Drug dealers are worried about "smashing their hands", it's crazy! The price of pepper has risen from more than 20 yuan per kilogram to more than 70 yuan
Introduction: Market insiders believe that there is still capital speculation behind this, but the real market demand has not changed much.
"Nowadays, the prices of many Chinese medicinal materials have increased, and the price of pepper has increased the most, including white pepper, black pepper, galangal and amomum villosum." On June 20, Mr. Yang, who runs a wholesale business of flavors and spices in the Chinese medicinal materials market in Yulin City, Guangxi, told the First Financial reporter.
Yulin has been the main planting and distribution center for spices from China and Southeast Asian countries since ancient times. It distributes 80% of the country's spices and more than 2/3 of the world's spices. It is the country's largest import and export spice distribution center, spice pricing center and trading center. Boss Yang has been doing spice business here for more than 20 years. She said that pepper is the star variety that has increased in price this year. "In the past few months, I have seen it increase from more than 20 yuan to more than 70 yuan."
In recent days, according to the investigation of the First Financial reporter, unlike the wave of price increases of traditional Chinese medicines last summer, this year's price increase is also in the spice category. In addition to pepper, the prices of many imported spices have skyrocketed. Market insiders believe that this is still due to the hot speculation of funds, and the real market demand has not changed much. Some drug dealers say they have made a profit, while others are worried about "losing money" and are eager to ship.
"Black pepper is now more than 50 yuan per kilogram, and its quality has reached the pharmacopoeia standard. The market has fallen a bit recently, and it can be cheaper if the quantity is large. I still have dozens of tons of goods on hand." Mr. Wang, a merchant at Bozhou Traditional Chinese Medicine Market, told the First Financial reporter that the goods are kept in the cold storage and can be shipped at any time if customers need them.
Pepper, with hard fruits, is mainly eaten in the form of pepper powder, also known as pepper powder. Because it contains volatile oils and piperine, pepper has a unique aromatic taste and bitter and spicy taste. As the world's main condiment, the global consumption of pepper is about 500,000 tons per year, and Vietnam's exports account for more than 40% of the global consumption. Local production and procurement conditions affect the global pepper market.
From the distribution of production areas, the provinces that grow pepper in China include Hainan, Guangdong, Guangxi, Yunnan and Fujian. The suitable planting area in tropical regions of my country is limited, and it is not a major producer. Southeast Asia and other tropical regions are the main pepper cultivation areas, such as Vietnam, Indonesia, and African countries. Among them, Vietnam's pepper production accounts for 30% of the global production.
Boss Wang has been doing pepper business in Bozhou Chinese Medicine Market for 10 years. In his impression, the price in previous years was not as high as it is now. Until a few months ago, the price of pepper was only more than 20 yuan per kilogram.
According to the "Pepper Price Trend" of Kangmei China Traditional Chinese Medicine Price Index Network authorized by the National Development and Reform Commission, the price of black pepper has risen from around 25 yuan in January at the beginning of the year to more than 50 yuan now; the price of white pepper was 40 yuan/kg at the beginning of the year and has risen to 76 yuan/kg now.
"The attention to black pepper in the Yulin market is still high, and the market price is chaotic. The current price of 50 grams of black pepper is around 50 yuan, and there is still room for negotiation in bulk transactions. The price of washed and dried white pepper from Vietnam is 72.5 yuan/kg to 74 yuan/kg." said a Chinese medicine merchant.
"Most black pepper is imported, and the main producing areas are Vietnam and other Southeast Asian regions." Boss Yang said that the company has been paying attention to the price trend of pepper, but now it dare not move it. The price has already risen to a historical high. It is mainly due to the market economy, and the future rise and fall situation is unclear.
Market insiders believe that the price increase of pepper is due to many factors. "On the one hand, the shipment volume in Southeast Asian market is relatively large, and local shippers have been exporting to China; on the other hand, the price of spices in China was cheaper than that in foreign markets last year, and there was a phenomenon of price inversion, so there is also room for price increase," said Boss Yang.
In addition to pepper, many other Chinese medicinal spices have seen price increases. According to the ranking of product index increases in the last 10 trading days released by Kangmei Chinese Medicine Network on June 19, the price of Piper longum from Guangxi rose by 39.95%, with the latest price at 80 yuan/kg; cumin rose by 23.08%, dried ginger rose by 18.11%, and nutmeg rose by 17.24%.
"The supply of Pieris gracile to the market is not large, and the supply is purchased and sold in batches. The demand is still good and the market is stable. Affected by overseas factors such as pepper, the price has jumped sharply and nearly doubled. The general price of Pieris gracile is 89-92 yuan, and the highest retail price is 120 yuan. With the decline of pepper, the market quotations have been adjusted downward in a chaotic manner. The general goods have been reduced to 75 yuan, and the washed goods have been reduced to 80 yuan. The market outlook is unstable." Kangmei Chinese Medicine Network stated that the price of dried ginger rose to 24-25 yuan along with pepper, and holders paid more attention to it. The market declined with the adjustment of seasonings.
