From May 15th till May 27th 2020, the price of black pepper increased $750/MT. And increasing trend is continuing. The Chinese people bought 26,266 tons black pepper in first 4 months. This is the largest market of Vietnamese Pepper. Hence, the Chinese business man is pushing up the prices. Some big traders in Vietnam are keeping stock to push the prices up.
They are expecting prices of black pepper will increase to at least $5000/MT. That price level was in 2017, 3 years ago.
(Vietnam Black Pepper Whole 500gl FAQ)
Although the total production of black pepper in Vietnam is predicted more than 280,000 tons in 2020 (10% higher than 2019), the traders are trying to push up the prices.
In crop 2020, there are a lot of farmers who already were bankcrupted because of black pepper. They invested in this black-gold-spices since 2015. At that time, the price was $11,000 per ton for Black Pepper 500gl FAQ. And the planting square increased 300% within 5 years. What they planted 5 years ago, now is being harvested.
Ms. Lieu, a pepper farmer with 15 years experience said “The costing of Vietnam black pepper price is 60,000 VND per kg. At the moment, only farmers who have pepper farm with 10 years old can survive in market. Because the labor cost, fertilizer cost, product cost are higher than market price at least 20%.”
Hence, when the Chinese people is pushing up Vietnam black pepper price in last weeks of May, the farmers, traders are happy. They all keep closing the warehouse, not selling pepper out to market.
These are the reasons of this dramatically going up price for past 2 weeks.
(Vietnam Black Pepper in 50kgs PP bags)
Most of big importers expect the price will calm down in coming weeks. As the total quantity of black pepper in Vietnam is still more than last year. Moreover, there are still 75,000 tons of old stock last crops in Vietnam. Hence, if the big importers will not buy at new levels, black pepper prices will come down.
For the first 4 months of 2020, Vietnam exported 116,764 tons black pepper . Total value is 248.7 million US Dollar. The quantity increased 7.8% but total value reduced 12.1% in compare with 2019.
(Black Pepper Ground mesh 28-32 ETO sterilized)
Asian markets bought 64,868 tons. This is the largest market area of Vietnam black pepper. The Asisan importers bought 55.2% total production. And the Chinese bought 26,266 tons, reduced 2635 tons in compared with 2019. However, Myanmar, Nepal market imported quantity increased 100-300%. Myanmar bought 4117 tons (increased 3346 tons). And Nepal bought 3826 tons (increased 1500 tons). The black pepper is trucked from Myanmar and Nepal to India through border gates.
USA imported 19,759 tons (increased 2144 tons). The American bought 16.8% of total Vietnamese black pepper production. And they are the second largest market. And in EU countries, total import is 20,438 tons, equal 17.4% total. In which Germany imported 4137 tons (increased 562 tons).
There are only 5 main markets where import Vietnam White Pepper. They are: Germany (2064 tons), USA (1923 tons), Netherlands (1197 tons), Thailand (762 tons), Saudi Arabia (411 tons).
Updated post on June 3rd 2020, the prices of black pepper have been coming down everyday. Today the price of raw Black Pepper 500gl FAQ is between $2400 – $2500/MT. It means $400/MT was flew after only 4 days. The question is: who makes benefit in this fluctuating prices?