dried or kept in the preservative. Europeans are fascinated by the natural green color and fresh flavor of green pepper.
Green pepper is one of India's value-added pepper products. In the past three years, India exported quite significant amount of green pepper to various country in the world. In 2018, India was reported to have exported a total of 674,224 Kg of green pepper. The average export of green pepper by India in 2018 was reported to be 56,185 Kg per month which peaked in February with 119,655 Kg. The total revenue of India's export of green pepper in 2018 was reported to be as high as USD 7.7 Million. Thus, recording an average price of the total green pepper exported by India at USD 11 per Kg. The highest export price of green pepper from India in 2018 occurred in May, June and November with USD 13 per Kg respectively whilst the lowest price was reported in October with USD 8 per Kg.
Year 2019 saw a decrease in term of quantity of green pepper exported by India. India was reported to have exported a total of 624,187 Kg, recording a decrease by 7% when compared with 2018. The average export of green pepper by India in 2019 was reported to be 52,016 Kg per month which peaked in March with 148,773 Kg. In accordance with decreasing in terms of quantity, India's revenue from green pepper export was reported to have declined by 21% as compared to the previous year to a total of USD 6.1 Million. Thus, recording an average price of the total green pepper exported by India at USD 10 per Kg or a decrease by 13% as compared with 2018. The highest export price of green pepper by India in 2019 was reported in September with USD 12 per Kg whilst the lowest price was reported in December with USD 7 per Kg.
As of February 2020, India was reported to have exported a total of 203,420 Kg of green pepper. Thus, recording an increase of 15% when compared to the same period in 2019. As of February 2020, the total revenue of green pepper export by India was reported to have reached a total of USD 1.8 Million, recording an increase of 4% as compared to the same period in 2019. The average price of the total green pepper exported by India as of February 2020 was reported at USD 9 per Kg, recording a decrease of 9% as compared to the same period in 2019.
Green pepper from India is mostly traded in European Countries. As of February 2020, India's top 5 Country of destinations for its green pepper were reported to be Germany with 76,510 Kg (a decrease of 11% as compared with the same period in 2019), Netherland with 36,000 Kg (an increase of 50%), France with 16,590 Kg (an increase of 11,595 Kg), Belgium with 15,590 Kg (an increase of 42%) and Poland with 13,200 Kg (n.a 2019). 

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IPC PEPPER MKT REPORT No. 25/20, 15 - 19 June 2020

19 June 2020

LOCAL MARKET REPORT
Market this week showed mixed response with a rather negative outlook. In local market, Malabar black pepper was reported with 1% deficit as compared to the previous week at an average of USD 4,141 per Mt. Indonesia black pepper was reported with an increase of 2% as opposed to the previous week averaging at USD 2,182 per Mt. The increase of Indonesia pepper could be contributed to the increase of demand while the stocks were limited. In local currency, the price of Indonesia black pepper increased to an average of IDR 31,000 per Kg from IDR 30,000 per Kg in previous week. As this week Indonesia Rupiah depreciated by 1% against US Dollar, Indonesia white pepper was reported with a 1% deficit as compared to the previous week averaging at USD 3,132 per Mt. Malaysia black and white pepper in local market were reported with an increase of 4% and 2% respectively as compared to the previous week at an average of USD 1,834 per Mt for black pepper and USD 3,205 per Mt for white pepper. Furt hermore, Viet Nam black pepper was reported with 3% deficit as opposed to the previous week averaging at USD 2,135 per Mt whilst Viet white pepper was reported with an increase of 1% as compared to the previous week at an average of USD 3,066 per Mt. Sri Lanka black pepper was reported with 1% deficit when compared to the previous week and was traded at an average of USD 2,689 per Mt. China white pepper was reported stable and unchanged.
INTERNATIONAL  MARKET
International market showed a similar trend as the local market. India black pepper was reported with the same 1% deficit as compared to the previous week at an average of USD 4,404 per Mt. Indonesia black pepper was reported with an increase of 2% as compared to the previous week averaging at USD 2,657 per Mt whilst Indonesia white pepper was reported with 1% deficit as compared to the previous week at an average of USD 3,721 per Mt. Contrary to the local market, internationally Malaysia black and white pepper were reported with 7% deficit respectively when compared to the previous week averaging at USD 3,350 per Mt for black pepper and USD 4,800 per Mt for white pepper. Furthermore, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper were reported with 2%, 2% and 1% deficit respectively as opposed to the previous week averaging at USD 2,490 per Mt, USD 2,570 per Mt and USD 3,800 per Mt respectively. China white pepper was reported stable and unchanged.
Trade activity in US market this week was reported slowing down due to instability of origin prices, financial problems and local currencies. Muntok white pepper for CF July/August was reported at USD 4.150 per Mt. 

