Bullish Rise: A Farmer's Journey Uphill

Bullish Rise: A Farmer's Journey Uphill

No one in the spice trade could have missed that the pepper market is very bullish. We often get asked what exactly is going on.

The new crop in Vietnam is the main trigger for the price increases. There was already much speculation preceding this crop. Rumors that many farmers have switched to coffee instead of pepper, as well as poor maintenance of the pepper plants, were prevalent. The general consensus was that the harvest would be about 20% less compared to previous years. This speculation helps drive up the price.
But there's more to it. Farmers themselves have started speculating. In the past, farmers needed to sell regularly for their own liquidity, but those days are gone. Farmers now have sufficient financial resources to bridge periods. And if they do need some money, they sell coffee. It is well known that most farmers in Vietnam grow coffee alongside pepper. The fact that robusta coffee is at an all-time high supports the farmers' liquidity and also strengthens their belief that the price of pepper can still go much higher.
In Vietnam, there seem to be social media platforms where farmers exchange thoughts. If those messages are accurate, their expectation is that pepper prices could rise by an additional 30% in the short to medium term, as prices have already increased by 10-15% since the beginning of the year.
We will closely monitor the market for our clients. Just like in the past, prices will change daily, and there will be movements even during the day. We are prepared in every way for a dynamic pepper market.
Besides intra-day price changes, we will likely see other patterns from the past reemerge. There will be periods when Vietnam is not the market maker, but other origins will take the lead for longer or shorter periods. This could include Indonesia, Brazil, or even India if prices rise further. We will continue to monitor this for our clients and anticipate accordingly.
Make sure to be on our list for regular market updates by email, contact your personal broker to make sure of this.

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