The official exchange rate has been fixed at 16,650 Vietnamese dongs per dollar, but the unofficial rate soared to around 19,500 recently. The government has announced strict action against its illegal trade.
The volatile currency market has upset exports, and foreign buyers, especially from the US and EU, are staying away. These countries have already created inventories for the next two months.
The government action has enthused the pepper market and the V-ASTA grade perked up on Monday and quoted at $3,400 a tonne. It was hovering around $3,250-3,300 last week.
The 500 GL grade quoted at $2,950. The lower Brazilian tags are proving to be better attraction than the Vietnamese market. Brazil is offering the B1 grade at $3,250 and the B-ASTA grade at $3,350 (fob Belem). The country has a carry-over stock of around 8,000 tonnes. It exported around 13,000 tonnes during January-May, lower than last year.
The fresh pepper crop will hit terminal markets in Brazil in July-August. A normal crop of 35,000 tonnes is expected this year.
India is currently quoting $3,450 for the MG1 grade (fob Kochi), but there is not much overseas demand, according to leading exporters.
It is estimated that Vietnam is having a stock of around 40,000 tonne and the usual supply crunch in global markets during June-July is not expected this time. Vietnam had shipped around 50,000 tonnes till June.