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IPC REPORTS - EXPORT OF PEPPER BY UNITED KINGDOM

JUNE 15, 2020
The United Kingdom of Great Britain, commonly known as the United Kingdom (UK) is a sovereign country located off the north-western coast of the European mainland. United Kingdom actively imports pepper from various pepper producing countries for domestic consumption or for re-export.
In 2018, United Kingdom was reported to have imported a total of 12,185 Mt which 34% of it comprised of whole pepper. In the following year, United Kingdom's import of pepper increased by 8%, totaling at 13,121 Mt. The ratio of United Kingdom's import and export during 2018-January 2020 are 14:1, 13:1 and 8:1 respectively. In January 2020, United Kingdom was reported to have imported a total of 1,152 Mt of which 140 Mt went for re-export purposes. The top five countries of origins of United Kingdom pepper both for whole and ground as of January 2020 were reported to be Viet Nam with 563 Mt, Netherlands with 180 Mt, India with 124 Mt, France with 84 Mt and China with 82 Mt.
In 2018, United Kingdom was reported to have exported a total of 847 Mt of pepper which 40% or 338 Mt of it comprised of whole pepper and 60% or 509 Mt of it ground pepper. United Kingdom on average exported a total of 71 Mt per month in 2018 which peaked in August with 118 Mt. The total revenue of United Kingdom's export of pepper in 2018 was reported to be as high as USD 8.9 Million. Thus, recording the average price of the total pepper exported by United Kingdom at USD 10,750 per Mt for whole pepper and USD 10,407 per Mt for ground pepper.
Year 2019 saw an increase in term of quantity of pepper exported by United Kingdom. United Kingdom was reported to have exported a total of 981 Mt of which 47% or 458 Mt of it comprised of whole pepper and 53% or 523 Mt of it ground pepper, recording an increase of 16% when compared with 2018. The average export of pepper by United Kingdom in 2019 was reported to be at 82 Mt per month which peaked in July with 110 Mt. Although increasing in terms of quantity, United Kingdom's revenue from pepper export was reported with a decrease by 11% as compared to the previous year to a total of USD 7.9 Million. Thus, recording an average price of the total pepper exported by United Kingdom at USD 7,247 per Mt for whole pepper and USD 8,924 per Mt for ground pepper or a decrease by 33% and 14% respectively as compared to 2018.
As of January 2020, United Kingdom was reported to have exported a total of 140 Mt which 73% or 102 Mt of it comprised of whole pepper and 27% or 38 Mt of it ground pepper. Thus, recording an increase of 53% when compared to the same period in 2019. As of January 2020, the total revenue of pepper export by United Kingdom was reported to have reached USD 732,000, recording an increase of 8% as compared to the same period in 2019. The average price of the total pepper exported by United Kingdom as of January 2020 was reported at USD 3,803 per Mt for whole pepper and USD 9,052 per Mt for ground pepper.
Pepper from United Kingdom is mostly traded in European countries. As of January 2020, United Kingdom's top 5 Country of destinations for its pepper were reported to be Netherlands with 80 Mt (an increase of 53 Mt as compared to the same period in 2019), Ireland with 14 Mt (a decrease of 35%), Germany with 11 Mt (a decrease of 45%), United States of America with 7 Mt (an increase of 5 Mt) and France with 5 Mt (an increase of 45%). The decrease of export to Germany was the result of Germany directly imported pepper from producing country such as India (an increase of 22% or 16 Mt as compared to the same period in 2019). 

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IPC PEPPER MKT REPORT No. 24/20, 8 - 12 June 2020

LOCAL MARKET REPORT
Market this week showed mixed response with a rather positive outlook as only Malaysia origin was reported with a decrease. In local market, Malabar black pepper was reported with an increase of 1% as compared to the previous week at an average of USD 4,167 per Mt. Indonesia black pepper was reported with significant increase of 11% as opposed to the previous week averaging at USD 2,134 per Mt. The increase of Indonesia pepper could be contributed to the increase of demand while the stock were limited as well as the strengthening of Indonesian Rupiah against US Dollar (IDR 14,057 @ USD 1), an appreciation by 1% recorded. In local currency, the price of Indonesia black pepper increased to an average of IDR 30,000 per Kg from IDR 27,500 per Kg in previous week. Whilst, Indonesia white pepper was reported stable averaging at USD 3,166 per Mt. Malaysia black pepper was reported stable at an average of USD 1,726 per Mt whilst Malaysia white pepper was reported with slight increase of 1% when compared to the previous week at an average of USD 3,141 per Mt. Furthermore, Viet Nam black and white peppers were reported with an increase of 2% and 3% respectively as compared to the previous week at an average of USD 2,199 per Mt and USD 3,023 per Mt respectively. Sri Lanka black pepper was reported stable and was traded at an average of USD 2,722 per Mt. China white pepper was reported with an increase of 1% as compared to the previous week averaging at USD 4,225 per Mt locally.
INTERNATIONAL MARKET

International market showed a similar trend as the local market. India black pepper was reported with the same 1% increase as compared to the previous week at an average of USD 4,431 per Mt. Continuing the trend of the farm gate price, Indonesia black pepper was reported with significant increase of 10% as compared to the previous week averaging at USD 2,605 per Mt whilst Indonesia white pepper was reported stable at an average of USD 3,761 per Mt. In response to the harvest season, Malaysia black and white pepper were reported with 2% deficit respectively when compared to the previous week averaging at USD 3,601 per Mt for black pepper and USD 5,156 per Mt for white pepper. Furthermore, Viet Nam black pepper 500 g/l was reported stable with slightly increase averaging at USD 2,540 per Mt whilst Viet Nam black pepper 550 g/l and Viet Nam white pepper were reported with an increase of 1% respectively as opposed to the previous week at an average of USD 2,620 per Mt and USD 3,850 per Mt respectively. China white pepper was reported with an increase of 1% as compared to the previous week averaging at USD 4,425 per Mt internationally.

