According to Chinese pepper website e658.cn, a relatively small number of pepper producers in north China have returned to the market as trade resumes, most of them continue to trade outside the market. Farmers and traders are quite eager to trade and there is more than enough supply to make trade viable. However, buyers do not show great enthusiasm. They are able to pick and choose, which puts pressure on the price. Supply is abundant, but demand is low, which means the price is falling and pepper supply is slowing down.
Pepper supply:
1. Farmers are not optimistic about the rest of the season because the price is already falling. Many farmers are offloading their stock.
2. The pepper trade was delayed by more than one month because of the COVID-19 epidemic. Although the market has not yet completely recovered, the price of peppers is 0.7-0.8 yuan [0.10-0.11 USD] lower than around this time last year. Traders with stock in storage are worried.
3. The remaining supply outside warehouses is larger than in previous years. The pepper trade was severely delayed by the COVID-19 epidemic, and this in turn reduces the trade season for pepper from storage. Many traders with stock in storage have given up hope for any improvement this season.
Pepper demand:
1. Although many wholesale markets have opened and sellers are supplying pepper, many of their clients have not yet returned to work, which severely slows down the market.
2. An online market survey on e658.cn shows that many processing factories and restaurants are still temporarily closed down for business. Just as many schools are still not open. The ability of the end-market to absorb the supply volume of pepper is limited. This has a major effect on the pepper market.
Source: e658.cn