Vietnam - pepper market update 1st August 2022 – Week 31.

Pepper price has increased over 2% in July.

Last week, pepper price in Vietnam was almost unchanged with a stable price trend when the trading volume on the market was not much. Farmers and dealers did not have any pressure to sell as inventories dropped sharply in the first 7 months of the year. The upcoming market trend is still difficult to forecast, but it is likely that the market will move sideways or increase in price as EU / USA / ASIA / AFRICA… will have to increase imports pepper to prepare for orders by the end of 2022.

 

 

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MEXICAN ALLSPICE PIMIENTO CROP UPDATE

 

 

The new Allspice Pimiento crop is arriving delayed.
Many of the trees are flowering just now and some of them are in the second flowering.
The fruits are very small yet and the most of the trees do not have fruits yet. 

For that reason we are considering that the harvest time could be arriving almost three weeks later  and the shipments will not be be ready for loading until September, depending also of the availability of the containers which is still unstable. 

Vietnam Pepper market update 27TH June 2022 – Week 26

 

 

The first 17 days of June recorded the highest import volume of China at 1,603 tons, followed by the United Arab Emirates, Singapore and the United States.
The return of Chinese purchases is expected to be a sign of prosperity when the pepper market has been quiet during the past 1.5 months.
According to forecast, the total pepper export output in the first 6 months of Vietnam will reach over 125,000 tons, down 29,000 tons, equivalent to a decrease of 19% compared to the same period in the first 6 months of 2021 (154,038 tons).
A significant reduction when the big market is China imported just over 3.500 tons (down to 90% compared to the same period in 2021 due to the application of zero covid policy at the border).

 

Cardamom prices fall on weak demand, exports may receive a boost

Cardamom prices are down from around Rs 1,000 per kg to Rs 750 to 850 per kg. The market expects the rates to decline further with a new harvest season round the corner

 PK KRISHNAKUMAR JUNE 14, 2022 / 06:33 PM IST

Robust production and tepid demand have caused prices of cardamom to decline, raising concern among growers. Small cardamom prices have fallen by over 20 percent in the last few weeks.

As cardamom growers fret over the plummeting prices, exporters reckon the low prices will boost India’s competitive edge in the global market and help them to match the record shipments of the last financial year.

Weak demand, both in the domestic market and overseas, has pushed down the cardamom prices from around Rs 1,000 per kg to Rs 750 to 850 per kg. The market expects the rates to decline further with a new harvest season round the corner.

Exports of the spice fetched all-time-high volumes and earnings in 2021-22, according to the latest figures of the Spices Board. The country exported 10,572 tonnes of cardamom worth Rs 1,375.70 crore in the year. The volumes were higher by 63 percent and value by 25 percent over the previous year.

UAE overtakes Saudi Arabia

The record exports were achieved despite Saudi Arabia imposing stringent rules on pesticide residues. Until a couple of years ago, Saudi Arabia used to be the biggest buyer of Indian cardamom. The United Arab Emirates (UAE) has now overtaken Saudi Arabia in cardamom purchases.

According to the available statistics for 2020-21, the UAE purchased 1,724 tonnes of Indian cardamom compared to 842 tonnes by Saudi Arabia.

“The exports have spread to many other countries. Besides other Gulf countries, Bangladesh has also emerged as a big buyer,’’ said Anjo Jose, executive director of Mas Enterprises, a major exporter.

Even going by the 2020-21 data, exports to countries like the US, Kuwait, Bangladesh, Canada, Singapore and Qatar have increased significantly over the previous year. This is expected to go up further in FY22 as shipments have risen sharply.

Competition from Guatemala

Although cardamom from Gautemala, the largest producer of the spice, is cheaper than the Indian variety, many buyers are going for the superior quality of the latter.

“Buyers have come to recognize the premium quality of Alleppey green bold cardamom. Indian cardamom at $14-15 per kg is around $3 higher than the Gautemalan variety,” said Hemen Ruparel, chief executive of Samex Agency, another exporter.

But presently there is a shortage of good quality export cardamom in the Indian market, which has led to the dominance of Guatemalan cardamom in global trade.

“Exporters are waiting to buy fresh stock in the new harvest season, which is expected to be in full swing by July-August,’’ Jose said.

Growers complain that climate vagaries are affecting the production quality of cardamom, grown mostly in Kerala and a few regions of Tamil Nadu and Karnataka.

“Pest menace has gone up. The chemicals we had used earlier are banned now and the new ones that are approved are not effective in controlling it. As a result, the quality of production is coming down,” said K S Mathew, a major grower.

Production in 2021-22 is estimated at over 25,000 tonnes compared to 22,520 tonnes in the previous year. The surplus production has come from new growers and non-traditional areas.

