Rob’s Crystal Ball
An Oleoresin Market Report
A smaller crop in China, rising energy costs, floods in the Yunnan Province, coupled with heavy rains in Karnataka in India are all affecting the chili market. Heavy rain in India was just the latest blow to the crop. We expect higher prices for the high color varieties compared to last year. We strongly advise that you contract for your projected requirements for 2022. Given the logistics challenges with regards to both production and transportation, it is Trilogy’s intention to purchase based on customer projections and contracts. After over a dozen years of communicating with producers from all regions we are convinced that covering is the best course of action for 2022.
After two seasons of above average prices caused by adverse weather, farmers increased their acreage. However, the recent rains in India will reduce the size of the next crop. This may keep prices at higher levels than anticipated. We will have greater clarity on pricing in the next few months. The influence of COVID 19, with the potential to create production interruptions, is an unquantifiable factor at this stage. Please provide your expected purchase volumes so we can provide you with the most favorable quotation at the right moment in time.
Black Pepper Oleoresin
After over a year of historically modest prices, the global market price for black pepper has been increasing. Many of our long-term customers took our suggestion and have already covered their 2022 requirements.
Vietnam, the largest producing country, delivered a smaller crop as a consequence of soft price levels through 2021. Our in-country, market intelligence has predicted lower carryover stocks, which in turn is supporting higher prices.
Our report on black pepper would not be complete if we did not mention the piperine-rich oleoresin quality that is extracted in Sri Lanka. The typical small December crop was smaller than usual. This was due to untimely rains, and has resulted in extremely higher prices for the light berries. While prices have firmed considerably for months it is very possible prices could move even higher. Our recommendation is for customers to cover their needs for the next 6-9 months.
Cinnamon prices have advanced and our frequent communications with processors suggest that prices could continue to move up. There is the likelihood of a tight supply due to all of the challenges posed by the pandemic including shortages of labor and transportation interruptions. In addition, please note, we carefully source our cinnamon and do our best to maintain inventory for this very challenging product. If you are not a customer, please inquire for samples and information.
This February crop is reported to be average in the low curcumin quality and we expect stable prices into 2022.
While the rains have been harsh to ginger in India the Nigerian crop was quite favorable. Therefore, this February harvested crop is forecasted to be stable. In this climate anything stable is welcome news. Please give us your volumes when the time is right.
Fennel and Celery Oleoresin