PEPPER MARKET REPORT FROM PEARL GROUP

Indonesia is in the period of pepper decline,it is estimated the crop size for 2023 will be around 55000 tons , 10000tons less than the 2022 crop(65000 tons). because people in Indonesia are not interested in pepper in the context of competition with coffee trees due to better coffee prices. At the same time there was a more widespread shift to palm trees. Subjectively, the output figure given by the Indonesian Ministry of Agriculture is always much higher than the actual figure to receive the government's annual support budget. It is expected that Indonesia will harvest in July-August.

Brazilian pepper has always been more competitive in price than Vietnamese pepper, but because Brazil is facing difficulties and is controlled by the problem of Salmonella infection in the EU market, Vietnamese products are relatively competitive in the EU. Recently, to diversify markets, Brazil has also gradually appeared in the Middle East and Africa with lower asking prices than Vietnam due to advantages in transportation costs and geographical location.

Why Production of cloves has plunged in Zanzibar

 

Pemba, Monday, June 12, 2023

Opposition ACT-Wazalendo is blaming the fall of clove production in Zanzibar on the current payment system.

Under the system, a farmer is paid 80 percent of the world market price.  ACT-Wazalendo says this was a disincentive.

Speaking at their first rally in Jadida Ward, Wete District in Pemba, the party’s vice chairman, Mr Othman Masoud Othman, said it was unfortunate that Zanzibar, which was once the leading grower of cloves is witnessing a drastic fall in production.

Mr Othman who is also the Isle’s First Vice President said Zanzibar can produce up to 20,000 metric tons of cloves, but the government has put its hands on the issue, taking away the incentives from the farmers.

“The production of cloves has dropped because the government wanted to run the business. We in ACT say the production and operation of the business should remain in the hands of farmers,” said Othman.

He said what is required was to create an enabling environment for the clove business.

“Right now, we are being told that farmers get 80 percent of the market price, but in reality, after factoring in all the costs, the farmer only receives 38 percent.

He said it was due to that situation that most farmers have stopped taking care of the clover plantations because they no longer see the benefits.

“We at ACT say that production will increase and the people will see the true value of taking care of it,” said Mr Othman.

Bank of Tanzania (BoT) figures show that the value of goods exports in Zanzibar decreased by 25.9 percent to $64.8 million due to the decline in proceeds from the export of cloves and manufactured goods.

The BoT projects that actual export volumes may have fallen by 16.3 percent during the year to April, 2023 to only 7,000 tonnes from 8,400 tonnes of 8,400 tonnes during the preceding year.

This, along with a 19 percent fall in unit price, saw the amount earned through clove exports dropping by a cool 32.2 percent to only $42.5 million during the year ending April, 2023.

Regarding the spiralling poverty among the youth, the vice chairman said it was mainly due to the fact that most of the youth were not given employable skills to enable them take up jobs in industries such as hospitality.

 

  https://www.thecitizen.co.tz/tanzania/zanzibar/act-why-production-of-cloves-has-plunged-in-zanzibar-4267154

 

Vietnam does not face challenge from Cambodia pepper exports to China...

 

Vietnam's pepper exports are not challenged by Cambodia being issued a licence to export its pepper to China directly, according to experts.

05/06/2023

The Viet Nam Trade Office in Cambodia quoted Khmer Times sources saying that Cambodian pepper would be available in China directly after the General Administration of Customs of China (GACC) approved Cambodia’s export proposal.

Accordingly, the GACC approved seven packaging factories and 28 growing facilities for pepper exports in Cambodia.

Le Viet Anh, head of the Viet Nam Pepper Association's office, Cambodia exporting pepper directly to China was not a challenge for Viet Nam's pepper exports immediately because the pepper volume exported from Cambodia to China was not much.

“About 90-95 per cent of Cambodia's pepper output have been exported to Viet Nam, then processors in Viet Nam have re-exported the volume to other countries, including China," said Anh. "Meanwhile, Cambodia has few trading companies, mainly FDI enterprises."

Hoang Phuoc Binh, vice chairman of Chu Se Pepper Association (Gia Lai), said this was normal. Cambodia's pepper had been mainly exported to Viet Nam and re-exported to China. The remaining 10-20 per cent had been shipped directly to China and Europe.

With this permission, the pepper volume exported directly from Cambodia to China could increase, Binh said.