In addition, nutmeg also rose with the general rise in spices. Boss Yang mainly sells nutmeg. She told the reporter of China Business Network that this variety is also mostly imported from Southeast Asia. With the rise in the price of spices, it has also seen a slight increase.
The "Nutmeg Price Index" of Kangmei Chinese Medicine Network shows that in the first four months of this year, the price of nutmeg in the Bozhou market has remained at 54 yuan/kg. Since late May, the price has risen all the way to 68 yuan/kg, an increase of 14 yuan from May, a growth of 25.93%.
However, according to market insiders, the price of pepper is currently in a state of confusion. A reporter from China Business News found that the main reason is that the price has fallen in recent days. The prices quoted by merchants in Bozhou market for this variety vary, with some quoting 60 yuan and others quoting around 45 yuan.
"Pepper prices are chaotic." Kangmei Chinese Medicine Network's "Ten-Day Rise and Fall" commentary also stated that after the market for black pepper soared and plummeted in the past week, market holders have different mentalities due to different costs. In the short term, as the market rises, external followers continue to weaken, some low-priced sources continue to change hands, and the inflow of external sources continues to increase. The market continues to fluctuate, "In the short term, the turnover is insufficient and the expectation of rising is insufficient, and the market will continue to fluctuate and adjust."
"Similar price increases have occurred in previous years, but not so many varieties have increased in price, nor have they increased as much as they are now." In her 20-year career in the spice business, this is the first time that Boss Yang has encountered such a market. In her opinion, there is still idle capital in the market, especially some young people who are speculating more aggressively.
Mr. Luo, who runs a spice business in the Yulin Chinese herbal medicine market, also holds this view. Mr. Luo's family has been engaged in the flavor and fragrance business since his father's generation, and it has been more than 30 years.
The output of Chinese medicinal materials is greatly affected by factors such as resource scarcity, difficulty in picking, planting costs, and natural disasters. The price fluctuates greatly due to the supply and demand of products. In fact, the export volume of Vietnamese pepper continues to increase, and the export value also increases accordingly. China has always been one of the main countries for Vietnamese pepper exports.
According to statistics from the Vietnam Pepper and Condiment Association, Vietnam exported a total of 264,000 tons of various types of pepper in 2023, including 236,000 tons of black pepper and 28,000 tons of white pepper, with a cumulative export value of US$906 million. The export volume of pepper increased by 14% year-on-year, and the export value decreased by 8% year-on-year. Among them, a total of 60,000 tons of pepper were exported to China, an increase of 174% year-on-year. As a result, China has become the market that imports the most Vietnamese pepper in 2023. VPSA revealed that in the first four months of this year, Vietnam's pepper exports to China fell sharply by 95%.
Boss Luo said that at present, domestic pepper merchants still have a relatively large inventory. In addition, the price of pepper in the domestic market is inverted from the high market price abroad. "Under such circumstances, hot money is pouring in, and everyone is frequently changing hands. You sell to me, and I sell to you, which drives up the price immediately."
"After the influx of hot money, everyone has been buying at high prices to push it up." Boss Luo said that at present, everyone is still trading goods back and forth in the market, but the actual market demand has not increased, and the increased pepper imports in recent years have not been fully digested. "After all, only when the market demand is truly digested can the price be stable, and it still depends on the supply and demand relationship."
At the same time, the First Financial reporter found that some young merchants have been publicly releasing investment information on Chinese medicinal materials such as pepper and cardamom on WeChat short videos, Douyin and other Internet platforms. The reporter found that the production and market information advertised by the other party was difficult to verify one by one, and it was difficult to distinguish the true from the false. "We still have to be vigilant and not blindly follow the trend. We must follow the information released by the authoritative department." Boss Yang said.
Boss Luo said that despite the market speculation, some people still made money. "Those merchants who got cheap goods in the early stage were able to sell them in time and immediately sold them when the price reached a certain suitable level. If they kept holding on and waiting, and still looking for merchants with higher prices, they would probably lose money." Boss Luo said.
Amid the crazy market trend of white pepper, Mr. Zhang, a drug dealer in Bozhou, has sold out all the goods under his name. "I have sold out all the white pepper here. I don't have any stock left."
"I sold it for over 60 yuan, and now it's up to over 70 yuan, so I still made a little loss," Boss Zhang told Yicai Global. However, she also admitted, "Of course I didn't lose money. I bought it for over 50 yuan not long ago, so I still made a little profit."
Another Bozhou merchant, Mr. Liu, told the reporter that he was facing great pressure, mainly because he had bought pepper at 50 yuan per kilogram not long ago. If he sold it at the current price, he would lose money. "After all, the capital cost is included."
