Pepper Market Review Week 15 2019admin
Black and white pepper prices in Vietnam continue to remain very stable despite Chinese absence since last 2 weeks which gave the opportunity for local exporters to operate peacefully to cover their needs for April Shipments. We have confirmed reports of some delays and extension of March shipment from certain shippers who are oversold almost 5 times their installed capacity to stay up on the ladder. Since Quality is of Less importance to most of the buyers and price matters most these delays will be condoned for sure.
Our team was visiting the central highlands of Gia Lai, Daklak and Daknong provinces which produce more than 60% of Vietnam Pepper. The harvest is completely over and the farmers we visited some have sold as high as 70% of the crop to repay the loans taken from Banks and local financiers .Farmers in certain communes have sold only 40 to 50 % of their crop as they have other incomes to sustain them and are prepared to store for higher price realization.
Another interesting thing was farmers were entrusting their pepper with local collectors whom they trust with prices unfixed with the option of fixing price at any time they feel either in parts or full
The most alarming factor in our trip was outbreak of quick wilt disease in Gia Lai especially in the northern part with several thousand hectares completely destroyed and farmers have put up boards for sale their plantations and houses and many have fled to other cities for jobs to make both ends meet and escape from Banks and local money lenders. It’s really pathetic to see the plight of farmers and we honestly feel to make farmers sustainable first before asking them to engage in sustainable profound of pepper.Gia Lai province which produced 50,000 Mt in 2018 the output estimated for 2019 is only 30-32000 Mt according to major collectors operating in Gia Lai .Water shortage is already experienced in North Gia Lai and they are worried with rains beginning in May the disease is likely to spread faster resulting in destruction of more plantations and a much lower yield in 2020 .
Daklak province in the central highlands is currently well placed and disease attack is very minimal and pepper vines look healthy and green even at peak summer time and the yield from new plantations cane in good resulting in a bumper crop of 65000 Mt in 2019.if all goes well 2020 crop can reach 70- 75000 Mt according to the farming community
Daknong the new province with a good percentage of vines competitively very new 3-4 years are also falling in the clutches of quick wilt disease .Since most of the plantations are on hilly terrain there is every chance of disease spreading much faster according to agriculture experts.The out put achieved in 2019 was close to 50,000 Mt this year is likely to fall 20% if the disease is not contained
Although our estimates prior to harvest was 235000 Mt for 2019 we are down sizing it to 220.000 Mt and the carry over we estimated earlier was 20.000 Mt we are increasing it to 30.000 Mt after the current survey and imports we are keeping it at the same figure of 30,000 Mt and Vietnam will end up shipping 235.000 Mt in 2019 also is our forecast
Brazil was quite for most part of the week with indications for B1 June shipment USD 2300 FOB and new Crop 2150 Sept/October
Indonesia hard to find any sellers below USD 2650 Fob and India still continue to remain the most expensive origin with MG 1 prices FOB Cochin USD 5050/5100 FOB Cochin