Pepper prices cooled down due to the lack of Chinese purchasing power

 
After increasing by more than 30% in the three months from December 2023 to February this year, black pepper prices in the domestic market have leveled off and are showing signs of cooling down.

As of the trading session on April 10, black pepper prices in the Central Highlands and Southeast regions fluctuated between 90,000 - 91,000 VND/kg, down 2,000 - 6,000 VND/kg (corresponding to 2 - 6%) compared to end of last month.

Pepper prices decreased in the context of additional supply from the 2023-2024 harvest. Meanwhile, pepper  exports   decreased significantly compared to the same period last year due to the lack of Chinese buying demand.

Preliminary statistics from the Vietnam Pepper and Spice Association (VPSA) show that Vietnam's pepper exports in March reached 25,579 tons, down 28.8% in volume over the same period last year. 2023.

Accumulated to the end of the first quarter, Vietnam exported 56,712 tons of pepper of all kinds, with a turnover of 235.6 million USD, down 26.1% in volume (equivalent to 20,015 tons) and down 0.1% in value. turnover compared to the same period last year.

In particular, exports to China - Vietnam's largest pepper consumption market last year decreased by 95.8%, reaching only 1,083 tons compared to 25,919 tons in the same period. This number is even lower than the 2,138 tons achieved in the first quarter of 2022, when China was closed due to the COVID-19 pandemic.
This result makes China fall to 14th place in Vietnam's pepper export market in the first quarter, accounting for 1.9% market share compared to 33.8% in the same period.

This is contrary to many previous forecasts that China's demand will increase after the Lunar New Year and push pepper prices higher.

In addition to China, pepper exports to the African market also decreased by 23.1%, of which Egypt decreased by 9.7% to 1,389 tons and Senegal decreased by 38.0% to 588 tons.

However, the positive point is that  import  demand  of some other key markets is rebounding after a decline last year.

For example, the US market, Vietnam's number one pepper export market in the first quarter of the year reached 15,185 tons, an increase of 27.9% over the same period and accounting for 26.8% of the market share.

In addition, exports to India reached 3,793 tons, an increase of 19.6%; Korea reached 2,164 tons, a sharp increase of 179.9%.

Exports to Europe also increased sharply by 24.7% over the same period in 2023 and accounted for 26.3% of the market share, of which the largest export to Germany increased by 113.8% to 3,701 tons; The Netherlands increased by 76.9% to 2,598 tons; exports also increased in Russia (25.1%); France (8%); Spain (32.3%), Italy (203.6%)…

The average export price of black pepper in the first quarter reached 3,966 USD/ton, white pepper reached 5,552 USD/ton, an increase of 562 USD/ton and 593 USD/ton respectively compared to the same period in 2023.

Will pepper prices still stay high in the near future?

 
Although there is a downward adjustment, pepper prices are expected to remain at a high level in the near future.

In a recent report, the Import-Export Department (Ministry of Industry and Trade) forecasts that pepper prices in producing countries will continue to remain high due to increased demand, while supply from producing countries Indonesia, Brazil, Malaysia and Cambodia are not enough to compensate for the decrease in exports from Vietnam.

Currently, consumers around the world are willing to pay high prices for high quality pepper. In particular, the US, EU, Middle East markets... increase the need to import products that meet sustainability in social, environmental and economic aspects throughout the supply chain.

Meanwhile, in countries with large pepper production, Brazil has passed the harvest season, Vietnam has entered the season, while the main harvest of Indonesia and Malaysia is in July every year.

Information from the Vietnam Pepper and Spice Association (VPSA), speculation is the main reason leading to the "hot" increase in pepper prices. Vietnam's harvest is in its main season, so the phenomenon of hoarding goods pushing up prices will not likely happen in the near future.

However, pepper prices are forecast to remain high. This year, the harvest was early due to the hot weather coming early due to El Nino. Harvest is expected to end at the end of March. The actual output is lower than VPSA's expectation, estimated at only 140-150 thousand tons.

According to VPSA, Vietnam provides about 50% of global pepper output, but due to a sharp decline in area, Vietnam's pepper output in 2024 may be at its lowest level in many years.

According to Nedspice Group, the scale and timing of new export demand in Vietnam will determine the price trend in the coming months, especially China plays an important role.

Nedspice Group forecasts global pepper production to reach about 465,000 tons in 2024, down 6,000 tons compared to the previous year. In addition, global pepper consumption is expected to be at 529,000 tons, 64,000 tons higher than production. This caused inventory to drop to its lowest level in the past 6 years.

Vietnam's harvest this year according to Nedspice is about 157,000 tons, down 15% compared to the previous year. In recent years, there has been very little new pepper planting in Vietnam and many old trees. At the same time, the area of ​​pepper trees is also shrinking and being replaced by crops that bring better income such as durian.

Nedspice believes that rising pepper prices will encourage farmers to increase production, boosting pepper productivity in the coming years. However, new planting will take time to harvest, so output is unlikely to recover soon.