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VIETNAM - PEPPER MARKET UPDATE 15TH JUNE - WEEK 25

Pepper market week 24 was down in value of about 2.7% due to a collectors in Daksong (main pepper area) which has lost liquidity and unable to pay deeply in debts.

This cause to a lots of farmers/middlemans in a panic and forced to close the consignment of goods at other collectors warehouse to recover cash to avoid the risk of consignment, causing the price to drop quickly by 2.5% in 1-2 days (the material from 55,000 VND has dropped sharply about VND 53,500 as of today).

After the shock reduction, the market seems to have regained its balance and the upward trend/stable continues to be clearly shown by the increasing demand from oversea importers during the past week. Despite difficulties due to Covid - 19, the new price level has been firmly established because good demand from the EU/ASIA market.

Through a quick survey in raw material area, we would like to briefly outline the situation as follows;

-  Vietnam's inventory is still large. However, the current inventory is scattered from many different person such as;

+ Farmer households (estimated to hold 15-20% of inventory). We assess this stock has no selling pressure as it is concentrated among the wealthiest households. Farmers can stockpiling if prices go down. Its as frozen stock already.

+ Top 10 big exporters keeping around 25,000 tons. Other exporters around 10.000 tons more. Total exporters keeping 30,000 - 35,000 tons (We do not know how much quantity has been sold)

+ Four large domestic agents are holding about 20,000 tons at least.

+ Total exported within fitst 5 months 2020 reach 148.000 tons.

Therefore, regardless of the number of pepper crop production in Vietnam 2020, currently total quantity offering for export is not much available in the last 6 months of 2020.

- Its not much difference in the situation of the new crop 2021 such as drought or heavy rain, and there are also favorable weather areas and disadvantages… However, the main point is many farmers neglect and do not take care of pepper plantation as before because the current price is not attractive enough to take care and maintain. This may be the most important reason for a decrease in production in the coming seasons 2021.

We will have more surveys situation in August & another in October. We hope to give more useful and accurate information in the crop year 2020/2021.

Other information for reference;

- Brazil Currency fluctuations are very erratic with large amplitudes. Currently, inventory available for sale was negligible. Almost had to wait for a new crop at Para at the end of August/September.

- Indonesia It is forecasted that the crop size less by 20% and will be harvested by the end of July. Few boxes maybe available for August shipment for testing market.

- India Reopening again after long time lockdown due to Covid 19. India's market demand continues to increase compared to previous months.

- China Continued to participate in the market, but was less than in June due to the complicated situation of Covid-19. However, we expect more demand will coming in the next 1-2 weeks.

- America continued to participate in the market with orders delivered in the second half of 2020.

- Asia/EU We expect increase from the EU when other origin do not have big quantity for immediate shipment.

- Vietnam currency stronger than USD is foreseen.

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VIETNAM - PEPPER MARKET UPDATE 08 JUNE - WEEK 24

The market has fluctuated throughout the week. However, at the end of the week 23, the market is still in an upward trend of nearly 2% from 54,000 VND on 1^st June and remained stable at 55,000 VND today. The domestic collectors continued to offer in small quantities and was hesitant in a tension between many exporters and domestic collectors/middleman.

After the price has changed dramatically in the last 2 weeks, the current price trend has become stronger and set a new price on the market. Oversea customers bought orders and looking for new inquiries in the third and fourth quarters 2020. However, the exporters was very cautious and only offer spot/prompt shipment instead of forwards shipment as before. Vietnam currency is still stronger trend than USD making Vietnam pepper price also higher.

Other information for your reference;

- In 2006; pepper price remained stable from January to May at 860 USD/MT. However, within 3 months, pepper price increased by 115% to 1,850 USD/MT (convert at current exchange rate).

- In 2011; the price of pepper at the beginning of the season was 4,340 USD but by the end of December it reached 7,122 USD. Increased 64%.

- In 2013 & 2014; the pepper prices at the beginning of the season reached 6,281 USD but increased 48% to 9,315$ in December.

2020;  Pepper prices still were at a loss for many farmers in this crop, a lot of farm households cut their pepper trees and converted other agriculture product. Currently, prices with increasing tendency have also stimulated farmers to take more care in their pepper plantation. However, the drought situation and many farmers who have changed to another product/cut their plantation not only in Vietnam but also other countries such as Indonesia/Brazil/Cambodia…We have a forecast that total crop production in 2021 will be significantly affected.

We will have a tour to survey the situation of pepper crop 2020 again from June 9 to June 17, 2020 and we will try to collect information to update you with the details in July.

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