The price of pepper in the second half of May 2020 suddenly accelerated, from approximately VND 40,000 / kg to over VND 60,000 / kg of black pepper, increasing to nearly 60% after only 2 weeks. To help clarify this, Giatieu.com has a series of articles sharing the opinions of pepper production and trading circles, please refer to the community.
A point of purchasing black pepper
Part 1: Trying to explain the reason why pepper price increased “hot”, from the perspective of a domestic trader.
Recently, the price of pepper in the domestic market of Vietnam has gradually increased, I think it is exceeded “All Time” , increasing 60% from 37–38,000 VND / kg to 60 – 62,000 VND / kg in a few days. Sometimes the price fluctuates to 10,000 VND / kg in 24 hours. What motivates things to happen? “spectacular” this? Observing the developments from the day the World Health Organization (WHO) announced the Covid-19 pandemic to date, there are some things that have passed through my eyes. Rewrite to share with the community, happy or sad depending on the position.
The first thing to mention is “Belief in rising prices” and that belief spread quickly thanks to social media.
Simple example to make it easy to imagine things: Normally, Vietnam pepper market has 5 buyers, 5 sellers. Just now all bought, no sellers. Exporters estimated at the end of the month to have more than 30,000 tons delivered to the port. Domestic prices are higher than foreign prices, but because the contract was signed, foreign goods have not been imported in time, it is mandatory “Sneak shopping” at the prices of people with domestic goods “shout”. Is the domestic supply lacking and the price spike? I assert is not!
On April 1, the Government announced a social extension to prevent epidemics. Domestic prices have touched 35,000 VND / kg in a state of anxiety, waiting. Large quantities of real goods are brought to export warehouses Send money without closing the price. The market also has more data published by the General Department of Customs, Vietnam's pepper export in April 2020 reached more than 40,000 tons, the most ever. What does this number say?
The bottom price of 34 – 35,000 VND / kg in raw material areas of Dak Lak, Gia Lai in the beginning of April 2/20 below the production cost of Vietnamese farmers was quite far, stimulating the world to buy speculative money. And above all, the low domestic prices at this time are due to the shortage of finance in pepper industry, Central Highlands farmers in the main crop, debt to cover, high demand for sales while information. the global spread of epidemics has caused local money flows to be blocked and domestic prices to continue to weaken further. At that time, only KDKK units bought in Binh Duong – SG warehouse with the price of 36,000 VND / kg, any quantity was met. But contracts signed earlier, announced delayed delivery due to distance, cash flow also stopped abruptly. However, the first few days of separation, society operates basically stable.
“Wave” Domestic speculative buying began to ignite. The KDKK units also started to return to buy for the next order. China reopened to normal activities and also joined the market, causing prices of pepper to move up slightly. But the spike as was Faith prices up and the local speculators decided, do not blame China as a price. Consecutive two consecutive months, people holding goods in their hands do not want to sell. The speculators see that the higher the price, the more confidence there is and the more money they buy, regardless of who has the excess price.
I would like to add one more important factor, which is the role of “boss”. With the correct trend calculation, when prices move, they are in stock “boss” Filled with pepper, the figure is not less than 5,000 tons, but mainly thanks to the natural weather, favorable conditions and harmonization, contributing to the sudden increase in prices. Many people look the way “boss” price to market to follow. Speculation look “boss” that buy, the price jump from speculation to speculative hands to the other, the price is also bought, as long as people agree to sell.
Besides, there are additional factors that also contribute to price increases: One “rich man” (please do not name) sold paper pepper at the price of 37 – 38,000 VND / kg. Just give 30% of fresh money, the remaining 70% bear the interest of the bank to buy their goods, even though there is no real stock in the warehouse. When the price spikes, customers find that there is no stock in the warehouse, so they come back “Cut prices”to “boss” bought it like that. “Boss” A few thousands of screams also bought, contributing to the hot increase. Just trading around like that, despite the clunky KDXK units shook their heads, could not buy goods for export. But Customs' reporting numbers still show steady exports. So, where does the last round of sales and purchases end up going? Of course, still with the KDXK unit by, at the end of the month need export goods “Sneak shopping” One of the two big relationships with the price is higher than the signed price. Peak, the price has fluctuated at 61 – 62 – 63,000 VND / kg in the area of speculative buying off. Through May 29, “boss” Turn off the phone, stop buying. Market tumbled to sell. All are sold, there are no buyers, the price rushed to about 50,000 VND / kg …
In the sequence of events above, I realize that although the supply is not lacking or even is oversupply, the real scarcity of goods because of the rising price belief makes speculators buy strongly and agents sell goods. , has caused the KDXK units do not have supplies as planned. Some units have to pay a contract with the guests “feeling sorry”. This if prolonged, the invisible intangible will discredit the business units of export business with foreign visitors. But the capital market is fierce, so must accept.
Who knows, by the second half of next month, this scene will happen again?
The article shows the perspective of a fairly experienced local trader, recorded by giatieu.com and shared with the community. Does not imply judgment, evaluation or encouragement of speculation or trading.
Best regards !
Giatieu.com
