On March 28, the price of black pepper in Ba Ria – Vung Tau increased to 56,000 VND/kg, an increase of 2,000 VND/kg compared to a week earlier, while the price of black pepper in Dak Lak – Dak Nong also increased. ranges from 54,000 to 55,000 VND/kg. It is expected that the uptrend may temporarily slow down in the weekends.
Comparison chart of Brazil’s monthly pepper exports for the past 3 years (Source: IPC).
The application of a minimum import price (MIP) by the Indian Ministry of Commerce for pepper imported from countries outside the South Asia Free Trade Agreement (SAFTA) has was opposed by most of the Indian Spice Traders and economists.
They believe that this will make India’s pepper price uncompetitive globally because pepper importing countries will seek to source goods from cheaper producing countries such as Vietnam, Indonesia… and most recently. is Brazil, the pepper producer in South America is increasing its export volume by 91%, from 31,100 tons exported in 2016 to 59,500 tons exported in 2017, with the price offered to be the lowest in the market. world pepper market today. (See chart)
It is known that Brazil has applied to withdraw from the International Pepper Organization (IPC) and they themselves do not join any alliance to keep prices stable. Their advantage is that the production land is vast and very fertile, so the investment cost for pepper is extremely low. Vietnam, India and some pepper growing countries cannot be compared with them. According to a famous spice trader in the world, they will be a direct competitor to Vietnamese pepper in the near future.
Indian spice traders also said that customers buying pepper in the world often put pepper in the spice basket. The loss of competitiveness of Indian pepper not only makes them lose but also double losses, so the application of MIP is “advantages and disadvantages”. Customers who do not buy pepper also mean that they will not buy other spices. However, this is still a controversial issue.
On Tuesday, March 27, pepper prices on NCDEX – Kochi increased for the third consecutive session. Futures for delivery in April increased by Rs 345 to Rs 40,545 per quintal and for May delivery also increased Rs 345 to Rs 40,770 per quintal (equivalent to $6,257/ton and $6,292/ton).
Meanwhile, the spot price of pepper also increased by Rs 200 to Rs 38,500/quintal (US$5,942/ton) for bucket pepper and Rs 40,500/quintal ($6,250/ton) for selected pepper, an increase of 115 USD/ton compared to last week.
In the domestic market, the price of pepper in buckets in the past week has increased by 2,000 VND/kg due to the impact of world pepper prices. Notably, although farmers are in full harvest, the amount of home-grown goods sold to cover costs has also dropped sharply when it is said that the price has bottomed on Wednesday, March 21.
However, the pressure of the supply of new pepper crop is still there. If farmers simultaneously sell strongly, it is inevitable that pepper prices will fall again. It is expected that if the price turns down, then this time the price will drop to a deeper level.
*According to a report by Vietnam’s Agriculture and Rural Development sector, the export volume of pepper in March 2018 is estimated at 24 thousand tons, with a value of $ 88 million, bringing the export volume of pepper in the first 3 months of 2018 to an estimated 54 thousand tons and 203 million USD, up 5.5% in volume but down 37.3% in value over the same period in 2017. The average export price of pepper in the first 2 months of 2018 reached 3,822 USD/ton, down 44.7% compared to the same period in 2017.
*Exchange rate: 1 USD = 64.7975 Rupees.
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