Monthly Publication

Pepper market experienced a declining trend since 2016, where price has decreased from the peak in 2015 at an average of US$ 10,700 and US$ 15,500 per Mt for black and white pepper respectively in New York to US$ 8,800 and US$ 15,500 per Mt for black and white pepper respectively in 2016. In early 2017, the price decreased further to the level of 6,725 and US4 10,585 per Mt respectively for black and white pepper recorded in March 2017.

The continuous decrease was mainly due to significant increase in the supply, particularly in Viet Nam occurred in 2016 as reflected by significant increase of Viet Nam pepper export in 2016 from 133,600 Mt in 2015 to 179,200 in 2016. As the largest producing and exporting country, Viet Nam played important role in determining market direction.

During 2005 - 2015 the world annual production and export was on average at the level of 345,000 Mt and 255,000 Mt respectively. In 2015 it has increased significantly to approximately 416,000 Mt and 302,000 Mt respectively and in 2016 is estimated to have increased further to about 420,000 Mt for production and 316,000 Mt for export.

As reported in the last IPC Session and latest information received by the IPC, production of pepper in 2017 is anticipated to be better and increase further to 440,000 Mt. Out of this a volume 326,000 Mt is for export. Under this situation market pressure is unavoidable.

The following table shows provisional statement on developments of production export and import of pepper by producing countries during 2015 and 2016 in metric tons.

Note: Some figures are provisional subject to revision.

Pepper price.
During March 2017, the market continued to show a declining trend. Pepper Price Index decreased by 6.63 points for black pepper and 7.18 points for white pepper in March 2017 (Table 1). The composite price of black pepper decreased by 7.57% to US$ 6,097 per Mt from US$ 6,590 in February 2017 and for white pepper decreased by 7.7% from US$ 9,616 per Mt in February 2017 to US$ 8,874 in March 2017 (Table 2). The decrease was mainly influenced by the significant decrease of FOB price in Viet Nam, the largest pepper exporting country. Price decrease was also recorded in other producing countries.

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)

Pepper price at all producing countries decreased, both for black and white pepper in March 2017. Significant price decrease in local market was recorded in Viet Nam by 13% while in India and Sri Lanka the decreases were marginal.

In March 2017 pepper harvest in Viet Nam was in the upswing trend and price decreased due to significant quantity of new material from current harvest has ready in the market. Trading was not brisk, as overseas buyers were expecting to get material with more competitive price. Information from VPA received that output of pepper from this year harvest in Viet Nam is expected to be better. Under this situation market pressure was occurred and price decrease was unavoidable. In March 2016 local price of black pepper in HCMC decreased by 13% from VND 118,000 per Kg in February to VND 105,000 per Kg in March and for white pepper decreased from VND 162,000 to VND 145,000 per Kg in March 2017. In the case of FOB price, black pepper price decreased by 7%, while for white pepper decreased significantly by 14%.

In 2016 total export of pepper from Viet Nam was 179,233 Mt, a significant increase of 34% from export of 133,569 Mt in 2015. The total export of pepper by Viet N is accounted for more than 57% of world pepper export in 2016.

In India pepper harvest was still continuing in March. It was reported that the output was reported to be better from last year, but not as good as estimated earlier. Around 55,000 Mt is expected to be harvested this year. Average price prevailed during the month has decreased following material from this year harvest has entered the market. During March local price of pepper in Kochi decreased from INR 590 per Kg at the beginning of the month to INR 582 at the monthÔÇÖs closed. On an average, local price of Malabar black decreased marginally by 1% from previous monthÔÇÖs average. A marginal decrease was also recorded on average price of pepper prevailed at growing areas in Sri Lanka.

In Lampung the market was very quiet, in view of limited material in domestic market. Stock at firmest has exhausted. Only some strong farmers still keep limited stock. The price however has decreased, influenced by decreasing price trend prevailed in Viet Nam. On an average, local price of black pepper in Lampung decreased by 8%.

Muntok white pepper price at domestic market in Bangka prevailed during the month was at around IDR 110,000 per Kg, a marginal decrease from IDR 116,000 per Kg in February 2017. In dollar terms the price decreased by 7%.

It was reported that production of pepper in Indonesia for 2017 crop season would be lower from last year. This is anticipated due to prolonged wet weather occurred in most pepper growing areas during the year. Heavy rains in Lampung and Bangka occurred in early this year has resulted in a lot of pepper berries falls.

In 2016 export of pepper from Indonesia was 53,100 Mt, comprising of 32,100 Mt of black and 21,000 Mt of white pepper. As against export in 2015, total export in 2016 decreased by around 5,000 Mt (9%). Export of black pepper decreased by 15%; while for white pepper increased marginally by 4%. Main destination country for IndonesiaÔÇÖs pepper in the last two years was Viet Nam, absorbing more than 35% while the United States absorbed only 16%. In 2016, India also imported significant quantity accounted for around 6,500 Mt of pepper from Indonesia.

In Sarawak, local price of pepper were reported to have decreased by 9%. In the case of FOB price however it was relatively stable during the month. In China, white pepper price decreased by 3%.

Black Pepper prices prevailed in local markets are shown in Table 3 and FOB prices in Table 4, while for white Pepper are in Table 5 (local) and FOB prices in Table 6.

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

Table 4: FOB Prices of Black Pepper in USD per MT

White pepper prices prevailing in local markets are shown in Table 5 and FOB prices in Table 6.

Table 5: Local Prices of White Pepper in USD per MT

Table 6: FOB Price of White Pepper in USD per MT