Monthly Publication

During the last session in Colombo, pepper production in 2013 was projected at 314,000 mt. Since the pepper harvest in all IPC member countries except Brazil is almost over and taking into consideration of the current situation, an exercise of market situation in 2013 is made. Production of pepper in 2013 is re-estimated at 345,000 mt as against 352,000 mt in 2012.

The estimated production of pepper in Indonesia and Vietnam decreased by 10 - 14,000 mt, while in India the production is estimated to have increased by 12,000 mt. Marginal increase is estimated to take place in Malaysia, Sri Lanka and Brazil. Although this year estimated production is lower, cumulative export from IPC member countries up to August 2013 is estimated to have reached 168,000 mt, as against 158,000 in the corresponding period of last year. Prices prevailed during this year is also remain high. The higher export with high price confirms the continuation of the strong overseas demand.

During the last two years, pepper prices fluctuated at narrow range and almost flat in high prevailing price level, as shown in figure 2. This year prices have experienced a marginal decrease in May/June, but entering the second half of the year the price has again moved up.

In August 2013 the price has increased further. Price index of pepper during the month has increased by 4.96 and 0.86 points for black and white pepper respectively. (Table1). The composite price of black pepper increased by 2.34% to USD 6,424 per mt from USD 6,281 in July 2013, while that of white pepper price increased by 0.4% from USD 9,051 per mt in July 2013 to USD 9,087 in August 2013. (Table2).

Table 1. IPC Price Index in US$/MT (Base Year: Average 2006 - 2010)

Note: The price index is calculated based on price developments during 2006-2010
Table 2: Composite Price of Black and White Pepper in US$/MT

In August 2013 the market was more dynamic, particularly in the second half of the month. Due to availability of material from recent crop, Lampung black has lead the market during the month. Clear picture on the global short supply has again pushed the price up. The strengthening of US dollar against local currencies in most of the producing countries occurred during the month has also contributed in influencing market/price development.

In Lampung the market was active and firm. Pepper harvest has been completed in August with significantly lower output. Due to very high labor cost, farmers harvested pepper in one time, even though some spikes are not fully matured. Hence more light berries from this year harvest are anticipated. In Bangka, the harvest has also completed in August. Although material from recent harvest has arrived in the market, prices in local market have experienced a significant increase.

In Lampung, black pepper price increased significantly by IDR 11,500 per kg from IDR 56,000 at the beginning of August 2013 to IDR 67,500 at the month-s close. In dollar terms the average price of black pepper in August increased by 7% from the average price in the previous- month.

Unlike the situation in Lampung, production of pepper in Bangka was slightly better from last year harvest; but price prevailed during August is also up. During August white pepper price in Bangka has increased to IDR 92,500 per kg from IDR 83,000.

During August 2013, Indonesia is estimated to have exported 7,000 mt of pepper (black and white). During January to August 2013 around 22,700 mt (13,500 mt of black and 9,200 mt of white pepper) have been exported from Indonesia, as against 30,100 mt in the same period last year.

In Vietnam, the market was calm and prices were relatively stable for black and slightly lower for white pepper. This was possible may be due to lack overseas demand. During the year, production of pepper in Vietnam is around 115,000 mt; while export of pepper during January - August is estimated to have reached 102,000 mt. This export volume is 20% higher when compared to total export of 85,000 mt achieved during the same period last year. Up to December 2013 total export of pepper from Vietnam is estimated to cross 115,000 mt targeted earlier. This is possible, since Vietnam also imported significant quantity of pepper, mainly from Indonesia.

Brazil has made use of the opportunity of good price prevailed during the period by releasing available stock to the market in view of new material from this year crop is expected to arrive soon. During August 2013, Brazil exported 1,508 mt valued at USD 9.8 million as against 2,623 mt worth USD 16.1 million achieved in August 2012. During January - August 2013, Brazil have exported 17,557 mt, an increase of 1,832 mt (12%) when compared to export in the same period of last year. In August black pepper price in Belem increased from BRL 13.15 per kg to BRL 13.80 at the month-s close. In the case of fob price, the price increased from USD 6,450 per mt to USD 6,630.

Black pepper price prevailed in growing areas in Sri Lanka increased significantly from LKR 640 per kg to LKR 690. In India, local price of Malabar black also increased from INR 392 per kg to INR 402. In Dollar terms however the price decreased from USD 6.44 to USD 6.03 per kg at the month-s close. In Malaysia, pepper prices were reportedly decreased during the month for black and white, both in local as well as fob price.

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

Table 3: Local Price of Black Pepper in USD per MT

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

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

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