VIETNAM PEPPER MARKET UPDATE 20TH OCT 2020 – WEEK 43

 

 

 

Every year from August to October, there are storms, tropical depressions in the central provinces of Vietnam. However, this year, natural calamities have happened quickly and take the worst consequences in recent years. All regions in Vietnam are continuously affected by storms and tropical depressions, especially severe flooding has been happening in the central provinces of Vietnam in which;

-           Quang Tri Province; Severely flooded, this is also a quite famous province for pepper because farmers focus on a sustainable program and quality was low pesticide residues. Quang Tri crop size is about 2,500 - 4,000 tons/year. However, facing severe natural disasters, it is likely pepper plantations in Quang Tri province will be completely destroyed.

-           Heavy rain and flood in early October affected many places in some key raw material areas such as Tuy Duc, Dak RLap, Dak Song in Dak Nong; Cu Kuin, Ea H’leo, Krong Nang, Cu M’Gar,… in Dak Lak. Therefore, the possibility of disease and pest attack to the pepper vine is foreseen while pepper plantation is very sensitive to weather conditions. If the weather continues to change suddenly, it will almost seriously affect the yield of the 2021 crop.

 

Pepper prices increased rapidly with an increase of about 5% for black pepper and 6% for white pepper within 1 week. Demand is pushed up from China and other countries such as USA/ASIA ... The Chinese government also gradually loosened measures for agricultural products between two countries, pushing the demand up rapidly (pepper prices increased 4%, Star Anise 10-20%, cinnamon/cassia also increased from 5 - 10% within 1 week).

Demand has risen again while inventories have decreased significantly at the end of the season. Therefore, the material traded on the market is not abundant and very limited quantity was done. Farmers and domestic collectors do not offer raw material from yesterday.

In addition, unfavorable weather factors have reinforced confidence in the 2021 crop with reduced quantity and encouraged farmers/middlemen and even exporters to increase stockpiling and do not rush to offer. Some said they can stockpile for the next 3 years and believe the market can not come down in medium term.

Many big buyers are interested to buy the current price for long distance shipment 2021, however processors and exporters are cautious and withdraw.

 

Export: According to the General Department of Vietnam Customs, in the first 9 months of 2020, Vietnam exported 220,193 tons of pepper with a turnover of 489.5 million USD. Compared to the same period in 2019, the export volume decreased by 5.8%, the turnover decreased by 17.5%.

 

MONTHLY AVARAGE PEPPER PRICE 2018 - 2020 FOR REFERENCE

 

 

MONTH	BLACK PEPPER			WHITE PEPPER
	2018	2019	2020	2018	2019	2020
1	3.773	3.313	2.340	5.918	3.654	3.255
2	3.481	2.512	2.130	5.413	3.251	3.218
3	3.357	2.448	2.160	5.061	3.169	3.127
4	3.040	2.414	2.109	4.624	2.970	3.150
5	3.084	2.365	2.184	4.540	3.037	3.182
6	3.085	2.376	2.285	4.679	2.883	3.221
7	2.970	2.447	2.371	4.240	2.516	3.475
8	2.817	2.370	2.445	4.009	2.721	3.519
9	2.983	2.388	2.416	3.944	3.093	3.561
10	2.891	2.333		3.933	3.024
11	2.972	2.274		4.733	3.155
12	3.016	2.282		4.301	3.368
AVARAGE	3.122	2.460	2.271	4.616	3.070	3.334

 

 READ MORE NEWS ABOUT WEATHER IN VIETNAM LAST WEEK...

IPC MARKET REPORT No. 42/20, 12 - 16 October 2020

 

 

16 October 2020

MARKET REPORT

Market this week showed a mixed response. In local market, Malabar black pepper was reported stable with a marginal decrease at an average of USD 4,379 per Mt. Indonesia black pepper was reported stable with a marginal increase averaging at USD 1,964 per Mt. Whilst, Indonesia white pepper was reported with 2% deficit when compared to the previous week averaging at USD 3,690 per Mt. The decrease of Indonesian white pepper could be contributed to the oversupply in local market. Malaysia black and white pepper were reported with 4% and 1% deficit respectively as opposed to the previous week averaging at USD 2,258 per Mt for black pepper and USD 3,699 per Mt for white pepper. Furthermore, Viet Nam black and white pepper were reported stable with a marginal increase to an average of USD 2,097 per Mt for black pepper and USD 2,831 per Mt for white pepper. Sri Lanka black pepper was reported with 1% deficit as compared to the previous week and was traded at an average of USD 3,050 per Mt. China white pepper was traded at an average of USD 4,192 per Mt Locally.

