Monthly Publication

In April 2018, market activity was concentrated in Viet Nam since new material from this year harvest in the largest producing country has ready to enter the market. As reported earlier that production of pepper in Viet Nam this year is estimated to remain good. Although productivity of old plants has reduced, new plants have started contribute to compensate the decrease.

In Brazil, production of pepper in the state of Espirito Santo has experienced a significant increase in 2017 as the massive expansion taken place in the last view years has started to contribute berries. Pepper harvest in Espirito Santo is taken place in the first quarter. In Para state, the main pepper growing area in Brazil, production of pepper also good, but not as good as in Espirito Santo. This year total production is estimated to remain stable with slightly lower as a result of low investment in the garden due to continuous price decrease taken place in 2017. Output of this year harvest in India and Indonesia is also estimated to be higher. The situation has again pressed the market and as a result price continued to prevail at low levels.

In April 2018, the market of pepper has shown a mixed response with slow moving and price changed at narrow range. In Viet Nam the price increased marginally, while in other countries decreased. As a whole, price index of black pepper has shown a relatively stable, even increased marginally. In case of white pepper however, the price index decreased by 1.7 points (Table 1.). In March and April 2018, composite price of black pepper was stable at US$ 3.280 per Mt while for white pepper decreased by 4% from US$ 4,913 per Mt in March to US$ 4,736 per Mt in April 2018. When compared to price in April 2017, the price index has decreased by 43%.

Table 1. IPC Price Index (Base Year: Average 2011- 2015)

Note: The price index is calculated based on price developments in 2011-2015

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

Highlight on Malaysian Pepper

Malaysia has widely known as one of the main pepper producing countries and Sarawak state account for more than 90% of the annual production in Malaysia. Pepper producing area in Sarawak spread in the district of Kuching, Sarikei, Bintangor, Miri and Sibu. Other producing regions are Peninsular Malaysia and Sabah. Total production of pepper in Malaysia during 2017 was reported at 23,500 Mt, an increase of 2.2% from 23,000 Mt in 2016.

In the last IPC session held in Kandy, Sri Lanka in November 2017, it was reported that from 2018 crop season Malaysia will be harvesting 24,000 Mt of pepper, consisting of 18,000 Mt black and 6,000 Mt of white pepper.

Average productivity of pepper in Malaysia was around 1,300 - 1,500 Mt per hectare. Factor influencing production and productivity in this country pest and disease, high cost of input, price and weather pattern. Among the above factors, weather change was the main factor influencing the output. Unlikely with other producing countries, under the influence of pepper price increased steadily from year 2008 till 2015, area expansion and production increase in Malaysia was not very significant. Development of area and production in Malaysia in the last ten years is shown in table below.

Table 3. Area and production of pepper in Malaysia

Export and Import

In Malaysia pepper is processed in various types of commodity such as black and white pepper, either in whole as row material as well as in the form of crushed or ground pepper. Malaysia also produced green pepper and pepper oil in a marginal quantity.

Malaysia exported around 10-14,000 Mt of pepper annually. Major share of the total export, around 80% is black and 20% white pepper. Japan, China and Taiwan are the main market for Malaysian pepper. In the last few years Viet Nam also imported significant quantity of pepper from Malaysia. Export in the form of ground or crushed black and white pepper is around 10% of the total export, mainly goes to Japan. Beside exports, Malaysia also imports pepper at around 3-5,000 Mt annually from Indonesia, Viet Nam, India and other sources in consumer packs.

In the last five years annual exports were relatively flat at around 12-13,000 Mt. In 2017 total export of pepper from Malaysia was 12,200 Mt valued at US$ 72.7 million, a marginal decrease of 3% from 12,500 Mt in 2016 and 10% from 13,600 Mt in 2015 the top export quantity achieved by Malaysia. In terms of value, the export has decreased significantly by almost 50% from the top in 2015.This was due to significant decrease of price prevailed in 2017, which has reduced spirit of producers and traders to release material.

Table 4. Export and import of pepper in Malaysia

Table 5. Export or pepper by Malaysia to top five country of destination in Mt.

The last IPC session was held in Kandy, Sri Lanka in November 2017 reported that Malaysia targets to export 16,500 Mt. Seeing export performance in the first quarter 2018 as well as price and production development this year, the target may not be achieved.

In the first quarter, the market remained slow moving. During January - March 2018, Malaysia exported 2,850 Mt of pepper which was more or less same as exported in the same period last year. Supported by sufficient stock and anticipated better harvest marginally this year, export of pepper in 2018 is estimated to increase. But it will depend on the price development in the second half of the year.

The following chart will provide clear picture of monthly export development in the last three years.

Pepper price in Malaysia

Export of pepper from Sarawak, Malaysia is relatively small when compared with export in Viet Nam, Brazil and Indonesia. Hence, pepper development in Sarawak is so far not significantly influencing global market trend.

Pepper harvest in Sarawak mainly takes place in the second quarter. Black and white pepper is commonly produced in the country. Out of total pepper traded in Sarawak around 80% was black. In anticipation of new material comes into the market in May, pepper price at the forth week of April 2018 has decreased by MYR 0.8 per Kg for black from MYR 11.8 and for white pepper decreased by MYR 1.3 per Kg to MYR 17.9. When compared to average price in March, average price in April 2018 decreased by 8% for black and 4% for white pepper.