The price of pepper in the second half of May 2020 suddenly accelerated, from approximately 40,000 VND/kg to over 60,000 VND/kg of black pepper bucket, increasing to nearly 60% after only 2 weeks is rare. To contribute to this clarification, Giatieu.com has a series of articles sharing opinions of pepper producers and traders, please refer to the community.
One point to buy black pepper
Part 1: Try to explain the reason for the “hot” increase in pepper prices, through the perspective of a domestic trader.
Recently, the price of pepper in the domestic market of Vietnam has a price step, I think it has surpassed all “All Time” , increased by 60% from 37-38,000 VND/kg to 60-62,000 VND/kg in a few days. Sometimes the price fluctuates up to 10,000 VND/kg in 24 hours. What motivates this to happen? “spectacular” this? Observing developments from the day the World Health Organization (WHO) announced the Covid-19 pandemic to the present, there are a few things that pass through my eyes. Rewrite to share with the community, happy or sad depending on the position.
The first thing to mention is “Confidence goes up” And that belief is spread quickly thanks to social networks.
A simple example for easy visualization: Normally, the Vietnamese pepper market has 5 buyers and 5 sellers. Just now all have bought, no sellers. The exporter estimated that at the end of the month, more than 30,000 tons would be delivered to the port. The domestic price is said to be higher than the foreign price, but because the contract has been signed, foreign goods that have not been imported in time must be imported. “stealth purchase” at the price of the local owner “shout”. Is there a shortage of domestic supply and the price spiked? I insist no!
On April 1, the Government announced social distancing to prevent the epidemic. The domestic price has touched 35,000 VND/kg in an anxious and waiting mood. A large amount of real goods are brought to export warehouses send an advance without closing the price. The market also has more data announced by the General Department of Customs, Vietnam’s pepper exports in April 2020 reached more than 40,000 tons, the highest ever. What does this number say?
The bottom-fishing price of 34-35,000 VND/kg in the raw material areas of Dak Lak, Gia Lai in early April 202 was far below the production cost of Vietnamese farmers, which has stimulated the world to throw money to buy speculatively. And most of all, the low domestic price at this time is also due to the lack of finance of people in the pepper industry, farmers in the Central Highlands in the main harvest season, debts to cover, increased sales demand while information The global spread of the disease caused money flow to be locally blocked and domestic prices continued to weaken further. At that time, only export trading units bought at Binh Duong – SG warehouse with the price of 36,000 VND/kg, any quantity would be satisfied. But previously signed contracts, which were notified of delayed delivery because of the distance, the cash flow also stopped suddenly. However, in the first few days of social distancing, the society’s operation was basically stable.
“Wave” domestic speculative buying began to rekindle. KDXK units also started buying again for the next order. China reopened to normal activities and also joined the market, causing pepper prices to move up slightly. But the sudden spike like just now is Confidence is up and domestic speculators decided not to blame China for the price. For two months in a row, people who have goods in their hands do not want to sell. Speculators who see that the price is going up, have more confidence and buy more strongly, even though the owner of the goods has raised the price in excess.
I would like to add an important factor, which is the role of “boss”. With the correct trend calculation, when the price is about to rise, in the stock of “boss” was full of pepper, the number was not less than 5,000 tons, but mainly thanks to the favorable weather, favorable conditions, and human harmony, it contributed to the sudden increase in prices. Many people see the way “boss” Set prices for the market to follow. Speculative look “boss” but buy along, the price jumps from one speculator to another, at any price, as long as the owner agrees to sell.
Besides, there is another factor that also contributes to the price increase: One “rich man” (please don’t name) sold paper pepper at 37 – 38,000 VND/kg. If you give 30% fresh money, the remaining 70% will be subject to bank interest to be able to buy their goods, even if there are no real goods in the warehouse. When the price spikes, customers see that there is no stock in stock, so they come back “price cut”luxurious “boss” buy it back. “Boss” shouted several thousand also bought, contributing to increase the heat always. Just buy and sell around like that, despite the KDXK units shaking their heads, unable to buy goods to export. But the figures reported by the Customs sector still show steady exports. So, where will that round-the-clock sales end up? Of course, still go back to export trading units by, at the end of the month, when you need goods to export, then “stealth purchase” a big deal at a loss price compared to the signed price. At the peak, the price fluctuated at 61 – 62 – 63,000 VND/kg in the short period of speculative buying. Through May 29, “boss” Turn off the phone, stop buying. The market sold out. All are for sale, there are no buyers, the price rushes to around 50,000 VND/kg…
Chaining the events above, I found that, although the supply is not lacking, even there is still an oversupply, but the scarcity of real goods because of the rising confidence in the price makes speculators buy strongly and dealers do not sell. , has caused export and import units not to have the supply as planned. Some units have to pay contracts with customers “feeling sorry”. This, if prolonged, will invisibly lose the reputation of export trading units with foreign customers. But the capital market was fierce, had to accept.
Who knows, in the second half of next month, this scene will happen again?
The article shows the view of a fairly experienced domestic trader, recorded and shared by giatieu.com with the community. Does not include judgment, evaluation or encouragement of speculation or business.
Best regards !
Giatieu.com
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