Pepper productivity decreased sharply due to prolonged drought and disease

 

Prolonged drought, along with many diseases, caused pepper productivity in Kien Giang to decrease sharply, and farmers were less happy because the pepper crop failed.

Pepper prices are rising again after a long period of low levels. Currently, traders are buying at the garden for 95,000 VND/kg, an increase of nearly 30,000 VND/kg compared to the end of 2023. Although prices have increased, many households grow them. Pepper in Kien Giang is still not happy because this year's pepper crop failed and the harvest yield was low.

Mr. Thach Nat, a  longtime pepper grower  in Ha Tien City, said: "Each pepper planting post, if the weather is favorable and well cared for, can yield from 800g to 1kg. However, this year the harvest only reached less than 500g/head. The reason is due to prolonged drought and lack of irrigation water, pepper plants do not develop well and bear little fruit."

As the owner of a pepper purchasing and processing facility in a commune on the outskirts of Ha Tien City, Mr. Ngo Hoang Du said: "It is now the harvest season but each day the facility can only purchase a few dozen kilograms of raw pepper. Because this year's pepper crop was poor, farmers harvested low yields. Furthermore, because pepper prices are increasing, there are households who are not in a hurry to sell right away but wait for the price."

Mr. Tran Quang Giau, Director of the Department of Crop Production and Plant Protection of Kien Giang province, said that currently the whole province only has about 384 hectares of pepper growing, scattered in the districts of Giong Rieng, Go Quao, U Minh Thuong, Kien Luong, Kien Hai, Ha Tien City and Phu Quoc.

Recently, because pepper prices are low while input costs are increasing, the more they grow, the more they lose money, so farmers destroy pepper gardens and switch to other crops. In addition, many pepper gardens in Go Quao, Giong Rieng, Phu Quoc are infected with diseases, commonly slow death, quick death, crazy pepper, nematodes with a total area of ​​more than 26 hectares, affecting harvest output.

Will pepper prices still go up in the near future?

 

At the Vietnam Pepper and Spice Industry International Conference - VIPO 2024 held on March 8-10, Mr. Jasvinder Singh, Sethi, CEO and Founder of Namagro Vietnam, said that global consumption demand is about 600,000 – 700,000 tons.

This demand is met through imports and self-cultivation in the country. Asia consumes the most pepper in the world with 400,000 tonnes, of which half is imported, half is self-produced. The Americas consumed 110,000 tons, of which 90,000 were imported from other countries, while Europe imported almost all.

In terms of supply, he cited forecasts from the International Pepper Association (IPC) that said worldwide pepper production will decline by about 2% in 2024.

Not out of the trend, Vietnam's pepper production may decrease to about 170,000 tons, but exports can still reach about 240,000 tons. Brazil's output will fall more sharply due to climate change-related issues.

According to CEO Namagro Vietnam, two important factors to evaluate output are yield and harvested area.

Productivity depends on the weather and the motivation of the farmer himself. If farmers believe that pepper cultivation is profitable, they will take care of it and improve yields. However, low prices in recent years, coupled with expensive input costs, have left farmers with little incentive to persist in their pursuit of pepper.

In Vietnam, since 2017, no new planting areas have appeared, besides there are also situations in some areas, farmers switch to planting other crops.

All of this will cause supply shortages in the future. In addition, El Niño, La Nina phenomena and geopolitical instability exacerbate the situation.

For the pepper market, Jasvinder Singh Sethi also noted that it is not simply assessing supply and demand, but also assessing whether geopolitical conflicts of a region affect the supply and demand of that area and its vicinity.

In terms of prices, by compiling data, he observed that there is a rule that repeats three times in the past 50 years, that every time demand is greater than supply, prices also skyrocket, whereas when supply is greater than demand, prices will fall and remain at the bottom.

Pepper prices are currently stable and may likely increase in the near future. Supply is still not able to meet demand.

"Unlike turmeric or ginger, prices go up every year, farms grow more and the next year prices fall again, pepper needs another 3-4 years to ensure supply due to the shortage of planting area that appeared three years ago. Existing growing areas also face issues related to climate change but long-term demand for pepper remains strong," he said.

Pepper prices in the domestic market are continuing their upward trend in the first months of the year. In just three months (from December 2023), pepper prices have increased by up to 30%. By the end of February, the price of black pepper increased by 10,000 – 11,000 VND/kg compared to the end of January to 91,000 – 94,000 VND/kg. The highest threshold recorded in March was 96,000 VND/kg.

According to some businesses and experts in the pepper industry, in recentyears, pepper prices in many countries such as Brazil and Indonesia are often higher than Vietnam, even at one time Indonesia did not have pepper to export.

In fact, at this time, only Vietnam is harvesting a lot. World prices are higher than domestic, adding to the fear of lack of goods and price increases, so many businesses actively increase the amount of purchases, pushing pepper prices up hot.

According to information from the Vietnam Pepper and Spice Association (VPSA), Vietnam supplies about 50% of global pepper production, but due to a sharp decline in area, Vietnam's pepper production in 2024 is likely to be at the lowest level in many years.  

