Monthly Publication

During May 2017, the Pepper Price Index decreased by 10.80 points for black pepper and 8.06 points for white pepper (Table 1). The composite price of black pepper decreased 13.7% to US$ 5,054 per Mt from US$ 5,857 in April 2017, while that of white pepper decreased by 10% from US$ 8,327 per Mt in April 2017 to US$ 7,493 in May 2017 (Table 2). The significant decrease was mainly influenced by the decrease of FOB price in Viet Nam, the largest pepper exporting country. Prices at other producing countries were reported to have also decreased at lower scale.

Table 1. IPC Price Index in US$/Mt (Base Year: Average 2011 - 2015)


Note: The price index is calculated based on price developments during 2011-2015

The market of pepper continued to weaken in May 2017, especially in Viet Nam and Indonesia. In Viet Nam the decrease in pepper prices is understandable, as the harvest in the source just completed and output of this year crop season is reportedly much better than last year. As reported earlier, production and export of pepper in Viet Nam has increased significantly in 2016 and this has resulted price decreased from VND 160,000 per Kg for black pepper at beginning of 2016 to VND 140,000 per Kg at the end of 2016 and from VND 240,000 per Kg for white pepper in January 2016 to VND 185,000 per Kg in December 2016. This year, the harvest is again getting better and price in Viet Nam decreased further to the level of VND 82,000 per Kg for black and VND 127,000 per Kg for white pepper in May end 2017.

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

In Indonesia, the market was very quiet in May 2017 but price of pepper decreased significantly by 19% for black and 16% for white pepper. Trading activity was reportedly very limited. In addition to the current low prevailing price level, a limited raw material at farms was also contributing to the quiet situation. New material from this year harvest is only expected to arrive in the market by July/August, but output of this year harvest is anticipated to be significantly lower from last year. Farmers expected to suffer from prices falling down while production decreased.

Decreased price in Indonesia was mainly affected by price changes in Viet Nam, the world's main supplier of pepper. While Viet Nam's pepper floods international market, other producing countries can not determine market direction. In addition to Viet Nam's dominance over world supply, Viet Nam's effect on pepper price movements in Indonesia is also due to Viet Nam being the main destination for Indonesia's pepper. In 2015 and 2016 around 36-39% of pepper from Indonesia was shipped to Viet Nam for re-export.

Table 3: Top ten markets of Indonesia's pepper exports

Pepper harvest in India was completed prior to Viet Nam which reportedly good output. However, with strong domestic demand, the harvested pepper is easily absorbed internally and pepper price remained at higher level. Some source however reported that the output is not as good as estimated earlier. In the last IPC Session in 2016 in Jakarta, it was reported that production of pepper in India is estimated at the level of 55,500 Mt in 2017 increased from 48,500 Mt in 2016.

Malaysia and Sri Lanka have started harvesting. Since production share of these two countries is considered to be relatively small, no significantly influence on pepper market can be expected. Production of pepper in Brazil is also anticipated to be slightly better from last year.

Overall, production and export of pepper this year is estimated to increase, particularly in Viet Nam. In Indonesia, production and export is estimated to significantly decrease. Considering the above situation, it is forecast that entering second semester the market will change and price is expected to be recovered.

Black Pepper prices prevailed in local markets are shown in Table 4 and FOB prices in Table 5, while for white pepper are in Table 6 and Table 7 respectively.

Table 4: Local Price of Black Pepper in US$ per MT

Table 5: FOB Prices of Black Pepper in US$ per Mt.


Table 6: Local Prices of White Pepper in US$ per Mt.


Table 7: FOB Price of White Pepper in US$ per Mt.