Monthly Publication

As anticipated earlier, total production of Pepper this year would be better, mainly due to significant increase of black Pepper production in India and Indonesia. Because of favorable weather conditions prevailed during flowering, fruiting and ripenning period, production of Pepper in Indonesia and India were reported to be much better than last year. Production at other producing countries, except Vietnam are also reported to be better . In Vietnam production of Pepper was reported to be decreased significantly this year. Hence the increase of production this year is not substantial.

Although production is better this year, export of Pepper is likely to be not more than what was achieved in 2014 ( 278,000 Mt). Price increase achieved during the last two years has increased farmerÔÇÖs holding capacity. They are not keen to release Pepper from this year harvest. In addition of the above, anticipation of lower harvest in the next season, has made farmer to hold stocks. Consequently, the price is anticipated to remain high until situation of upcoming harvest in India and Vietnam gets clearer.

In October 2015 Pepper market generally remained steady, but showed a mix response among origins. Price of black Pepper in India, Malaysia and Sri Lanka has increased, while in Indonesia and Vietnam it has decreased. In terms of white Pepper however marginal increases were recorded at all origins.

Price index of Pepper in October 2015 decreased slightly by 0.68 point for black, but increased 1.27 points for white pepper (Table 1). The composite price of black Pepper decreased marginally to US$ 9,421 per Mt from US$ 9,440 in September 2015. For white pepper a marginal increase was recorded from US$ 13,546 per Mt to US$ 13,600 Mt in October 2015. Monthly composite prices of black and white pepper are shown in Table 2.

Table 1. IPC Price Index (Base price: Average 2006 - 2010)

Table 2: Composite Price of Black and White Pepper (US$/MT)

In Lampung the market was inactive and price prevailed during the month was IDR 105,000 per Kg as against IDR 120,000 per Kg in September. Under this situation, farmers were not interested to release stocks at reduced price. Similarly in Bangka, farmers hold stock, anticipating price recovery. In addition to the lower price prevailed during the month, and the reluctance of farmer not to sell material is also an anticipation of lower harvest in the coming next season. It is reported that due to long stretch of hot weather this year, in Lampung, Bangka and Kalimantan, many Pepper plants, around 15-20% has died. Pepper plant with ages , between 1-2 year were not strong enough to withstand the heat. Replanting is expected to happen during rainy season and this is only expected to bear Pepper in the next three to four years.

In India, the price of black Pepper increased from INR 630 per Kg at the beginning of the month to INR 653 per Kg at the monthÔÇÖs close. The increase was likely because of stock at internal market has exhausted. In Sarawak, local price stood at the level of MYR 30 and MYR 50 per Kg for black and white pepper respectively. The increase in dollar price was due to strengthening of US dollar against Malaysian Ringgit during the month. In Vietnam local price of black Pepper decreased marginally, but at the end of the month the price has increased.

Table 3: Local Price of Black Pepper in US$ per MT

Table 4: FOB Prices of Black Pepper in US$ per MT

Table 5: Local Prices of White Pepper in US$ per MT

Table 6: FOB Price of White Pepper in US$ per MT

Export Performance

During October 2015 total export of Pepper from major exporting countries is estimated to have decreased, as export capacity of Vietnam, the most important source of Pepper has significantly reduced, despite pepper harvest in Brazil just completed last month. The six major exporting/producing countries together exported around 16,250 Mt in October 2015 (around 85% of black and 15% of white) as against 17,350 Mt in October 2014, registering a marginal decrease of 3% . During January - October 2015, export from these countries decreased by 5% from 225,000 Mt performed in January - October 2014 to 215,000 Mt of the first ten month of the year 2015. The following table and chart depicts clear indication of export of Pepper during January - October 2014 and January - October 2015.

Table 7
Export of Pepper by Country
during October and January - October (2015 and 2014)