Freights in general
Due to Covid-19 and mergers of shipping companies, freight rates have increased massively, especially for Asian – European traffic. Here are some examples:
Ho Chi Minh City (Vietnam) to Hamburg from
850 USD to 4250 USD for 20 ft. container.
This results in an increase of freight costs from
EUR 0.056 to EUR 0.283 p/kg for Pepper white and black and Cassia.
Qingdao (China) to Hamburg from 700 USD in March 2020 to currently 5000 USD for 20 ft.
Garlic, paprika and chili are affected, their freight charges increased from EUR 0.04 to EUR 0.294 per kg.
Further increases in freight costs until the end of 2021 are very likely.
ETO / ethylene oxide from India
In the past few weeks, several reports concerning sesame from India fumigated with ETO have appeared in the European rapid alert system for food and feed (RASFF). The problem was also transferred to spices from India.
AKO The Spice Company! Only buys eight products from India. At very early stage, we excluded the use of ETO in our contracts with suppliers. We check compliance with our agreements by analysing incoming goods and have not yet determined any ETO fumigation.
Black and white pepper
Because of the poor harvest prospects and the new high freight-level, prices are rising worldwide. The harvest in Vietnam is expected to be
max. 220,000 tons instead of about 300,000 tons. This means a volume decrease of approx. 30% in 2021. Other suppliers such as Indonesia and Brazil are also expecting low volumes.
In addition, the supply is becoming scarce because some countries – such as China – presently cover their need of white pepper directly in Vietnam due to currently still low-price level. We expect a long-term price pressure.
On our own behalf
Organic is the new conventional – the segment is developing very well. After having invested a lot in organic products for a few months, we can dispose of larger quantities in the origin. We have been passing the price advantage on to you for some time now and offer organic products very cheaply.
In return, we now have to increase the minimum purchase quantity to 200 kg per order for cost reasons. (A combination of different organic articles in one order is possible.)
We ask for your attention.
AKO The Spice Company! certified according to FSSC22000.