MUMBAI – In 2016, the market prices were ranging between USD 9.000 – USD 10.000 /mt. Since then, the cyclical downtrend started, and it went right down to USD 2.000 /mt FOB levels in 2020. In 2020, it was the bottom price, and it gradually moved upwards by 20-25% each year. In spite, the last year 2020 being worst hit by the pandemic that everyone faced globally, which we all never faced in our lifetime in this century shutting down the whole world. Along with the other logistical issues, the market prices increased since May 2020 from USD 2.000 /mt went up to USD 2.700 /mt levels FOB by the end of 2020.
At the beginning of 2021, before the commencement of Vietnam new crop in February, traders did not expect in the season itself the market to reach USD 4.000 levels in the first half of March itself. Of course, the prices subsequently did correct by 25% in April to around 3.300 /mt FOB levels, which allowed buyers to enter the market once again who missed out on the first leg increase.
Today the prices we see are at the same levels, marked at USD 4.000 FOB from Vietnam & Brazil origins. Traders do not see the prices coming down from here, but they see it rising as Vietnam has already shipped nearly 60% of their quantity in the FH of the year & Brazil almost 2/3rd of its quantity. Therefore, they recommend buyers to cover over positions for the second half of this year at these levels. The demand is also weak, giving a good opportunity to enter the market and cover the quantities. The prevailing target price for the second half of the year is supposed to remain around USD 4.500 – USD 4.800 FOB by the end of 2021.
Black pepper crop – Forecast (estimated)
|Section||Quantity in mt|
|Carryover (stock last few years 2019 – 2020)||50.000|
|Total Import 2021||30.000|
|Exported in first 6 months in 2021||155.000|
|Lost weight & transit loss||10.000|
|China / USA / UAE / INDIA need cover for next 6 months||55.000|
|Other markets need to cover from July to Dec 2021||65.000|
|Average carry forward every year||40.000|
|Average quantity expected to be exported per month from Vietnam||14.000|
|Average export from Vietnam next 6 months (as per past few years average)||22.000|
|Shortfall in quantity (Buyers will need to cover from other Origins)||8.000|
Source: M.A.M. Trading Corporation