Overview
This year, several factors will determine the future of the Black Pepper Market.
- The arrival of the new Black pepper crop in Vietnam and the demand among the international market.
- The freight prices and the container shortage faced by Vietnam and the rest of the world delayed shipments.
There is a tightening of regulations by the EU on Brazil’s Black pepper. As a result, the buyers are looking towards other countries to fulfill the demand.
Brazil is moving towards finding other selling locations for their commodity.
There are speculations that there might be a boost in the trading volume of Vietnam’s Black Pepper during the harvest time due to the delay in the shipment.
Price Trend
- Due to the holiday season, the last quarter was slow. As a result, the price became bearish. But with overall supply being tight, there were sparks of price peaking up in intervals.
- Brazil’s Black Pepper price went down in January due to the EU regulations. It caused the shipments to be stuck in the Brazilian port and the exporters trying to release the crop at a discounted rate.
- In the EU, the buyers are looking for Black Pepper from other sources that are Salmonella compliant.
- The price of Black Pepper is expected to pick up as China is likely to increase its demand post the New Year holidays.
Future
- The global stock is expected to be lower than last year, and so is the overall demand. As a result, the stock is expected to be about 510.000 MT while the demand is estimated to be about 520.000 MT.
- According to experts, the difference of 10.000 MT won’t make much difference in covering the demand.
- Market experts predict that the market will be seeing both bullish and bearish trends for the commodity. The decrease in production in Vietnam, Cambodia, and India will likely drive the market up. Still, it can be balanced or capped by the increased production in Brazil and Indonesia.
- There can be a supply scarcity for the short term since Vietnam has started building up stocks earlier. In addition, the delayed harvest and the arrival of the new crop while the demand from China can lead to a shortage in supply for a while.