On March 28, Black pepper prices buckets in Ba Ria – Vung Tau increased to VND 56,000 / kg, an increase of VND 2,000 / kg compared to a week earlier, while Black pepper prices buckets in Dak Lak – Dak Nong also fluctuate in the range of 54,000 – 55,000 VND / kg. The increase is expected to temporarily slow down in the weekends.
Comparison chart of monthly pepper export of Brazil for the past 3 years (Source: IPC).
The fact that the Ministry of Commerce of India has applied the minimum import price (MIP) for pepper imported from countries outside the South Asia Free Trade Agreement (SAFTA) met with the opposition of most Indian Spices Businessmen and economic experts.
They think this will cause pepper prices India will lose its competitiveness globally because pepper importing countries will look for goods from cheaper producing countries such as Vietnam, Indonesia … and most recently Brazil, a 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 lowest price offered in the world pepper market today. (See chart)
It is known that Brazil has withdrawn from the International Pepper Organization (IPC) and they themselves do not join any coalition to keep prices stable. Their advantage is that the 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 to them. According to a well-known Spices Business in the world, they are the direct competitors with Vietnamese pepper in the near future.
Indian spice traders also believe that consumers of pepper in the world often put pepper in the spice basket. The loss of competition from Indian pepper not only made them more vulnerable but also caused the loss of MIP “Harmful and harmful benefits”. Customers do not buy pepper also means they will not buy other spices anymore. However, this is a matter that is still controversial.
On Tuesday March 27, pepper prices On NCDEX – Kochi increased for the third session in a row. April delivery futures increased by Rs 345 to Rs 40,545 a quintal and May delivery also increased to Rs 345 to Rs 40,770 a quintal (equivalent to $ 6,257 / ton and $ 6,292 / ton).
While, pepper prices Spot also increased by Rs 200 to Rs 38,500 / quintal (approximately US $ 5,942 / ton) for the bucket type and Rs 40,500 / quintal (equivalent to US $ 6,250 / ton) for the selected type, an increase of US $ 115 / ton compared to the week. before.
In the domestic market, pepper prices bucket over the past week has increased by 2,000 VND / kg due to the impact of pepper prices world. It is worth noting that although farmers are in full harvest, the amount of garden houses sold to cover costs has also plummeted as it is said that prices have bottomed out on Wednesday, March 21.
However, the pressure of new pepper supply remains. If the farmers simultaneously sold strongly, it was inevitable pepper prices will fall back. It is expected that if the price turns down, it is afraid that this time the price will go down to a deeper level.
* According to a report of Vietnam's Agriculture and Rural Development sector, the export volume of pepper in March 2018 was estimated at 24 thousand tons, with a value of US $ 88 million, bringing the export volume of pepper in the first 3 months of 2018 to an estimate of 54 thousand tons and US $ 203 million, up 5.5% in volume but down 37.3% in value over the same period in 2017. Average export price of pepper in the first 2 months of 2018 reached US $ 3,822 / ton, down 44.7% compared to the same period in 2017.
* Exchange rate: 1 USD = 64.7975 Rupees.
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Source Young knowledge / CafeF
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