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After a detailed discussion at the 42nd Session of the International Pepper Community held from 27th to 30th October 2014 in HCM City, Vietnam, , estimated Production and Export figures for pepper in 2014 would be around 336,200 Mt and 268,755 Mt, respectively, as against 379,300 Mt and 278,100 Mt in 2013. Production and Export during 2014 will decrease by 43,100 Mt (11%) and 9,344 Mt (3%), respectively, in comparison to 2013. Overall decrease in production was due to significant drop of production in India, Indonesia and Sri Lanka, mainly due to adverse climate prevailed for pepper. Taking into account of stock brought forward from 2013, import and domestic consumption in 2014, around 59,000 Mt of pepper would be carried forward as stocks for 2015. The stock carry forward is considerably small when compared to stock at the beginning of the year at 84,700 Mt. This quantity carry over for 2015 is expected to meet only the export demand before the new crop of 2015 arrives in the market. Under this situation, pepper prices in the coming months are expected to remain high.

Price

In October 2014, pepper prices at source markets showed a mixed response. Local prices in Brazil, Malaysia and Sri Lanka increased; while in India and Indonesia decreased marginally. In Vietnam, the local price was relatively stable. In the case of FOB price, an increase of around 3-4% was recorded in Malaysia and Vietnam. In Indonesia a marginal increase of 1% was also recorded; while in India and Brazil the fob price decreased marginally by 1%.

The IPC pepper price index increased 2.52 point for black and 4.97 point for white pepper in October 2014 (Table1). The composite price of pepper increased marginally by 0.7% and 1.7% to US$ 9,813 and US$ 12,954 per Mt for black and white pepper, respectively in October 2014. (Table 2).

Table1. IPC Price Index (Base price: Average 2006 - 2010)

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

Note: Composite prices are derived from calculation of monthly export and FOB price of the top five pepper exporting countries (Vietnam, Brazil, India, Indonesia and Malaysia)

Table 3: FOB Prices of Black Pepper in US$ per Mt

Table 4: FOB Price of White Pepper in US$ per Mt

Export Performance

During October 2014 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 and supply from Lampung was also minimal, due to significant drop in the July/August production. The six major exporting/producing countries together exported around 17,200 Mt in October, 2014 (around 86% of black and 14% of white) as against 26,200 Mt in October 2013, registering a significant decrease of 34%. During January - October 2014, export volume from these countries decreased by 4%. During first ten months, pepper export from those countries in 2013 was 232,350 Mt. While in January to October 2014, export performance was only 224,000 Mt (around 87% of black and 13% of white). Figure 1explain the clear picture of pepper export during first ten months in 2013 and 2014.

Indonesia - During the month of October Indonesia has exported 4,500Mt of pepper comprising of 3,000Mt of black and 1,500Mt of white pepper, reporting a decrease of 28% compared to the export of 6,228Mt exported in October 2013. Total export during January to October, 2014 was 28,500Mt pepper (17,100Mt of black and 11,400Mt of white). When compared to export in the same period in previous year, a significant decrease of 27% was observed. Up to December 2014, total export of pepper from Indonesia is estimated to be at 36,000Mt, leaving a carryover stock of around 11,700Mt. Production decrease of pepper from 63,000Mt in 2013 to 52,000 in 2014 is expected.

Brazil -During October 2014 Brazil is estimated to have exported around 4,000Mt of pepper as against 4,226Mt in October 2013. Total export of Brazil during January to October, 2014 was around 23,300 Mt, registering a decrease of 6% from 24,730Mt in January to October, 2013. During the year 2014, export of pepper from Brazil is targeting to be at 31,000Mt as against 30,600Mt. This is possible, since production of pepper in this year is 1,000Mt higher than last year.

India - India is estimated to have exported around 1,000Mt of pepper in October 2014 and total export in first ten months of 2014 is estimated to be at of 14,500Mt. When compared to export of 16,400 Mt in the same period during the last year, a 12% decrease is observed. Up to December 2014, around 17,000Mt of pepper is estimated to be exported from India, as against 20,100Mt exported in 2013, recording 15% decline in export of pepper.

Malaysia - Pepper export during October 2012 is estimated at around 1,200Mt (1,000Mt of black and 200Mt of white) as against 1,320Mt exported in October 2013, recording a 9% decline. During January - October 2014, however export of pepper from Malaysia is estimated to reach 10,730Mt, an increase of 9% when compared to export in the same period in last year.

Sri Lanka - During October, 2014, Sri Lanka has exported 1,500Mt of pepper as against 2,608Mt in October 2013, recording 42% decline in export. During January to October 2014 pepper export from Sri Lanka was around 10,000Mt as against 18,529Mt exported in the same period last year, registering a significant decrease of 46%.

Vietnam - In October 2014, pepper export from Vietnam was around 5,000Mt as against 9,988 Mt exported in October 2013, registering a significant decrease of 50%. Early shipments of 2014 crop may have reduced exports during October. Total pepper export during the first ten months from Vietnam was estimated at around 137,000Mt, against 124,011Mt in the corresponding period of the previous year: an increase of 10%. Total estimated pepper export, based on the available information and export performance during first ten months, equal to be around 145,000Mt.

Overall export of pepper from the six major producing countries during first ten months (January to October) of 2014 was 224,950Mt, which is 8,350Mt less than the export volume during the same period in 2013. During exports are expected from Indonesia, Vietnam and Brazil and the total pepper export from the six major producing countries in 2014 is estimated to be less than the total exports in 2013. Production decline in all the countries, except in Vietnam, due to various reasons, mainly unfavourable weather conditions and poor crop management, has been identified as the reason for low exports. Prevailing higher prices may compel to release stocks and if so, the short supply of pepper during 2015 also cannot be avoided.

Estimated export figures during the month of October and January to October period in 2014 and 2013 are given in table 5.

Table 5. Export of Pepper by Country during October and January - October (2014 and 2013) Mt.

Note: Figures are tentative and subject to change