International market was reported with a rather stable outlook as only Indonesia white pepper recorded a decrease. India black pepper was reported stable with a marginal decrease at an average of USD 4,652 per Mt. Indonesia black pepper was reported stable with a marginal increase at an average of USD 2,402 per Mt. Whilst, Indonesia white pepper was reported with 2% deficit as compared to the previous week averaging at USD 4,336 per Mt. Malaysia black and white pepper continued to be reported stable and unchanged. Furthermore, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper were also reported stable and unchanged. China traded its white pepper at an average of USD 4,392 per Mt internationally.

International market was reported with a decreasing demand from USA and Europe. Muntok white pepper in US Market for CF October/November was reported at USD 4.200 - USD 4,300 per Mt.

 

SPICES MARKET UPDATE 12TH OCT 2020 – WEEK 42

 

PEPPER 

 

Pepper market remained stable during the past week. Heavy rain in all provinces of Vietnam due to typhoons and tropical depressions, the farmer offered raw material is slower than in previous weeks but prices remain unchanged the whole of the week.

The weather may not really affect the 2021 pepper crop and we need more time to evaluate and analyze. However, due to limited fertilization by farmers, the string of peppercorn was sparse, the phenomenon of sparse string in pepper spreading from almost all key pepper areas of Vietnam. In addition, the price was low while the labor cost increases steadily every year. It will significantly affect the yield for the 2021 crop especially for light berries.

Compared to recent years, October & November is quite sensitive on the price to steady/firmer trend when the inventory has been reducing, selling pressure will be lower than usual. The new season crop 2021 still has 3 to 4 months to start (in mid-January, gradually harvested in Daknong area, but the main crop is still in March as usual). 

Due to the influence of Covid, many different countries reduce buying and not inventories, especially China. If the situation of Vaccine improves and becomes clearer, many countries will increase buying volume in the new season 2021. 

 

We will have another survey pepper crop in Oct/Nov and report will be sent you for reference in next month.

 

 

 

CHECK OUR OFFERS @

https://offers-peppertrade.blogspot.com/2020/10/vietnam-pepper-offer-october-10th.html 

VIETNAM PEPPER MARKET UPDATE 5TH OCT 2020 – WEEK 41

 

Vietnam; Exported roughly 19,120 tons of pepper in September bringing the total first 9 months of 2020 to 221,036 tons. Compared to the same period in 2019, the quantity of exports has decreased by 12.370 tons, equivalent to a decrease of 5.3%, the price today is 20% higher compared with the same time in 2019.

However, the prices, still much lower than farmer expectations while labor cost/interest rate is increasing yearly, have put pressure on increased credit debt, which has pushed most farmers in key growing areas of Vietnam into a difficult situation. In the past few years, pepper prices have been low, many farmers no longer invest in and take care of pepper plantations as before. As a result, although the acreage of pepper has decreased only around 10 - 15% but many pepper plantations have been exhausted make decline in overall productivity. A significant decrease in output from Vietnam starting this year and continuing to happen next few more years could contribute to a sharp decrease in the global supply of pepper even crop size may increase in Brazil/India next year..

Last week, pepper demand globally was low, but the Vietnam pepper pricing continued to move sideways with little change. After a long holiday in the first week of October in China, we expect global demand to increase in the next 1 or 2 weeks for 4th quarter shipment.

Cambodia; According to statistics, pepper prices decreased from 9-10 USD/kg in 2016 to 2.5-3USD/kg in 2018 and only 1.5-2 USD/kg in 2019-2020. However, production cost is still at 2.59 USD/kg. For this reason, many pepper growers and pepper processors have cut down on labor, limited maintenance on farms and some have even given up growing pepper to switch to other products.

