Many traders said that pepper prices are increasing at a fast rate, but collecting goods has become more difficult because pepper growers do not want to sell.
The global and domestic pepper market in the past week both fluctuated strongly due to worries about supply, especially after our country’s agricultural industry is expected to reduce pepper exports in 2012 by about 30% in volume.
The main reason is that the autumn crop in 2012 will decrease seriously due to adverse weather, although last year the pepper growing area of the whole country increased faster than planned thanks to high prices. The number of outputs estimated to be reduced by 30-40% due to a survey by the Vietnam Pepper Association in key pepper growing areas at the end of 2011 has made exporters really worried.
In the past week, although it has just been listed on the SMX exchange (Singapore), the price of black pepper in just one week has increased by 250 USD, or 4.15%, to 6,301 USD/ton for March term and increased to 354 USD, or 5.57%, to 6,354 USD/ton for April term, a very strong increase. (see chart)
Pepper price on SMX in the first trading week -USD/ton (source: CafeF)
The price of black pepper in a bucket in Ba Ria – Vung Tau market in the past week also increased by 5,000 VND, or 4.1 %, to 127,000 VND/kg. Other domestic markets also had a very hot increase, such as Dak Lak-Dak Nong increased by 7,000 VND, to 122,000 VND/kg, Gia Lai increased by 8,000 VND, to 124,000 VND/kg.
Many traders said that the increase in the price of pepper at the beginning of the season compared to the previous year is very strong, but it is also more difficult to collect goods now because pepper growers do not want to sell. This is understandable because last year’s pepper price peaked at approximately VND 160,000/kg, making growers who sell early still regret it.
On the NCDEX floor in Kochi-India, in the past week, the price of pepper for March futures increased by a total of Rs 1,265, or 4.24%, to Rs 31,080/quintal, equivalent to USD 6,310/ton. April futures also increased by Rs 1,370, or 4.55 percent, to Rs 31,465 per quintal, equivalent to $6,388 per ton, a stronger increase. Particularly, the spot price of pepper only increased by Rs 842, or 2.73%, to Rs 31,664 / quintal, equivalent to USD 6,429 / ton.
Export prices of pepper from all countries also increased. Indian pepper special grade MG1 goes to Europe for 6,700 USD/ton and goes to the US for 7,000 USD/ton (C&F), an increase of 250 USD. Brazilian pepper grade B1 was offered to buy at $6,700/ton and grade B2 was $100/ton lower, up $350. Vietnamese black pepper grade 500 Gr/l-FAQ is offered at $6,300/ton and grade 550 Gr/l-FAQ is offered at $6,600/ton, (FOB), an increase of $300-350.
It is known that international shipping lines have announced to increase freight rates since the beginning of this March, in order to restore freight rates that have fallen deeply since 2008. The increase in sea freight rates will make exporters Vietnam is facing difficulties because for a long time, the transportation of import and export goods of Vietnam has mainly relied on foreign shipping lines.
It is expected that in the near future, domestic pepper prices will remain high.
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