Monthly Publication

In September 2018 pepper market at sources showed a mixed response and relatively quiet. Active trading was taken place in Brazil in view of the harvest in Para State was on the up swing trend. Some activity was also reported in Vietnam following remained good harvest this year. Domestic price of black pepper in Lampung, Bangka and Sarawak decreased, while in Kochi and Sri Lanka increased. In Vietnam the prices were relatively stable. White pepper at all origins was reported to have fallen in September 2018.

Pepper price index in September was relatively stable with a slight fall for white pepper by nearly one point. (Table 1). The composite price of black pepper was relatively stable at around US$ 2,730 per Mt and composite price of white pepper decreased marginally by 1.7% from US$ 4,170 per Mt in August 2018 to US$ 4,100 in September 2018 (Table 2).

In September 2018, the market watched on the development of pepper harvest in Para state, Brazil which is anticipated to remain good as a result of massive area expansion in the past years. In 2017 total production of pepper in Brazil was reportedly at the level of 65,000 Mt. Out of this a volume of 59,500 Mt of pepper valued at US$ 274.4 million was exported from Brazil. The export increased by 91% in quantity and in value increased by 11%.

In 2018 production of pepper in Brazil is estimated to remain good at around 72,000 Mt following significant increase of production in Espirito Santo in early this year. This was reflected in good export performance achieved in the first semester at the volume of 31,100 MT as against 21,000 Mt in the same period last year, registering an increase of 48%. In view of continuous price decrease, export in the second semester is estimated to be not as high as in the first semester. Up to August 2018 total export of pepper from Brazil was 33,400 Mt as against 29,100 Mt in the same period last year.

In Vietnam, the market was not so brisk during the month under review, as major portion of this year harvest has sold out. Limited row materials were available at producers and local traders. But they were not interested to release at lower price. During September local price of pepper in Viet Nam was on average at the level of VND 50,000 and VND 82,500 per Kg for black and white pepper respectively. Black pepper increased by VND 1,000 per Kg, but for white pepper decreased by VND 1,000 per Kg. from the price prevailed in August 2018. FOB price of Vietnamese black remained stable at the level of US$ 2,460 per Mt for 550g/l. FOB price of white pepper in September decreased marginally by US$ 100 per Mt from US$ 3,950 in August 2018.

Up to August 2018, Vietnam has exported 177,000 Mt of pepper including 158,000 Mt of black and 19,000 Mt of white pepper, valued at US$ 590 million. When compared with the export in the same period last year, the export increased by 5.56%, but in terms of value decreased by 34.6%. China was the most impressive growth market for pepper. During January - August 2018 China has imported 26,000 Mt, showing a significant increase of 17,000 Mt from only 9,000 Mt in the same period last year. The United States of America continued to be the main market with imports reached 32,000 Mt, increased 3,000 Mt. Export to India, the other important market also increased by 4,00 Mt.

In Lampung, the market was reported quiet. Low prevailing price and low output from recent harvest was the main reason for the situation, farmers and local traders hold on limited material onto stock, expecting to have better price. As reported earlier, production of black pepper in Lampung decreased significantly this year. During September local price of pepper in Lampung and Bangka was relatively stable. In Dollar terms however the price decreased marginally, due to weakening of local currency against US Dollar. During January - August 2018, Indonesia has exported 28,000 Mt of pepper, a marginal increase of US$ 1,000 from US$ 27,000 Mt in the same period last year, mainly due to increased export of white pepper. Export of black pepper however decreases year by year, due to continuous production decrease in Lampung. Good export in the first half of the year was supported by sufficient stocks carried from previous year. In the second half of the year the export might be not as good as last year.

In respect of white pepper in Bangka, the main source of white pepper in Indonesia, production in this origin is estimated to be more or less same as last year. Other than Bangka, other province like Kalimantan and Sulawesi also produce white pepper. Production of pepper from these regions is reported to increase this year and portion of white pepper from this region traded internationally increased year by year. It was reported, white pepper from Sulawesi branded as "Soroako white pepper" has also traded in USA.

In Kochi, India, local price of Malabar black increased by INR 18 per Kg from INR 362 per Kg in August to INR 380 per Kg in September. In dollar terms, the local price increased by 2%. In the case of export price, Fob price of Malabar Garbled increased marginally by 1%. Production of pepper in India harvested in early this year is reported to have better. However, due to strong internal demand and reduction of import, export of pepper from India is estimated to decrease this year as indicated by export performance achieved during the first three quarters this year. It was reported that India exported 12,000 Mt of pepper as against 14,000 Mt in the same period last year.

In Sri Lanka, price increased in September. This may be influenced by significant decrease of production realized this year from 30,000 Mt in 2017 to 19,000 Mt his year. The situation was reflected in significant decrease in the volume of pepper exported this year.

In Sarawak, price of pepper showed a significant fall in September 2018. During the month local price of Sarawak black pepper decreased by 15% and 6% for white pepper from MYR 9.1 and 15.5 in August to MYR 7.8 and MYR 14.6 per Kg in September. Production of pepper in Sarawak is estimated to be more or less same as last year and in view of low prevailing price this year, export of pepper this year is estimated to remain same even lower from last year.

In 2018 world production of pepper is estimated to remain high particularly contributed by the increased production in Brazil and India. Under this situation price of pepper in near future is estimated to be stable at current level or fluctuate at narrow range.

Black pepper prices prevailed in the local markets are shown in Table 3 and FOB prices in Table 4; while for white pepper are shown in table 5 and 6.