Therefore, according to experts, it could increase competitive pressure on Vietnamese pepper exported to China in the future.

The Viet Nam Pepper Association said Cambodia had been the second largest pepper exporter to Viet Nam after Brazil. In the first four months of this year, Cambodia exported 1,715 tonnes of pepper to Viet Nam, down 64 per cent compared to the same period in 2022. However this was official export, not including several thousand tonnes of unofficial exports.

In the first quarter of 2023, China increased pepper imports from Indonesia, Malaysia and India. In contrast, China reduced pepper imports from Viet Nam. Viet Nam's pepper market share in China's total imports decreased from 39.36 per cent in the first quarter of 2022 to 29.75 per cent in the first quarter of 2023.

Regarding the reduction in Viet Nam's pepper exports to China, Binh said it was not a concern; Viet Nam had accounted for more than 50 per cent of the world's exports. The output of pepper in other markets, such as Cambodia and Malaysia, had been very small. So, China still had to import pepper mainly from Viet Nam.

China imports an average volume of about 50,000-60,000 tonnes of pepper from Viet Nam annually. The export volume of white pepper to this market will fluctuate occasionally.

In the first four months of 2023, China imported 35,000 tonnes of pepper from Viet Nam. In the next six months, Viet Nam will not have any difficulty exporting 20,000-25,000 tonnes of pepper, according to Binh.

The association estimates that Viet Nam's pepper output 2023 will increase by 5 per cent compared to 2022.

In 2022, Viet Nam exported more than 226,000 tonnes of pepper, earning nearly US$963 million, according to the Ministry of Industry and Trade. — VNS

https://vietnamnet.vn/en/vietnam-does-not-face-challenge-from-cambodia-pepper-exports-to-china-experts-2151258.html

Cloves Prices in India Likely to Shoot up in 2023

 

According to recent reports, global demand for cloves has been strong, leading to sustained high prices despite some recent increases. While production levels have been mixed across different origins, favorable 2022-23 crops in some areas have been offset by disappointing harvests elsewhere. As a result, the underlying supply of cloves is expected to become increasingly limited by April due to estimated exports so far and dwindling carry-over stocks.

The latest price indications from European traders suggest that Indonesian cloves are currently trading around $8,750 per tonne cfr Singapore, while Madagascar cloves are in the range of $8,700/tonne cif Singapore. Just a few weeks ago, Madagascar cloves were indicated at $8,400/tonne cif Singapore.

The Comoros cloves crop was reported to be very good due to favorable weather, with an estimated production of 6,000 tonnes, compared to a “normal” crop of about 3,500-4,000 tonnes in previous years. Meanwhile, the Zanzibar crop was described as normal, with an estimated production of about 4,000 tonnes.

However, the Madagascar cloves crop fell short of expectations, with a production of only 11,000-12,000 tonnes, compared to 22,000-23,000 tonnes in the previous year. Additionally, for the third consecutive year, the Indonesian crop was very short, with an estimated production of only 55,000-60,000 tonnes, which is less than half of what this origin achieves during a good harvest.

Brazil’s contribution to the global supply of cloves is negligible, with its 2022-23 crop estimated at no more than 2,000 tonnes. Most of this was sold to the US and South America, mainly for the production of cloves powder. The quality of this year’s harvest is said to be very poor.

In conclusion, while demand for cloves remains strong, the limited supply of the spice, due to mixed production levels and poor harvests in certain origins, is expected to lead to sustained high prices in the coming months.

https://www.turkeydalal.com/

Weak demand, surplus stock, cheaper imports hurt Indian cardamom farmers

Cardamom prices are hovering around Rs 1,000 per kg on average, which the growers say is insufficient as the cost of production has grown manifold.

 

Weak demand and surplus stock are damping Indian cardamom prices down. Prices are expected to remain low in the short term given the decline in exports and subdued buying in the domestic market, in addition to the anticipated increase in stocks thanks to a fresh harvest due in two months.

Cardamom prices are hovering around Rs 1,000 per kg on average, which the growers say is insufficient as the cost of production has grown manifold. Prices rallied briefly to Rs 1,700 per kg in early 2023, before falling again.

The supply of cardamom from Guatemala, its biggest producer, has dimmed the export prospects of Indian cardamom, which is comparatively costlier. Cheaper Guatemalan cardamom, which sells at about Rs. 800 per kg, has started to make its way to the Indian market as well, thus squeezing the demand for the Indian variety.

