Affected by the sluggish demand, pepper trading in China is not active. At the same time, the price of Indian peppers did not fall but increased significantly. What positive aspects support this price?
1. The US dollar exchange rate continued to rise, and the cost of imports increased. From mid-April to early May, the US dollar exchange rate rose in a step-like manner. Affected by the exchange rate fluctuations, the import cost of Indian peppers continued to increase accordingly. The price of new arrivals in Qingdao Port also rose, setting off a price hike, and the increase has been even higher in recent days.
2. The inventory of Indian peppers is relatively low, and the holders of the goods stand in an advantageous position. Because the price of new Indian peppers has been fluctuating at a high level this year, the cost of getting the goods for importers is also high. In the case of the overall deviation of pepper demand, the risks in the later period are also greater. That's why importers are more cautious when buying goods. The import volume of Indian peppers was significantly smaller than that in other years.
3. India peppers outside the storage are finishing, and the quotation of peppers in the cold storage is high. India is located in the tropics, and the temperature in many areas can get as high as 40 degrees in April. The peppers outside the storage are also at risk of deterioration. Typically, most Indian peppers are put into storage before May. Although there is still a small amount of supply outside the storage, Chinese importers are not very willing to place orders due to the influence of the weather and the relative quality deviation. The cost of Indian peppers stored in cold storage has increased. Although some stockists are currently interested in selling, the asking price is generally high.
Affected by the cost, most Chinese importers have no intention of purchasing high-priced cold-storage peppers and are still choosing low-priced Indian peppers outside the storage. Therefore, once they start importing Indian peppers in storage, with the increasing cost of raw materials and import costs, the price of Indian peppers (good quality) arriving in Hong Kong will only increase.
To sum up, due to the high cost of Indian pepper itself, coupled with the depreciation of the RMB, the import cost of Indian pepper has continued to rise. Holders of the goods at the port have also raised their selling prices accordingly. Thus, the price of Indian peppers has risen significantly recently. But to a certain extent, the high price of Indian peppers no longer has a sales advantage, and it also inhibits the enthusiasm of buyers to get the goods.
Source: Zhongjiao