Vietnam pepper market update 11th March 2024 – Week 10

We would like to send you a quick highlight Vietnam pepper market update 11th March 2024 – Week 10.

Last week, the price of pepper has some downward adjustments as it is currently the main harvesting season, leading to a more abundant supply. The price of pepper has decreased from 96,500 VND to 95,000 VND, a decrease of 1.55%.

 Demand continues to be strong from various markets such as the US, EU, Asia, Africa, especially for immediate and further shipment in 2024.

 The amount of pepper being offered for sale has become very limited as the market adjusts downwards. Farmers and agents continue to prioritize storing goods.

The price of coffee has also approached the price of pepper. Therefore, many farmers have sold coffee and bought pepper to increase their inventory with the expectation that the price of pepper will rise in 2024.

 

 Update the latest domestic and world pepper prices on March 4, 2024

Pepper price  today is 4/3 in the world

In the world, the pepper market on March 4 remained stable in many countries.

Accordingly, the price of Lampung black pepper in Indonesia is anchored at 3,896 USD/ton. The price of Muntok white pepper in this country remains at 6,142 USD/ton.

Malaysia's Kuching ASTA black pepper price remained stable at 4,900 USD/ton; This country's ASTA white pepper is still priced at 7,300 USD/ton.

For the Brazilian market, the price of ASTA 570 black pepper is at 4,270 USD/ton.

In Vietnam, export prices of black pepper grades 500 and 550 g/l remained at 3,900 and 4,000 USD/ton, respectively. The export price of white pepper reached 5,700 USD/ton.

Pepper type	Price (Unit: USD/ton)	Change
Lampung black pepper (Indonesia)	3,896	–
Brazilian black pepper ASTA 570	4,270	–
Kuching black pepper (Malaysia) ASTA	4,900	–
Muntok white pepper	6.142	–
ASTA Malaysian white pepper	7,300	–

Today's world pepper prices  have no new fluctuations. Summing up last week, the global pepper market fluctuated in opposite directions with only India reporting a decrease.

Thus, world pepper prices on March 4, 2024 were flat compared to yesterday.

Pepper price today  is 4/3 in the country

Domestically, the pepper market on March 4 had no new fluctuations compared to yesterday.

Specifically, Dak Lak and Dak Nong traded at 95,500 VND/kg;

In Gia Lai, pepper price today remains at 93,000 VND/kg;

In Dong Nai, traders buy it at a price of 93,500 VND/kg;

The latest pepper price in Ba Ria - Vung Tau still reaches 95,500 VND/kg;

Binh Phuoc traders trade at 95,000 VND/kg.

Province	Price	Up and down
Dak Lak	95,500	–
Dak Nong	95,500	–
Gia Lai	93,000	–
Dong Nai	93,500	–
BA Ria Vung Tau	93,500	–
Binh Phuoc	95,500	–

Latest domestic pepper price list dated March 4, 2024. Unit: VND/kg

 Domestic pepper prices  today  are flat with the highest level reaching 95,500 VND/kg. Summarizing last week, the domestic pepper market increased rapidly from 3,000 - 4,000 VND/kg.

Evaluating this week, experts believe that domestic pepper will still be anchored at a high level, the upward momentum is still there but is no longer strong when new crops are about to hit the market.

Mr. Hoang Phuoc Binh - Vice Chairman of Chu Se Pepper Association (Gia Lai) commented that the general trend this year is that prices will continue to increase and can completely return to the mark of more than 100 thousand VND/kg in the near future. time is not far away.

Global and Vietnamese pepper production is forecast to decrease, along with many farmers not being in a hurry to sell pepper to the market, contributing to scarcity as well as keeping pepper prices high.

Thus, domestic pepper prices on March 4, 2024 are trading around 93,000 - 95,500 VND/kg.

According to Nongnghiep.vn

Pepper Talk// Pepper Market Report by Royal Golden// Week 10 – 2024

 

Week 9 ended firm on Saturday at level 96,000 VND per kg after some reported covering from shippers that had happened at level 95,000 VND. 
Overall, since the beginning of the year, black pepper prices have increased by about 14%. Having about an upsurge of 28% for February this year compared to last year same month period, while about 15% beginning March in comparison to last February beginning. 

Speculations continues as most of the farmers are allegedly a firm believer that pepper price cycle is set to a new record high. Further, with coffee and durian that are keeping them well funded, there seems to no selling pressure happening despite a reported 50% harvested crop already with farmers that are opting to store their pepper, waiting at the right time and price to sell it.  

Today, market remains firm, opening up with some buying demand happening. 
Muntok White Pepper remains stable to firm still being influenced by Vietnam bullish trend in addition to raw material that are very scarce.   

Brazil still few offers available. Local material last seen at level 19 BRL/kg.

In terms of ocean freight scenario, with Red Sea situation that continues to impact the capacity and equipment, carriers are announcing GRI/PSS/contingency charges with pressure for the additional cost involve for the rerouting via Cape of Good Hope. Expectations are that the Peak Season quantum will be mitigated or even softens by March month but that would remain to be seen.