VIETNAM SPICES - A COMPREHENSIVE OVERVIEW - UPDATE 26TH OCT 2020 – WEEK 44

 

 

 

 

1/ PEPPER

 

According to the Vietnam Customs data, in the first 23 days of October, Vietnam exported 15,405 tons of pepper and Vietnam exported approximately 240,000 tons of pepper in the first 10 months of 2020. This is a very impressive figure as the total production of the 2020 crop is predicted from various sources from 230-250,000 tons. Although Vietnam imports from other countries such as Indonesia/Brazil/Cambodia around 24.841 tons, the inventory from the old crops 2 to 3 years ago such as 2018 & 2019 has been gradually reduced. We will not be surprised stock carry forward of this year 2021 are forecasted to plummet and less than so much carryover 2020.

Covid 19 control has been better in many countries that speed up many countries to increase production while inventories almost tight. Therefore, many different countries to increase their purchase order starting from the 4th quarter to supplement production in 2021. This has resulted in many spices items having very impressive price increases such as;

- Pepper; increased by 10% within 1 week from October 16-25

- Cassia/Cinnamon; 10% price increase within 1 day from last week

- Star Anise has achieved a historic increase in 60% within 1 month.

In addition, an increase in the consumption of convenience foods such as snacks, soups, sandwiches, and frozen products are expected to a surge in demand in the global spice market in the coming years.

China import pepper in the third quarter was only 4,131 tons, around 34.9% compare with the first quarter and only 17.0% compare with the second quarter. Total import in 9 months was 40,305 tons of pepper. Therefore, China has started to increase the quantity of purchases for the fourth quarter, which has significantly contributed to the hot rise in pepper prices last time. Otherwise, in the key pepper areas of Vietnam, it is forecasted that output will drop sharply in 2021 due to the heavy effects of climate change such as storms, floods, and limited care from the farmer. That's contributed to stabilizing pepper prices and have less opportunity to decrease the prices in the medium term.

 

 

Other highlights last week;

 

The Malaysian Pepper Commission (MPB) predicts that the pepper production in 2020 will decrease by 20% and reached only 30,000 tons. The reason is due to poor storage of pepper on the farm as well as farmers less take care for the pepper plantation when pepper prices are low.

Export data first 9 months of 2020;

 

- Asia imported 50.7% Vietnam pepper and continues to be the largest pepper importer of Vietnam, but decreased 5.0% over the same period. The leading importer is China with an import volume of 40,305 tons, down 25.1% over the same period; India imported 10,760 tons, down 37.9%; Saudi Arabia imported 9,989 tons, up 14.0%; Pakistan imported 8,566 tons, down by 4.0%...

 

- European imports ranked second, up 1.1%, and roughly for 20.9% of the total export volume of Vietnam Pepper. Leading by Germany imported 8,645 tons, down 5.3%; The Netherlands imported 5,873 tons, down 9.3%; Russia imported 4,606 tons, up 10.2%; The UK imported 4,241 tons, up 20.9%. France imported 3,153 tons, up 41.8%; Poland imported 2,642 tons, up 25.5%...

 

- The third-largest importer around 20.8% in Latin America and increased by 3.0% over the same period. Of which the United States is the largest pepper import from Vietnam, imported 42,040 tons, up 8.3% over the same period and roughly for 90.9% of the Latin America market share. Canada imported 2,063 tons and increased 0.8% over the same period last year.

 

- African imports around 7.7% and increased by 1.0% over the same period last year. The main is Egypt, which imported 7,627 tons, up 26.5%. Imports decreased in South Africa and Senegal with a decrease in 15.3% and 17.2% respectively.

The 3 largest pepper importing countries of Vietnam are the US, China, and India with the total import volume of 93,105 tons occupying 42% of the total export volume of Vietnam Pepper.

 

 

No	Market	9 MONTHS 2018	9 MONTHS 2019	9 MONTHS 2020
1	ASIA	52,9%	55,7%	50,7%
2	EU	19,8%	19,8%	20,9%
3	Latin America	19,2%	17,8%	20,8%
4	Africa	8,0%	6,7%	7,7%
Total		100%	100%	100%

 

 

2/ CASSIA

 

Prices up during the past 2 weeks such as;
- 10% for cassia broken within 1 or 2 days from last week
- 16% for cassia split last 2 weeks
- 9% for cassia cigarette/sticks.

Prices increased rapidly due to a shortage of supplies from China/Indo… while Vietnam's crop output was not as expected. Harvesting is also very difficult due to the heavy rain and storms/tropical depression. Demand continues to increase from USA/EU/… has made Cassia prices are forecasted to continue to increase in the near future.

 

 

3/ STAR ANISED

 

Huge demand from different countries such as USA/EU/China has made the price of anise rose dramatically with an increase of 50 - 65% in just 1 month. Prices are currently high and there is no chance of a decrease in the short term.



PLEASE CHECK SOME OF OUR PRICE INDICATIONS CLICK HERE:
https://offers-peppertrade.blogspot.com/2020/10/i-would-like-to-give-you-indication.html

 

 

 

                                                                                                                                                       

 

VIETNAM MKT UDATE No. 43/20, 19 - 23 October 2020 IPC

 

 

Market this week showed a mixed response. In local market, Malabar black pepper was reported stable with a marginal increase at an average of USD 4,383 per Mt. Indonesia black pepper was reported with an increase of 4% as compared to the previous week averaging at USD 2,039 per Mt. Whilst, Indonesia white pepper was reported with 1% deficit when compared to the previous week averaging at USD 3,636 per Mt. The decrease of Indonesian white pepper could be contributed to the ample supply in local market. Malaysia black and white pepper were reported with 3% and 2% deficit respectively as opposed to the previous week averaging at USD 2,180 per Mt for black pepper and USD 3,626 per Mt for white pepper. Furthermore, Viet Nam black and white pepper were reported with an increase of 2% and 4% respectively as opposed to the previous week to an average of USD 2,131 per Mt for black pepper and USD 2,958 per Mt for white pepper. Sri Lanka black pepper was reported with 2% deficit as compared to the previous week and was traded at an average of USD 2,996 per Mt. China white pepper was reported with significant increase of 8% when compared to the previous week and was traded at an average of USD 4,513 per Mt Locally.

International market also showed a mixed response. India black pepper was reported stable with a marginal increase at an average of USD 4,655 per Mt. Indonesia black pepper was reported with an increase of 4% as compared to the previous week at an average of USD 2,488 per Mt. Whilst, Indonesia white pepper was reported with 1% deficit as compared to the previous week averaging at USD 4,276 per Mt. Malaysia black and white pepper were reported with 2% and 1% deficit respectively when compared to the previous week at an average of USD 3,725 per Mt for black pepper and USD 4,940 per Mt for white pepper. Furthermore, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper were reported stable and unchanged. China white pepper was reported with an increase of 7% as opposed to the previous week and was traded at an average of USD 4,713 per Mt internationally. 

 

 

 

 

 

 

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
----------------------------

*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.