Market shakes at important price levels
The pepper market started November with good signals when the price returned to the level of 90,000 VND/kg. However, this price was only maintained for the first two days of the month, then quickly adjusted to the price of 88,000 VND/kg.
It seems that this is not the first time that the pepper market “shakes” when it reaches a certain round price. Previously, when pepper prices reached price thresholds such as 60,000, 70,000 and 80,000 VND/kg, there were also corrections lasting for many consecutive days and then rebounding to surpass these thresholds.
Explaining the above phenomenon, Mr. Hoang Phuoc Binh, Vice Chairman of Chu Se Pepper Association (Gia Lai) said that these are important price thresholds, which greatly affect the psychology of people who have goods, especially at this time. current limited supply.
“Agents, speculators or even people with goods often sell more at the round price threshold for different purposes. For dealers and speculators, this is the time to take profits. People are psychologically waiting for a good price to sell to cover debts and fertilizer money…”, Mr. Binh said.
The psychology of speculators is probably the most affected because their strategy is to buy and sell short-term. When the price is good, they will immediately sell to take profit, unlike dealers who buy and hoard scattered throughout the year.
Mr. Vo Duy Tuong, Director of Bach Sinh Co., Ltd., in Gia Nghia town (Dak Nong) said that in an uptrend, there will be a large number of short-term speculators and surfers. In addition, the market also has “sharks” with strong financial potential and long-range buying strategy, which means that they have bought together a long time ago. When they buy the expected amount of goods, they are considered “forgotten”.
In which, the number of individuals and agents speculating in surfing is not small. This group is always nervously watching the price, waiting for the signal of the market to go up.
“Those who are “sharpen” or do not want to “stop their hearts” are worried about taking profits before the “sharks” discharge. Those who are more “resilient” should just let it be reduced, sell cheaper than the market, exit the goods depending on their financial status. main,” said Mr. Tuong.
However, this speculative activity is considered a “black – red” game, affecting the purchasing activities of exporters. Because, there are many times when businesses need goods to sell but cannot buy because of speculation.
This also happened at the beginning of this year when pepper prices continued to skyrocket, but the goods were only in the domestic market, businesses could not buy for export.
But when the price showed signs of decreasing, the goods were continuously sold off. A representative of a leading pepper exporter in Vietnam said that at that time, his company even had to mobilize human resources and work overtime on weekends to purchase goods.
Pepper price can conquer the mark of 100,000 VND/kg?
The fact that the pepper price fluctuated at the mark of 90,000 VND/kg made many people skeptical about the ability to conquer the 100,000 VND/kg mark as expected before.
According to Mr. Binh, there are two scenarios happening from now to the end of the year. In the first scenario, if Chinese traders limit buying to prepare for the holidays, pepper prices will still increase but not too strongly, up to 100,000 VND/kg.
In the opposite scenario, if China increases orders, the price of pepper will even surpass the important milestone of 100,000 VND/kg. This person said, currently the amount of goods that Chinese traders buy is only 3/4 compared to every year.
Meanwhile, Mr. Tuong is quite pessimistic about the possibility that pepper prices can reach 100,000 VND/kg because the market is gradually weakening. Whenever there is a selling volume, there is generally only a small amount of profit taking by speculation.
“Observing the market, some speculations “borrowed money” have also been dropped. Those who are interested in domestic pepper can now see the most obvious “stuffing up and down” at 90,000 VND/ kg – an important milestone to conquer the threshold of 100,000 VND/kg. Therefore, don’t dream of 100,000 VND/kg but think about 90,000 VND/kg first,” said Mr. Tuong.
Before that, in the last 10 days of October, pepper price also reached 90,000 but then fell again and continued to try to break this price zone for the second time in early November but failed.
Recently, the scarce supply has pushed pepper prices in the domestic market to a high level. The amount of goods sold is very small, partly because the supply in the people is almost exhausted. According to estimates by the Vietnam Pepper Association (VPA), the country’s pepper output in 2021 may decrease by up to 25% to 180,000 tons.
Social distancing measures are eased to help goods circulate well, export activities take place normally.
In the third quarter of 2021, prices of black pepper and white pepper fluctuated in a narrow range and remained at a high level. The uptrend in prices took place throughout October 2021 thanks to a strong increase in import demand from China.
In the last week of October 2021, the price of black pepper in the domestic market was at VND 88,500/kg, an increase of VND 8,500/kg compared to the end of September 2021. There was even a time when the pepper price reached 90,000 VND/kg. From the beginning of the year to the end of October, the price of black pepper increased by 70%.
Not only domestic pepper price but also export pepper price also increased by 71%, reaching more than 3,400 USD/ton in the first 10 months of the year, helping to “save” the export activities of this item. Although the export volume of pepper in the first 10 months of the year decreased by 5.7%, the turnover still reached 44%, according to the data of the Ministry of Agriculture and Rural Development.
According to Mr. Nguyen Nam Hai, Chairman of the Vietnam Pepper Association, now customers are even slow to buy at up to 4,200 USD/ton, twice as high as at the beginning of the year because of the scarce supply and the sharp increase in freight charges. . Therefore, in the domestic pepper market, pepper prices can also reach 100,000 VND/kg