Monthly Publication

In the last issue it was reported that production and export estimates of pepper in 2017 would be at the level of around 472,500 Mt and 372,000 Mt respectively, as against 428,500 Mt and 314,000 Mt in 2016. Production and export increased by 44,000 Mt and 58,000 Mt respectively. The increase was mainly due to significant increase of production and export in Viet Nam and Brazil. Production and export of pepper in India and Sri Lanka also increase at lower rate. Stock brought forward from 2016 was reported 83,600 Mt. Import by producing countries in 2017 was 60,300 Mt and 163,700 reported for domestic consumption. Taking into account of 472,500 Mt of production and 372,000 Mt of export in 2017, it is estimated around 80,800 Mt would be carried forward as stocks for 2018.

In November 2017 pepper prices at source markets showed a decreasing trend. On an average the price felt down by 6%. Local prices in Malaysia decreased significantly by 14%. In India, Indonesia and Viet Nam the decrease was around 5% and in Sri Lanka and China 2%. In the case of fob price, on an average has decreased by 4%.

The IPC pepper price index decreased by 1 point for black and 2 points was recorded for white pepper in November 2017 (Table1). The composite price of pepper decreased by 1.2% to US$ 4,213 per Mt for black and 4% to US$ 5,900 per Mt for white pepper in November 2017. (Table 2).

Entering third quarter of the year pepper harvest in Brazil has completed. It is reported that total production of pepper in Brazil is estimated around 58,000 Mt, increased significantly by almost 40% from 41,600 Mt in 2016. The significant increase was due to pepper plants in area expansion has started produced. Favorable weather during flowering and fruiting season this year was also another main factor contributing to the significant increase. The significant increase in production has again pressed pepper price to further lower level. Pepper price in Brazil during November is reported very low at the level of US$ 3,500 per Mt, which is lowest among price prevailed in other producing countries. Although price decrease this year, export earning for Brazil from pepper remained high, even higher from last year as quantity of pepper exported this year increased substantially. Up to October (January- October 2017) export of pepper from Brazil has reached 46,000 Mt valued at US$226.5million. Up to December a volume of 55,000 Mt is estimated to be shipped from Brazil.

Closing the end of the month (November) initial harvest of pepper in India started and price in Kochi has decreased further. From current harvesting season, which is expected to be continued until January 2018, a volume of 64,000 Mt is estimated to be resulted. When compared to last year's production of 57,000 Mt, an increase of 12% is achieved. Since domestic demand of India is very high, more portion of the increase will be absorbed internally. During November local price of Malabar black in Kochi was on average at INR 407 per Kg decreased by 5% from INR 426 per Kg in October 2017.

In Viet Nam black pepper price was relatively stable, even increased marginally at the second half of the month. When compared to average price in October however, price in November was slightly lower. This situation is reflecting stocks in the internal market has limited.

It is noted that there was very heavy rains during flowing months due to tropical storms in last July which is predicted to affect the yield in 2018 in Viet Nam. According to Viet Nam Pepper Association, the 2018 crop in Viet Nam could drop about 15%. Some other surveyors believed that it could be lower in the range of 10-30%.

In Indonesia, pepper market remained weak. Low prevailing price was the main factor for the situation. Limited material as a result of lower output this year is also contributing to the weak situation. Farmers in Lampung and Bangka as well as in Kalimantan and Sulawesi however still keep maintaining their plants expecting better harvest and price in future time.

The most significant decrease of pepper price in November was taken place in Sarawak. Local price of black pepper in Kuching decrease by 15% from MYR 16.7 per Kg in October to MYR 14 in November. In Sri Lanka the price also decreased at lower rate of around 2%.

The USA market

In the United States of America spot price of pepper was at the level of US$ 4,770 per Mt for black pepper and US$ 8,160 per Mt for white pepper, which was recorded in November 2017. The price was lower by 6% from US$ 5,070 per Mt for black and US$ 8,580 per Mt for white pepper in October 2017 respectively. When compared to the price in November 2016 the price has decreased by almost 40%. During two years, the price has decreased by almost 60% from the highest in 2015 as shown in the following chart.

The United States of America is well known as the most important single market for pepper. The USA imports 70-80,000 Mt of pepper annually. In the last two years however, import of pepper into the USA decreased, although global production and export increased in 2016 and 2017, particularly in Viet Nam. In 2016 the USA imported 75,200 Mt of pepper, decreased from 80,400 Mt in 2015. The decrease was mainly due to decreased supply from Indonesia and Brazil, where production and export of pepper from these two countries decreased in 2016. Increased supply from Viet Nam was not compensated the decrease from Brazil and Indonesia.

In 2017 import of pepper into the United States is estimated to further decrease or maximum as the same as last year. Up to September 2017 import of the United States just reached 56,300 Mt, showing 4% lower from 58,600 Mt imported in the same period last year. Import from Viet Nam decreased 1,275 Mt (4%), but from Indonesia increased 1,825 Mt (26%). Import from Brazil decreased 2,000 Mt (23%) and from India also decreased 1,540 Mt (20%). Detail import of pepper into the United States from top ten countries is given below.