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Cambodia’s famed Kampot pepper withers in scorching heatwave

LONDON, United Kingdom — European and Asian stock markets were flat to slightly lower Tuesday on the eve of key US inflation data that could have a huge bearing on the extent of US interest rate cuts this year.

The tepid performances were a carry-over from Monday on Wall Street, where the Dow fell marginally, breaking a winning streak.

April’s US consumer price index (CPI) follows Tuesday’s upcoming relea se of American producer prices.

“We’re seeing quiet trading across the board… as traders brace for tomorrow’s headline CPI data,” noted ARJ Capital analyst Manoj Ladwa.

“A recent downturn in US data has put (rate) easing expectatio ns back in focus,” he added.

This week’s economic releases follow forecast-beating US figures for the first three months of the year that have seen investors whittle down their expectations for the number of rate cuts — from six in January to at most two now.

Analysts said a miss in either direction on CPI could have a big impact on markets, with JPMorgan Chase & Co’s Andrew Tyler saying “the key risk is a hotter CPI print”.

Rodrigo Catril at National Australia Bank said while US inflation was expected to have slowed slightly in April, “any small deviation from the consensus could trigger a meaningful reaction in markets given the current heightened degree of (sensitivity) around inflation and the outlook for Fed policy”.

The European Central Bank (ECB) and Bank of England (BoE) are also under the magnifying glass for when they could start to cut rates as inflation cools.

Official data Tuesday showed UK unemployment edging higher in the first quarter, which analysts said was unlikely to alter the outlook for BoE cuts.

UK borrowing costs are expected to be lowered in August but traders have not ruled out a decrease in June, when the ECB is forecast to start trimming interest rates for the eurozone. Shares were little changed in London while they dropped slightly in Paris and Frankfurt.

Shares in Anglo American slid 2.5 percent in London after the mining group announced plans to streamline its business.

The news came one day after it rejected a takeover worth $43 billion from rival BHP.

Anglo on Tuesday said it would offload steelmaking coal, diamond and platinum businesses and focus on critical minerals, as it seeks to benefit shareholders.

In Asian trading Tuesday, leading stock markets closed mixed. Hong Kong’s main index fell despite tech titans including Tencent and Alibaba rallying as they prepared to announce their first-quarter earnings.

After the market shut, Alibaba said revenue rose 8 percent in its previous fiscal year.

Meanwhile, the United States said it was hiking tariffs on $18 billion worth of imports from China, targeting critical minerals and other strategic sectors like electric vehicles, batteries and steel.

London – FTSE 100: FLAT at 8,416.58 points

Paris – CAC 40: DOWN 0.2 percent at 8,196.73

Frankfurt – DAX: DOWN 0.2 percent at 18,699.22

EURO STOXX 50: DOWN 0.2 percent at 5,069.60

Tokyo – Nikkei 225: UP 0.5 percent at 38,356.06 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 19,073.71 (close)

Shanghai – Composite: DOWN 0.1 percent at 3,145.77 (close)

New York – Dow: DOWN 0.2 percent at 39,431.51 (close)

Euro/dollar: UP at $1.0793 from $1.0792 on Monday

Pound/dollar: DOWN at $1.2548 from $1.2555

Dollar/yen: UP at 156.38 yen from 156.21 yen

Euro/pound: UP at 86.01 from 85.93 pence

West Texas Intermediate: FLAT at $79.12 per barrel

Brent North Sea Crude: FLAT at $83.39 per barrel

KAMPOT, Cambodia — Farmer Chhim Laem shakes his head as he walks between long rows of dead bushes, their brown leaves scorched by heat and drought that have devastated Cambodia’s famed Kampot pepper crop.

Known for its intense floral flavour, Kampot pepper is prized by top chefs around the world and sells for up to $200 per kilo.

Nurtured for generations in two provinces in southwest Cambodia, the pepper industry survived the genocidal Khmer Rouge and decades of instability, but now faces the threat of extreme weather driven by climate change.

“It is so hot this year, no rains, and we have no water to water the pepper plants,” Laem told AFP. “So they all died.”

South and Southeast Asia have sweltered in recent weeks under record temperatures, with governments closing schools, people dying of heatstroke and farmers praying for rain.

Scientists warn that human-induced climate change will produce more frequent, longer and more intense heatwaves.

In parts of Cambodia, the mercury nearly hit 43 degrees Celsius (109 Fahrenheit) in late April — after a six-month drought that pushed farmers to a breaking point.

All 264 of Laem’s pepper bushes perished, the 55-year-old explained, thanks to water shortages and hot weather.

Production has grown in recent years, boosted by the European Union granting the spice a “protected geographical indication” in 2016 — meaning that only pepper grown in a designated area can be called Kampot.

The Kampot region produced about 120 tonnes of peppercorns last year, but farmers say that excessive heat and rain have made 2024 the worst on record.

Laem earned about $1,000 from his farm last year, but said he expects a fraction of that now.

“I am so sad, but I don’t know what to do,” he said.

Nguon Lay is a fourth-generation pepper farmer, harvesting nine tonnes from his nearby five-hectare farm last year.

But the 71-year-old farmer expected to harvest nothing this year.

“This year we meet the biggest obstacle,” he said, while examining a dying pepper bush.

Torrential rain destroyed the plants’ flowers earlier in the season, with more dying in the prolonged drought that followed.

“So it is the worst year. We don’t know what to do. We see problems, but we can’t resolve them,” Lay said.

Like other farmers, Lay said he knew the problems came from the weather and the environment.

Several ponds used to water his plants have dried up, and his workers only water the crop once every five days.

“We have been prepared. We know about climate change, we have stored water, we built roofs to protect our peppers from the hot weather, but it was not enough.”

“So many pepper plants are dying,” he said, adding that he no longer goes to his farms because it is too painful.

“This year we think we will get nothing,” he said, adding that what little can be harvested is of lower quality because of the weather.

Kampot pepper gained global acclaim during the French colonial occupation of Cambodia when it was exported widely, but the industry was nearly wiped out during the Khmer Rouge era.

In more recent years it has bounced back, gracing hip restaurant menus across the globe.

The pepper comes in green, black, red and white varieties — the colour changes as the corn ripens, with green the youngest and white the most mature.

Lay said consumers had no idea of the difficulties facing Kampot farmers, but they will soon see the effects.

“For 2024 and 2025, we won’t have abundant pepper for them to eat,” he said.

“It is zero!”

Kann Sinouch, president of the Kampot Pepper Promotion Association, said he expects this year’s pepper yield to be halved — and warned of an export shortage in 2025.

He told AFP the changing weather meant farmers were unable to expand their farms, and instead were stuck struggling to keep their existing plants alive.

But Chan Deng, who has been growing pepper since the 1960s, said he would not surrender to the unpredictable weather.

“This year, it is strangely hot,” Deng, 67, said.

His pepper yield plummeted from 300 kilos last year to around 10 kilos in 2024, with 20 percent of his plants dying due to the hot weather.

But Deng said he will dig more ponds to store water, hoping that in three years a good yield will return.

In the meantime, he said, “we will fight against nature”.

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