“While the big estates get hardly 300 kg an acre, the small ones are able to get almost double the quantity,” said M M Lambodharan, general secretary of the Spices Planters Association.

Weak demand from the North Indian markets and with exporters waiting for the new season, cardamom prices have become non-remunerative for the growers.

“The growers need Rs 1,200 per kg to break even considering the increasing cost of fertilizer and pesticides. Though the growing regions received copious rains in May, extreme heat this month is causing the plants to wilt. At this rate, the crop could be short by 40 percent in the next harvest," Lambodharan said.

Earlier during the year, when cardamom prices fell below Rs 800 per kg, the Spices Board implemented new steps restricting the total quantity per auction for a licensed auctioneer to 65 tonnes.

Of this, growers were allowed 70 percent of the share while the quota for licensed dealers was limited to 30 percent. This was to check the re-pooling of cardamom by dealers at auctions, which the growers said was leading to a price fall. But that was in force only for over a month and was relaxed when the prices rallied.

PK KRISHNAKUMAR is a journalist based in Kochi.

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https://www.moneycontrol.com/news/business/cardamom-prices-fall-on-weak-demand-exports-may-receive-a-boost-8686031.html

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Spices trend indications for 2022 - Black Pepper

SPICEXIM are International Brokers for seeds, spices, herbs and dry fruits. SPICEXIM is a multi-generation company with a long and respected history and has been in the business for more over a century. Below they try to provide a snapshot for different spices in 2021 and trend indications for 2022.

Black Pepper

Black pepper prices continued to firm in second half of 2021 on expectations of smaller crops in 2022, especially from the biggest origin – Vietnam, where farmers/planters disappointed at the lower prices started neglecting their plantations.
Average sized crops across Indonesia and Brazil were reported, which kept markets stable. Sri Lankan new crop is smaller, and prices have firmed up on Indian buying.

More controls have been imposed in EU for salmonella from Brazil pepper, effective from January 2022.

We expect black pepper to remain stable during the first quarter of 2022, with new Vietnam crop and Chinese New Year holidays and firm up during the middle part of the year, depending mainly on demand from China and USA.

Spices trend indications for 2022 - CLOVES

SPICEXIM are International Brokers for seeds, spices, herbs and dry fruits. SPICEXIM is a multi-generation company with a long and respected history and has been in the business for more over a century. Below they try to provide a snapshot for different spices in 2021 and trend indications for 2022.

Cloves

Clove prices moved sharply in 2021 on Indonesian small crop, buoyed by high price buying by Indonesian cigarette companies and Indian demand.

Good crops from African origin helped stabilize the prices, however the shipping line congestion complicated situation for importers.

Indonesian origin prices continue to be high, whereas African origins are lower due to the bureaucratic entanglements and shipping line issues.

Current muted Indian demand will be keenly watched during the first quarter of 2022, as new crop Madagascar consignments reach the Indian shores in Jan.

We expect cloves prices to remain stable to weak, with price spikes depending on buying by Indonesian cigarette companies

SPICES TRADE - CONSIDERATIONS ABOUT 2021 YEAR - TRENDS FOR 2022

If 2020, confined us to our homes, 2021 allowed us some freedom and many challenges in our efforts to return to the normalcy of pre-pandemic. 

THE CONTAINER

This metal box, the basic clog in the global supply chain system became the most sought after and premium component in 2021. As freight rates reached dizzying heights, finding suitable food grade empty containers at origins became a treasure hunt and in the end stages highest bidding auction situation for exporters, as shipping lines raked in billion $ profits.

The spices trade was faced with disrupted supply chain issues - farmers and planters inability to take care of crops and plantations due to lockdown restrictions and/ or reduced labour forces and weather challenges 2021, also demonstrated the inherent highly volatile nature of the spices trade. 

Many spices showed a sharp price spike on fundamental reasons but were unable to maintain the high levels due to the unstable demand situation across the globe. 

The hand-to-mouth buying trend visible in 2020 continued in 2021 and looks to be approaching the just-in-time buying philosophy, propagated by the Japanese in 2022. Extreme risk aversion is now a dominant theme, and it will only spread across major importers/buyers as new variants and vaccination protocols emerge.

For India as a major spice origin, the challenge lies in providing pesticides controlled spices, as more and more countries become stringent in their  requirements. As on date, it does look like a Herculean task unless government agencies work together with private players.

Currencies remained volatile as ever, (special mention for the Turkish Lira, which gave strong competition to the cryptocurrency markets) with the US FED continuing to print USD and dropping hints of tapering in 2022. 

With Chinese New Year in early February, Ramadan starting from early April and the big behemoths buying during the first couple of months for their yearly requirements - we expect a lot of volatility and good demand for most spices up to April, 2022 - by when hopefully also the Omicron situation will stabilize across most countries.