The Chinese pepper market suffers from the ongoing Covid-19 pandemic. The market absorbs a significantly smaller volume of pepper than usual. However, the volume of pepper in refrigerated storage is larger than ever.
The sales of Chinese pepper from refrigerated storage went well in May, but the overall volume still left in storage is larger than usual. According to Chinese pepper website e658.cn, the refrigerated warehouses supplied more than 10 thousand tons of pepper in May, but the remaining reserves are still higher than around this time last year. The pepper reserves are unlikely to sell out this year.
The restaurant industry suffered from the outbreak of Covid-19. Even though the outbreak is largely under control and restaurants are opening again, there is no doubt that pepper consumption significantly declined because restaurants temporarily closed.
The outbreak of Covid-19 stimulated the sales of some processed pepper products, but the overall consumption volume of pepper declined. The outbreak is now largely under control, but domestic demand for processed pepper products has not yet recovered.
Current conditions in the pepper market suggest that the price may have already reached its lowest point and there is not much room for the price to drop even further in the short term. However, there are still some obstacles that will make a sudden price increase unlikely.