Black Pepper – Brazil & Vietnam
Brazilian black pepper price dropped by 17.6% YoY to USD 5.35/kg in W5 Jun-22. It is estimated that Brazilian black pepper production increased by 10.5% YoY to 105,000 mt in 2022. Container shortage and high freight costs led importers of Brazilian black pepper to hold the import. Which caused oversupply in the domestic market and the price to decrease in late June 2022.
Black pepper production in Brazil is projected to reach 105,000 mt in 2022, up 10.5% YoY.
In the world market, pepper prices last week were less volatile, and negatively affected by the rising USD. Specifically, the Dollar Index increased by 0.97%, reaching 109 points, with the highest inflation rate in the last 40 years. The rising dollar may continue to increase, pushing down the local VND & currencies of exporting countries, which will negatively affect the Black Pepper Commodity market. Pepper prices have fallen continuously over the past few months and inflation has caused global consumption to decline. Importers are very concerned about the coming monetary tightening of the central bank to prevent global inflation and a global recession. Importers are extremely hesitant to replenish their significantly decreasing stock position.
World Food Prediction & Recommendation: Black Pepper prices will continue to remain stable or increase little. Suppliers are likely to withhold stock to avoid losses by selling at lower prices. Any good demand from China will push the prices high. We recommend to place orders now to avoid delays in receiving goods. We believe it is better to secure orders now at a competitive price rather than take a chance and wait for prices to drop further.
Bell Pepper – Spain
The Murcia region suffered severe rainfall in March and April 2022, which affected the planting of the bell pepper crop. As a result, the Spanish bell pepper harvest season, which began in May 2022, reduced production by 30%. This led to the wholesale price of bell pepper in Spain surging by 42.64% compared to last year.
World Food Prediction & Recommendation: Since Spanish Bell Pepper accounts for nearly 8% of the global market, we predict big shortages in supply by September. Our recommendation therefore is to place orders soon, absorbing a higher price, to avoid even higher prices and unreliable supply later in the year.
Sesame Seeds – China & Tanzania
Tanzania is among the world’s top producers and one of the biggest exporters of the sesame seed. Its production and exports have seen steady growth and it is expected to keep that momentum going forward. Prices have however increased, due to lower production and its rising cost. Premium grade white sesame originating from the southern half of the country traded at Tsh. 3,025 ($1.30/kg) during week one of sales.
Sesame seed prices in Tanzania have increased by more than 65% since 2021 with China buying more than 90% of exports.
World Food prediction and recommendation: Prices of sesame seed may increase by up to 10% as Chinese sellers keep holding onto stock over the next 2 months. It is therefore a good idea to secure sesame orders now, before prices increase as a result of Chinese buying.
Chilli Pepper – Turkey & China
The wholesale price of the dried chili pepper in Turkey had registered a near 200% YoY increase. The dried chili price has been directly affected by the rising inputs in Turkish chili production. Soaring inflation rates, which underpin production costs, are substantially increasing the cost of chili pepper production. Additionally, there is an increasing global demand for dried chili driven by India’s pepper shortage, which has caused prices to increase further.
World Food Prediction & Recommendation: We believe that the current prices of Chilli can still increase more due to low availability of good quality chili and damage to new crop . Already we are seeing prices in Indonesia, China and India go up and up. There is no correction of prices. We recommend buying till the end of this year
Garlic – China
There was plentiful garlic supply in China in 2022, and due to the volume of old stocks and new harvest supply, garlic prices had dropped at the end of May However, garlic prices have increased to this week, due to good demand , inflation and high energy prices
Currently there is still 500,000 MT of old garlic and 1,800,000 MT of new garlic stored, and the new garlic must be stored in refrigerated warehouses before September 1, 2022. The total storage volume is estimated to be more than 4.5 million mt in 2022, which is the biggest volume of history.
While prices will remain high until September, the 2023 season garlic sowing area will become the determining factor of future garlic prices. 2023 garlic sowing time is in September/October.
World Food Prediction & Recommendation: We believe that garlic prices will increase over the next few months. This is because the climate this year has been extremely unreliable, especially in the Asia. Experts predict very cold and wet weather in China for September/October 2022, which is unfavourable for garlic harvesting. A lacklustre garlic harvest in China will continue push garlic prices higher till the end of 2022. We recommend that you should secure garlic orders now, before prices increase even further. This will also avoid you experiencing unnecessary delays in delivery times.
Onion – Mexico and Egypt
Mexican onion prices are increasing due to high inflation in fertilizer, labor, and gas fee. The government is creating initiatives to try to control inflation and food prices.
The wholesale price of red onions in Egypt skyrocketed 65.21% compared to 2021. The combination of an inflation hike and the seasonality led to fluctuations in the price. In May, according to officials, annual inflation reached 13.5%. On top of this, high demand from the UK, and Arab countries also contributed to maintaining the high price level of red onion prices.
Turmeric – India
Turmeric prices in India have increased due to lower supply. Recent monsoon rain in Maharashtra in July 2022 has caused Indian turmeric production to decrease in 2022. Previously, the Gujarat region also experienced severe rainfall followed by heatwaves in April-May 2022. The weather anomalies in India interrupted the production of turmeric.
This has caused an enormous price increase, compared to the previous month.
World Food Prediction & Recommendation: Given that India is the leading exporter of turmeric worldwide, we believe that prices will remain high since no other country will be able to fill the supply gap that currently exists in the market. Therefore, we recommend that you place your Turmeric orders soon to make sure you get high quality goods at a more reasonable price.
Global Sea freight situation
Sea Freight costs are still very high and worldwide delays are continuing. Despite legal measures by the United States to bring down the global cost of shipping, nothing has worked. There are still labor shortages, blocked routes due to the Russia-Ukraine conflict, and difficulty working with shipping companies to ensure goods arrive to Russia in a timely and fairly-priced manner. This has caused a global reduction in demands for imports, which over time should incentivize shipping companies to reduce their prices as they strive to maintain their revenues.
