IMPORTANT UPDATE ON PEPPER MARKET

 

 

October,22  2020

After a relative quiet and dull season for pepper, the sting seems to be in the tail. We would like to bring you up to speed for the 3 most important pepper exporting countries.

Vietnam
We already noticed that pepper gardens were neglected by the farmers due to the low prices of the recent years. The outlook for 2021 was that we would face a lower crop yield. Mother nature worsoned the situation significantly. Recent heavy rainfall and storms in Vietnam created quite some damage. We have received several reports on land slides in the pepper growing areas. As a result we see buyers stepping in in order to secure requirements. Most active at the moment are Chinese importers of pepper. New crop is still 3-4 months away.

Brazil
In between crops. New crop is expected be delayed by several weeks and foreseen to be ready for shipment in December only. As reported earlier consensus is found in the expectation that the 2020/2021 crop will be substantial lower by about 40% for the same reason as we found in Vietnam: at current price levels farmers have no interest in investing and mainting their gardens on these low price levels.

Indonesia
In Indonesia we have seen the result of poor maintenance this season already. The output for as well black as white pepper was much lower than previous seasons. With relatively high prices compared to other countries of origin, exports were backed by loyal buyers for specifically Lampong and Muntok pepper. However since last week we spot an interesting situation. Chinese importers have stepped up their buying; mainly for Muntok white pepper. Available quantities are decreasing rapidly. Market is firming up fast.
In general we also see the trend of freight rates increasing for shipments from Asia. 

 

 

VIETNAM FLOODS UDATE AS FORM SATURDAY 17th

 

Situation Update No. 1 - Flooding in Central Viet Nam - Saturday, 17 Oct 2020, 10:00 hrs (UTC+7)

a. The combination of weather systems (Tropical Storms LINFA and NANGKA, and the Inter Tropical Convergence Zone combined with cold air) affected the Lower Mekong Region. This resulted in widespread flooding and landslides in multiple provinces of Cambodia, Lao PDR, and Viet Nam.

b. The floods, landslides, storms, and winds in Central Viet Nam affected an estimated 682K people, 136K houses, 10.4K hectares of rice, crops, and aquatic produce, 362 educational institutions, 14.7 km of roads, and the loss of 332K livestock (cattle and poultry). About 26.3 km of coastal landslide was also reported. Casualties were also reported (55 dead and 12 missing)
.
**highest number reported as of 16 October 2020 source: VNDMA

Vietnam floods and landslides displace 90,000 people as new cyclone nears

READ REPORT ABOUT POSSIIBLE CONSEQUENCES FOR PEPPERTRADE...

October 19, 2020
More than 100 so far reported dead or missing after two storms destroy homes and leave trail of destruction
Floods and landslides in Vietnam are reported to have left at least 102 people dead or missing, while tens of thousands of people have lost their homes to rising water.

Two storms that hit central Vietnam in the first two weeks of October, Storm Linfa and Storm Nangka, brought six times higher than average rainfall, flooding 136,000 houses and forcing 90,000 people to evacuate their homes. A third cyclone is expected to hit the coast in the coming days.

Worst hit is Hue province, some 700km (434 miles) away from the capital, Hanoi. Police and soldiers have been using canoes and boats in Ha Tinh city to reach the most flooded areas to evacuate people and move property to safety. In this city alone, more than 20,700 people were reported to have been evacuated.

In Quang Binh province, 130km away, flood water continues to rise, swallowing up entire houses or burying them beneath landslides. On Sunday 13 households , about 60 people in total, were relocated, as an estimated 3,000 tonnes of rock and soil came crashing down on homes and roads.

Landslides buried a military barracks at Quang Trị in the early hours of Sunday, killing 22 soldiers and officers.

Blue Dragon, a non-governmental organisation that helps at-risk families around Vietnam, is one of a handful of non-profits working in Hue, with help and donations slowly trickling in.

Founder Michael Brosowski said: “Hue experiences floods each year, but the scale and the speed this year is shocking. Local residents now live in a way that is prepared for a natural disaster, but this is on a much larger scale. They’ll have to start all over again.”

https://www.theguardian.com/world/2020/oct/19/vietnam-floods-and-landslides-displace-90000-people-as-new-cyclone-nears
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*SEE UPDATE HERE... 

 

 

 

 

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