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Home / Market / Global Pepper Prices and Market Report In May 2022

Global Pepper Prices and Market Report In May 2022

Analysts estimate that from the beginning of 2022 until the present, the global demand for pepper decreased by 40,000–50,000 tons due to the prolonged crisis in Ukraine, China’s Zero COVID policy, and rising inflation. Meanwhile, many countries have reached peak harvest, while China’s sluggish demand has put downward pressure on the pepper prices.

1. Production

Currently, the crop in Vietnam, India, and Cambodia have ended, but Malaysia, Brazil, and Indonesia are still harvesting. The pepper harvest in India, which is just completed, is likely to total over 55,000 tons, up from 40,000 to 45,000 tons the previous year. Pepper dealers and producers are currently choosing to keep their commodities since the market price is dropping.

This year’s output is also expected to be relatively positive in Brazil. Last year, the area of black pepper in the state of Espirito Santo, Brazil’s largest pepper-growing state, climbed by 5% to 821 hectares, driving the state’s black pepper production up by 6.6% to 72,071 tons. Meanwhile, in Indonesia, pepper harvest has begun in Bangka, Belitung… and is planned to begin in all other places by the end of June. As a result, the number of customers is projected to rise in the coming time.

According to IPC, total global production in 2022 is expected to be 535 thousand tons, a 2.6% decline from 2021, with Vietnam and Indonesia accounting for the majority of the decrease

According to IPC, total global production in 2022 is expected to be 535 thousand tons, a 2.6% decline from 2021, with Vietnam and Indonesia accounting for the majority of the decrease.

2. Pepper exports and imports

Pepper exports and imports

Pepper Exports

Pepper exports from major markets all fell dramatically in the first 5 months of this year. Vietnam’s pepper exports fell by 17.8%, while Brazil’s fell by 20.9%. Furthermore, after 4 months, Indonesia’s exports fell by 22.2%.

Pepper exports of some countries in 2022

The market is experiencing several challenges as a result of a lack of purchasing power from China, one of the world’s top importers. 

Brazil: According to data from the Brazilian State Center for Foreign Trade Statistics (Comex Stat), Brazil’s pepper exports in May reached 4,767 tons, a 36 % decrease from the previous month and a 44% decrease from the same period last year. In the first five months of the year, Brazil’s pepper exports declined by 20.9%, totaling 32,425 tons. Exports to the UAE, Germany, the United States, and Pakistan… all decreased sharply.

However, Vietnam, the world’s greatest pepper exporter, has become Brazil’s largest customer, with a volume of 6,281 tons after 5 months, a % rise over the same time last year and the highest level ever.

Cambodia: According to the Ministry of Agriculture, Forestry and Fisheries (MAFF) – Cambodia, the nation exported 5,559 tons of pepper in the first five months of the year, a 25.5 % decrease from the same period last year. 

Vietnam is the largest consumption market, accounting for 92.3% of the total, with 5,131 tons, followed by Germany (356 tons), Taiwan (21 tons), Malaysia (14 tons), France (10, 5 tons), and the Czech Republic (7.9 tons).

Pepper Imports

United States: Pepper imports in the United States increased in the first months of this year, although the country’s inflation reaches a 40-year high and retail sales fall because consumers have reduced spending

According to data from United States International Trade Commission (USITC), In the first four months of the year, the United States imported a total of 28,671 tons of pepper worth almost 142.3 million US dollars, an increase of 5.5% in volume and 61% in value over the same period last year. This demonstrates that consumer demand for this spice in the United States has not decreased as a result of rising inflation.

European Union: In the first months of this year, European pepper imports are also on the rise. According to Eurostat statistics, the amount of pepper imported by the European Union (EU) climbed by 7% in the first quarter of 2022, reaching 24,981 tons.

market share of vietnamese pepper

China: China’s pepper imports climbed by 89.2% over the previous month and by 6.1% over the same period last year, totaling 1,556 tons. In April, the amount of pepper imported from Indonesia increased by 301.7% to 1,125 tons.

However, in the first 4 months of the year, China’s pepper imports fell by 47.7 % in volume and 28.5 % in value, reaching just 3,008 tons, equivalent to 14.3 million USD. The disease outbreak in China has had a substantial impact on the country’s pepper consumption demand

India: As of early June, the domestic price of pepper in this South Asian country has declined 5% in the past three weeks, to 490 – 495 Rs/kg for ungraded pepper at the Kochi wholesale market, according to The Hindu Business Line.

There are also reports of Sri Lankan pepper being available on the market, however, the price has reduced from 5,800 USD/MT to 5,600 USD/MT. Prices are predicted to fall further when the neighboring country’s crop comes to an end.

3. Pepper Prices Movement

Many countries have reached peak harvest, while China’s sluggish demand has put downward pressure on the pepper market. In May, the average price of black pepper in exporting countries dropped by 3 – 5.5% compared to the previous month.

This trend continued until the first half of June, with a 5-10% decrease. In particular, the price of black pepper in Brazil dropped to only 3,450 USD/ton, a 10.4% decrease from the previous month and the lowest level in more than a year. Similarly, black pepper prices in Indonesia fell 7.8 % to 3,648 USD/MT while the price of black pepper in India fell by 2.4% to 6,463 USD/MT.

When compared to the end of last year, the export price of black pepper 500g/l and 550g/l at the port of Ho Chi Minh City, Vietnam, reduced by 4.8 – 6.3% (respectively 200 USD/MT and 250 USD/MT) to 3700 USD/ton and 3950 USD/ton on June 15.

Average price of black pepper from the beginning of 2021 to the first half of June 2022

On the white pepper market, as of June 15, Vietnamese white pepper price has dropped by 3% (equal to 200 USD/ton) compared to the end of last month, to 5,750 USD/ton. The price of white pepper in Indonesia also dropped by 175 USD/MT, fluctuating at 6,313 USD/MT. Previously, white pepper prices in Vietnam and Indonesia fell by 1.5-2.2 % in May.

The Import-Export Department predicts that once a few Chinese regions have started to end lockdown the global pepper market would flourish once again

4. Forecast of Pepper Prices and Market

The Import-Export Department (Ministry of Industry and Trade) predicts that once a few Chinese regions have started to end lockdown the global pepper market would flourish once again. However, geopolitical instability in Eastern Europe continues to put pressure on the price of pepper globally, driving up energy costs and inflation.

The initial signs for the crop year in Vietnam in 2023 are positive. That is, the wet season arrived at the ideal moment, and this year’s pollination of the trees was superior to the previous year’s. However, it is still too early to assess production and evaluate the harvest for the next year. 

Along with a significant price increase in the 2021 crop that has attracted more speculators, global pepper production is predicted to be lower this year than it was last year. When pepper prices remain stable and interest rates increase, some speculators experience cash flow issues, particularly those who borrow money to speculate, this might result in a sell-off that drives the market down. 

You may get more information about the pepper market situation by visiting https://sybilagri.com/market/

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