At the beginning of 2022, the price of hot pepper vvarieties has risen again, and the market attention has once again increased. Due to the tight supply in the market, the price of black pepper in Vietnam rose to 24.8 yuan/kg, and the prices of white pepper in Vietnam and Indonesia rose to 38 yuan/kg respectively. What are the factors that cause the pepper market to continue to climb?
From the international market view
Black pepper ushered in a bottoming out market. Since 2019, the market of pepper in Vietnam, Brazil, and Indonesia, the main producing countries, has continued to decline. In the first quarter of 2020, the market has ushered in a trough, and then bottomed out and rebounded, and the overall market began to climb.
During the market downturn from 2019 to 2020, Vietnam’s 5 taels of pepper fell from $2,200/ton to $1,875/ton, a decline of 14.77%; Vietnam’s 5 taels of black pepper fell from $2,265/ton to $1,975/ton, a drop of 12.80% ; Brazilian black pepper fell from US$2,500/ton to US$2,000/ton, a decline of 20.00%; Indonesian black pepper fell from US$2,016/ton to US$1,758/ton, a decline of 12.80%, and the overall average decline was 17.86%.
During the rising market from 2020 to 2022, Vietnamese 5 taels of pepper rose from $1,875/ton to $4,050/ton, an increase of 116.00%; Vietnamese 5 taels of black pepper rose from $1,975/ton to $4,250/ton, an increase of 115.19% ; Brazilian black pepper rose from $2,000/ton to $3,950/ton, an increase of 97.50%; Indonesian black pepper rose from $1,758/ton to $4,217/ton, an increase of 139.87%, and the overall average increase reached 112.85%.
From the perspective of production capacity
Vietnam's pepper production capacity will decrease in 2021, and the total export volume will be 261,000 tons, a decrease of 8.51% compared with 2020.
The world's pepper exporters are Vietnam, Brazil, India, Malaysia and Indonesia, of which Vietnam's market share ranks first in the world. Affected by the global new crown epidemic in 2020, the global market share of Vietnamese black pepper has dropped from about 80% to 65%-70%. At the same time, the production capacity of other countries has also shown a clear downward trend.
In 2021, the global pepper crop harvest is 15%-35% lower than in 2019, although the food and beverage industry has been significantly affected by the lockdown measures adopted by governments to contain the spread of the new crown epidemic, and global pepper consumption is estimated to fall by 5%-10% %, but the decline in global pepper production has become the dominant factor in the increase in global pepper prices.
At the same time, the application field of pepper has been further developed in recent years, not only in the field of seasoning but also in the field of medicine, additives and cosmetics.
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