Indonesia; continued to offer black pepper at quite competitive prices, but the price of white pepper was still very high compared to the whole market at 4,100$ - 4,250$/MT despite some downward trend due to low demand.

 

Brazil; Still continuing to offer in line, the density of pepper lower than expected were reported from many different importers in Vietnam and not easy to offer BASTA quality at the moment.

 

Malaysia; black and white pepper recorded stability with a slight decrease, averaging at USD 2,418$/ton and 3,802$/ton, respectively

Sri Lanka; black pepper recorded an increase of 1% compared to last week, averaging at 3,140$/ton

Chinese; white pepper was stable with a slight increase and traded at an average rate of 4,100 USD/ton.

India; black pepper was reported with an increase of 2% compared to last week, averaging at 4,776 USD/ton. New crop 2021 we heard maybe better than 2020.

 

CHECK OUR OFFERS @
https://offers-peppertrade.blogspot.com/2020/10/vietnam-pepper-offer-october-2020.html

MARKET REPORT - CLOVES

Comoros small crop of about 1500-2000 mts is almost sold, indications from that origin at $ 4650
Madagascar new crop in October is likely to be much smaller than last year, around 8000 mts, price for the same will start by middle October, 2020.
Indonesia has a good crop and is having steady demand from Middle East and Africa. The colour this year is not as good as all years . Current price indication is USD $ 4500/- PMT
Brazil's last year cloves crop was big, hence we estimat this year's crop will be a small one.
 

Currently, India and Indonesian cigarette companies are not active in the market, which is reflecting the existing weak sentiment in the market. As and when either of these markets become active, we may see firm tendency.

Sri Lanka
Srilanka crop starting in November expected to be above average.from reports from farmers it's anticipated to be around 2500-3000 tons, if weather conditions are favourable till harvest.
Harvesting begins in mid November and offers expected in mid December.
Quantity of oven dry LAL PARI will exceed last year as more and more farmers and traders installing more ovens.
Current prices are high compared to other origins due to lack of materials or rather poor arrivals, therefore there is no selling pressure on the side of farmers and traders.
But once the new crop arrival starts we can expect the prices to match the demand.

 

MALAYSIA : Lower pepper production expected this year

 

KUCHING Monday, 28 Sep 2020

Malaysia’s pepper production is expected to drop by between 10% and 20% this year due mainly to poor farm maintenance.

Malaysian Pepper Board (MPB) director-general Stanley Liew anticipates the country’s 2020 production volume to fall to about 30,000 tonnes from between the 34,000 and 35,000 tonnes a year recorded previously.

“The lower production volume is because of poor farm maintenance.
“If you do not fertilise your pepper vines, this will affect productivity (yield) and the berries will not be good, ” he told StarBiz.

Pepper farmers in Sarawak, who contribute more than 95% of Malaysia’s production output, are currently into the tail-end of harvesting their new crop.
Also producing pepper are Johor and Sabah.

The harvesting activities, according to Liew, has been delayed this year due to the enforcement of the movement control order (MCO) to contain the spread of the Covid-19 pandemic in Malaysia.

Smallholders are reported to have reduced fertiliser input for their pepper gardens due to the prolonged depressed global pepper prices.

Kuching Grade 1 white pepper plunged to a recent low of about RM13,500 per tonne from a historical high of RM50,000 per tonne in 2016, while Grade 1 black pepper was down to RM7,500 per tonne from an all-time high of RM30,000 per tonne.

However, the prices have since recovered to RM14,700 per tonne for white pepper and RM8,250 per tonne for black pepper due to increasing demand.

The MPB, according to Liew, is paying about RM10 per kg (RM1,000 per tonne) ex-farm to purchase special grade black pepper from the planters.

Liew attributed the rebound in domestic prices to a recovery in the global market due to increased buying activities post-MCO.

To help smallholder pepper farmers, the government has approved RM16.11mil under its stimulus package for farm maintenance support.

The aid is disbursed via vouchers to farmers to buy fertiliser and farm tools.

Liew said the MPB is in the midst of distributing the vouchers nationwide to eligible farmers who together own about 5,370ha of pepper gardens.

To boost new planting, he said, MPB provides subsidies of RM26,000 per ha for two years to help smallholders to expand their farms.

