Weekly update (week 45/2016)
Vietnam exporters with shorts for Nov shipments re-entered the market to cover their previous sales. They were more or less forced to do so as they are seeing fresh demand from China & The Middle East. As a result, the market moved up with some USD 400 per Mt from last week levels. The exports for Oct were close to 13.000 Mt. Total exports from Vietnam for Jan through Oct stands at an impressive 165.000 Mt with still two months to go.
There are heavy rains in the growing belts (especially Gia Lai and Dak Lak) and we hear reports about a possible damage to the pepper vines. Flooding and excess rains can also lead to pests like root decay & others.
It’s hard to predict the price trend for Vietnamese pepper for the coming two – three months. Shippers complain about thin stocks and very limited supply. There are so many different shippers active in Vietnam (over 70) with all kind of various grades and destinations. Some of them have taken very aggressive short positons and they might be caught up in a supply squeeze when these positons need to be covered.
Indonesian exporters are closely watching their Vietnam peers. Lampung black pepper ASTA is available at prices which are in in line with Vietnam. Chinese buyers picked up Muntok pepper this week and the pressure to sell seems a little reduced.
Brazil prices dropped quite significantly this week. Belem farmers / holders did not seem to be aware of developments in Vietnam (yet). New crop Brazil pepper from Espirito Santo will come to the market end of Dec - early Jan and this caused some selling interest from the Para state. This is beneficial for the European buyers who are in need of pesticide compliant pepper. We are not sure if there are any serious volumes behind the current selling wave. If you need pepper for the coming few months we would recommend you to pick some up as Brazil prices are attractive.
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