Market Report – May 2021
Spice Market Overview
- The last crop harvest of Red Chilli harvesting is going on in all chilli growing states of India.
- Major chilli growing regions like Andhra Pradesh, Telangana & Karnataka have received unexpected rainfall in Feb’21 and noted 30% over normal rainfall, leading to lower productivity and impacting crop quality along with Aflatoxin issues.
- The quality of chillies of the third harvest as expected, will be affected. As reported, the area under chilli production in India during 2021 was better than 2020 but the yield per acre is expected to decrease because of diseases which affected the plant during the growing stages.
- The total production is expected to be around 1.60 – 1.70 million tons.
- Chilli prices were very high even during the peak season since there was a good demand from Chinese companies and exporters of stemless chillies.
- Speculators also played a major role in CAPSICUM keeping the chilli prices up throughout the season by buying chillies and keeping their inventories in cold storage facilities.
- The chilli markets are temporarily closed due to the pandemic and the re-opening of the markets depend on the prevailing pandemic situation.
Recommendations: Cover your requirement’s with Agro-Mills for your medium and long term requirements as the season is over and prices are expected to increase.
- Black pepper market prices across the globe have shown a mixed trend during the month.
- Indian markets have shown 2 – 3% decrease towards the end of April but Indonesian prices moved up considerably in the local market.
- After a price increase in the first half of April, Vietnam pepper prices have shown a declining trend towards the end of April. Sri Lanka pepper prices have shown a slight upward trend.
- The next black pepper crop in Sri Lanka and Indonesia are reported to be short compared to last year.
- Pepper harvesting in Sri Lanka is expected to start in May and harvesting in Indonesia is expected from July 2021.
- The second wave of the pandemic has made its impact in the pepper market which was reflected in the trade.
It is too early to predict the next Vietnam crop, however information from primary and secondary sources suggests that farmers are showing less interest in pepper and shifting their interest to other crops. This could impact on the pepper production next year.
Market Trend: Vietnam pepper prices have declined marginally decreasing demand from China and other importing countries, due to a second wave of the Covid pandemic. The marginal increase in black pepper prices were a result of ocean freight prices increasing because of unavailability of containers and vessels.
The new Indonesian Black pepper crop harvesting is expected to begin in July 2021. It is reported that there will be a shortfall of 20% due to unfavourable weather conditions. Black pepper light berries are expected to be available towards the end of July or the first half of August onwards.
Market Trend: The Indonesian black pepper price has been increased slightly. The increase of Indonesian prices could be as a result of high demand, limited carry forward stock and the strengthening of the Indonesian Rupiah against the US Dollar.
Sri Lankan Scenario
The Black pepper crop in Sri Lanka is reported to be short by 20%-30% from the previous season.
Pepper harvesting in Sri Lanka will start during May and crop estimate is about 15000-17000 metric tons.
Crop harvesting is getting delayed due to the pandemic issues in the growing regions.
Market Trend: The firm trend continued in domestic markets of Sri Lanka due to less carry forward stocks and good demand. Prices are expected to be firm during the season provided Oleoresin companies are aggressive in securing stock.
Recommendations: Cover your requirement’s with Agro-Mills for the medium and long term as prices are expected to increase. The crop shortage in Vietnam, Sri Lanka & Indonesia cannot compensate the Vietnamese crop.
- Turmeric harvesting is still going on in major growing states like Tamil Nadu, Karnataka, Maharashtra, Andhra Pradesh, Telangana and others, is expected to continue until the end of June.
- Over-all production is anticipated to be lower by 12% with carry forward similar to last year, making the overall supply lower by 9% to the 2020 crop season. Early and normal crop sowing is observed with good rainfall. Reported rain damages in Andhra, Telangana and some parts of Orissa & North East may affect the yields.
Market trend: Turmeric prices are stable at all turmeric markets. Aggressive coverage from spice companies helped turmeric prices to stay at these levels. The domestic demand was good as its usage for health reasons during the pandemic had increased.
Nutmeg and Mace
- Nutmeg harvesting in India is expected to start by June/July.
- The crop is reported to be short in India and all other origins in 2021, hence prices are expected to stay at higher levels for some time.
Market Trend: The prices are expected to be high in the short term and depend on the demand during the pandemic situation.
Recommendation: Cover your requirement’s with Agro-Mills for medium and long term, as the prices are expected to increase.