Last year, the subsidy was for the establishment of 350ha of new planting, and for 2020, it is for 115ha.

“We encourage investors to venture into large-scale pepper planting.

“There are now two potential investors, including one from Japan, who are in several rounds of serious discussions on commercial planting with the pepper board, ” said Liew.

He said the MPB is currently drafting licensing and enforcement regulations to regulate, among others, the import and export of pepper to check abuse by unscrupulous businessmen.

“We will be guided by the Federal Attorney General Chamber in the draft of the licensing and enforcement regulations which only require the approval of the Plantation Industries and Commodities Minister as stipulated in the Malaysian Pepper Board Act 656. We are proposing penalties for the offenders, ” he added.

With gazetting expected early next year, the new regulations make it compulsory for companies to obtain a licence and report the import or export volumes of pepper and related matters to the MPB.

Sarawak Deputy Chief Minister and Minister of Modernisation of Agriculture, Native Land and Regional Development Datuk Amar Douglos Uggah Embas claimed last week that there were some unscrupulous traders who have of late been importing pepper from Vietnam and Indonesia and mixing them with the Sarawak Pepper brand and selling them as premium pepper for higher profits.

Uggah asked the MPB to be stringent to check such malpractices to ensure Sarawak Pepper remains a premium product.

Sarawak Pepper is known for its high quality globally and commands a premium price. There are a dozen pepper exporters in Sarawak.

Liew said there were more than 40 pepper agropreneurs in Sarawak who were involved in downstream activities, such as producing pepper powder, pepper packets as well as pepper soap and hand sanitisers.

Some of these value-added products are for the export market.

by JACK WONG
For https://www.thestar.com.my

 

   



 

INDIA:Subdued buying dampens festive spirit in cardamom trade

 



Kochi September 22, 2020

Restrictions on weddings and public events, dwindling demand in the north Indian markets, stagnant export markets hit traders

Despite the ensuing festival season, subdued buying of cardamom from upcountry markets has pushed the trading community in a precarious situation.
“What is happening now is only minimal trade with some specific orders which is not enough to tide over the crisis triggered by the pandemic,” sources in the sector told BusinessLine. The high labour cost and shortage of migrant labour from Theni due to Covid-19 restrictions has forced growers in Idukki to depend on labour that’s available in Kerala, which has increased costs by around 30 per cent, the sources said.

“September and October are considered a good time for a demand boost for cardamom from North Indian consuming markets. But the spread of Covid-19 has hit consumption due to restrictions on weddings, events, etc. Traders are in a dilemma on the dwindling demand, coupled with a stagnant export market due to the pesticide issue in Saudi Arabia,” PC Punnoose, CEO, CPMCS Ltd, said.
The labour shortage is affecting the harvest in Idukki, where 90 per cent of the country’s cardamom is grown. The delay is impacting the quality of capsules which now looks pale yellow in colour instead of flush green. Moreover, movement restrictions on labour affected the upkeep of plantations, as 40 per cent of cardamom plantations in Idukki are owned by farmers from the neighbouring state, he said.

As cardamom plantations are labour intensive, C Sadasivasubramaniam, Secretary, Kerala Cardamom Growers Association, urged the district administration to permit workers to travel from the borders to Idukki. The major threat to plants is the Azhukal disease that requires anti-fungal treatment. “When Kerala government permits free movement of workers through other district borders, why is the district administration in Idukki so adamant in denying such benefits here?” he asked.
“Cardamom capsules has to be plucked at 40-day intervals and any delay can lead to quality reduction, breaking of capsules and less setting for future rounds,” SB Prabhakar, cardamom planter, Pambadampara Estate, said.

The reduced demand in north Indian markets is contributing to a fall in prices; it dropped to ₹1,460 per kg, half of the previous year’s average. Copious amounts of rains in September in growing areas added to the bearish sentiment, he added.

Guatemala is expecting a good crop this season due to ideal weather and the prices are hovering at around $17. As prices in India have come down, the sector could export more to the Gulf nations, including Saudi, after resolving the pending issues, he said.
The auctioneers pointed out that the market is witnessing selling pressure as farmers are liquidating their stocks at auctions fearing a further price drop.

V Sajeev Kuma for:
www.thehindubusinessline.com