Pepper increased sharply over the weekend in Vietnam. FAQ 500 g/l material is around $5900 pmt FOB HCMC and 550 g/l around 6200 pmt FOB HCMC. These are the two key materials used for making the Whole black re-cleaned, cracked and white pepper.
The main reason cited by major processors in Vietnam is the cash rich position of the farmers…ie;, they do not need to sell.
India remained stable over the weekend, so this price increase from Vietnam brings Vietnam roughly on par with India.
Where will the markets go from here ?
Very difficult to say. The bulls say, even at today’s level it is still just cheaper than all time high’s and if you take in many years of inflation, we should be well above these levels. Bulls see a major push later this year.
The bears say this push upwards will run out of steam, as it is essentially caused by a rush of orders for the Vietnam new crop ( March ) and a squeeze on supplies. Essentially there is plenty of pepper and this move upwards will falter soon and correct.