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Thứ 5, 08 / 12 / 2022

There are only a few days left until the end of 2021, which will mark the end of more than two years of turmoil in the global economy due to the impact of the covid-19 pandemic. It is not immune to the pandemic’s overall effects, the pepper market has seen continual fluctuations in recent years. Let’s look at the pepper market during the past and predict the price trend for 2022.

Price fluctuation of pepper around the world over the years

Firstly, let’s take a look at the change in pepper prices in recent years.

The global pepper price had an upward trend from 2005 to June 2015, then a downward trend from June 2015 to October 2020, and currently the price is in a period of the upward trend from October 2020 to the present. It took 10 years for pepper prices to increase from 2,000 USD/MT to peak at 10,000 USD from 2005 to the end of 2014. After peaking at the price of 10,000 USD/MT, a correction occurred and the pepper price returned to its former level of around 2,000 USD/MT.

In general, during the past time, pepper prices have experienced through 8 specific stages as follows:

  1. Stage 1: Sideways trend: According to the above chart, from 2005 to 2006, the average price of black pepper ASTA in Vietnam, Lampung, and Brazil was 1,373 USD/MT.
  2. Stage 2: Price Increase: From the beginning of 2006 until early 2007, the price soared to over 3,800 USD/MT.
  3. Stage 3: Adjustment: Following the price increase in stage 2, the price adjustment phase lasted until the end of 2009, with a price of 2,000 USD/MT.
  4. Stage 4: Price Increase: In mid-2011, the price of pepper increased from over 2,000 USD/MT to 8,000 USD/MT.
  5. Stage 5: Adjustment: at the end of 2014, the price of pepper decreased from 8,000 USD/MT to 6,000 USD/MT.
  6. Stage 6: Price increase: pepper price increased from 6,000 USD/MT to 10,000 USD/MT by the end of 2015.
  7. Stage 7: 4.8-year bearish cycle: Pepper prices fell from a high of 10,000 USD/MT in October 2020 to 2,000 USD/MT.
  8. Stage 8: Price Increase: From October 2002 to October 2021, the price of pepper increased to 4,867 USD/MT.

In general, pepper prices have experienced an upward trend in the past 10 years and a decreased cycle in the 4.8 years and currently, the pepper price has been beginning the next price increase cycle from October 2021 until now. However, before reaching any predictions about whether pepper prices will rise or fall in 2022, many more facts about the current context must be considered.

The current situation of the pepper market and the factors influencing it in 2022

Supply and demand are the two most important market factors impacting the commodities market in general and the pepper market in particular. So, how will the current situation affect supply and demand in the pepper market?

For Supply

In 2022, it is expected that the supply of the main producing countries will decrease due to unfavorable weather and low pepper prices in previous years; as a result, growers have not concentrated on care that affects the yield of pepper. Due to climate change, the crop in 2022 is expected to be slower.

Meanwhile, the Covid-19 pandemic has had a number of consequences, including higher fertilizer prices and labor scarcity, both of which are affecting pepper production in the year 2022. The production forecast for the countries is as follows:

 

The pepper production forecast

  • Vietnamese pepper production is estimated to reach 200,000 tons in 2022.
  • Brazil will produce 105,000 tons of pepper,
  • India will supply 60,000 tons,
  • And Indonesia will produce 50,000 tons.

In 2022, total output is estimated to reach 520 thousand tons, with an inventory of around 50,000 tons. As a result, global output is expected to reach 570 thousand tons in 2022.

For Demand

  • The consumption demand of pepper in the world is predicted to increase by 6-8 % every year from 2015 to 2019, and by 2022, it is expected to increase from 3-5 %, which is the lowest level.
  • It can be seen that demand and total production output in 2022 are at the same level, while other factors such as the control of the Covid-19 pandemic, freight rates that have gradually stabilized in the last two months, and government policies to pump money into the economy to help it recover. These are factors that positively affect pepper prices in the near future. Besides, there is still a certain amount of inventory in the market that has not been sold out, leading to a slow increase in demand in recent times.
  • The consumption demand of pepper in the world is predicted to increase by 6-8 % every year from 2015 to 2019
  • Based on the above-mentioned reasons, the price of pepper will not be much change in the coming time. More articles about the pepper market may be found at website of Vietnam Pepper Association: http://peppervietnam.com/
Source: http://pearl.idm.edu.vn/trend-of-pepper-price-in-2022/
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