Per the latest Spices Board data, cardamom exports between April to February 2022-23 stood at 7,031 tonnes, worth Rs 828.50 crore, a decline of 25 percent in volume and 33 percent in value year-on-year. In 2021-22, exports had peaked at 10,572 tonnes, worth Rs 1,375.70 crore

"The demand isn’t strong enough to lift the prices. Cardamom from Guatemala is flowing to the Indian market and is mixed with the Indian variety and sold in north Indian markets and at auctions," said K S Mathew,’ Chairman, Vandanmedu Green Gold Cardamom Producer Co Ltd.

Last year, Guatemala produced about 45,000 tonnes of cardamom, 10,000 tonnes more than its normal output. Indian production was reported to be around 25,000 tonnes. While the Indian harvest comes to the market by the middle of the year, the Guatemalan cardamom arrives towards the end of the year.

According to growers, the next cardamom crop, which is harvested by August, should be good as there has been adequate summer rainfall and good south-west monsoons are predicted. "However, if the monsoons get delayed, it could hit production," said P C Mathew , Secretary, Cardamom Growers Association.

Cardamom cultivation has spread to fresh areas like Idukki district in Kerala, the largest producer of the spice in the country, raising the total output in the last few years. Unlike traditional areas like Vandanmedu, where there are big planters, the new regions have growers with relatively smaller land holdings of about 1 to 5 acres.

``The small growers have lesser expenses as they do not have labour costs as they themselves toil on the land. Hence, they are able to manage at the current price levels. The large estates need to fetch between Rs 1,200 to 1,500 per kg to run their operations as the cost of labour, fertilisers, and chemicals have all multiplied several times,’’ Mathew said. When cardamom prices spurted early this year, the large planters were able to sell some of their stocks.

Unless demand picks up, cardamom prices may fall further with the arrival of the fresh crop. While small farmers too will be affected if prices go below Rs 1,000 per kg, the low prices may help India to compete with Guatemala in the global market.

In the world market, Indian cardamom was costlier than the Guatemalan variety by $10-15 per kg till a few months back. According to exporters, Guatemala has exhausted the majority of its stock and the price difference has dropped to around $1-2 per kg now.

West Asian countries are the biggest buyers of cardamom and the consumption peaks before Ramadan season. This year, the Ramadan demand was more for the significantly cheaper Guatemalan cardamom. The recessionary trend in many countries also hit exports.

"If the prices remain low, then the demand for Indian cardamom can go up before Ramadan next year provided the countries in west Asia liquidate their existing stocks," said a major exporter.

PK KRISHNAKUMAR is a journalist based in Kochi.

IPC PEPPER MARKET REPORT WEEK 20 – KEY HIGHLIGHTS

 

The pepper market this week showed a mix response as some foreign exchange slightly weakened against the US dollar.

The Indian pepper price reported with a decreasing trend this week which partially contributed to the weakening of the Indian Rupee against the US Dollar (INR 82.43 @ 1 USD) or 1% depreciation.

Even though the Indonesian Rupiah weakened against the US Dollar (IDR 14,858 @ 1 USD) or 1% depreciation, both local and international prices for Indonesia reported with an increasing trend this week.

As the Malaysian Ringgit weakened against the US Dollar (MYR 4.52 @ 1 USD) or 2% depreciation, local prices for Malaysian pepper reported with a decreasing trend this week. Whilst, international price for Malaysian pepper continued to be reported stable and unchanged.

Local price for Sri Lankan pepper continued to be reported with an increasing trend for the last two (2) weeks which partially contributed to the strengthening of the Sri Lankan Rupee against the US Dollar (LKR 309.89 @ 1 USD) or 2% appreciation.

Only Vietnamese local white pepper reported with a decreasing trend this week. Whilst, the others remained stable and unchanged.

CARDAMOM

 

May is the last production month of the 22-23 season. New crop will begin until October 2023. 

The season has been a large one for Guatemala and India. Guatemala is still expecting to reach above 55k tonnes of production. A lot of the cargo is still on the way to destinations, and this is limiting upside as importers take profits. India is also a bit pressured lately with rumors of large carry over stocks and a good upcoming production. 

On the other hand, prices this season have reached low levels where additional consumption and demand has been triggered. Added to this is the possible impact of expectations on dryer weather (not yet there). Both of these factors are generating continued interest in the product and are therefore supporting prices.