Monthly Publication

PRICE HISTORY

Corona virus which has affected over 200 countries worldwide and resulted to over 150,000 casualties (as of 19 April), had caused most businesses to slow down or even standstill. The third month of 2020 pepper price index was reported negatively with price index of black pepper slightly losing 1.8% as compared to the previous month at 29.19 point. Moreover, when compared with the same period in 2019 the price index of black pepper was reported with a higher decrease by 10%. A much higher margin of decrease was reported for the price index of white pepper for the month of March as it recorded a 3.6% loss as compared to the previous month and was reported at 30.93 point (Table 1). In addition, the price index of white pepper was reported with a high 15% loss when compared with the same period in 2019.

The composite price for both black and white pepper was reported negatively for the month of March. Composite price of black pepper recorded a loss of USD 40 per Mt as compared to the previous month and was reported at USD 2,171 per Mt. Furthermore, composite price of white pepper was reported with a loss of USD 120 per Mt at USD 3,200 per Mt.

Pepper prices in the 3rd month of 2020, showed a mixed response with only Viet Nam origin recorded an increased. The farm gate price of black pepper in India was reported with a decrease by 6% as opposed to February, averaging at USD 4,123 per Mt (Table 3). In the local currency farm gate price of India black pepper was traded at an average of INR 307 per Kg dropping from INR 313 per Kg in the previous month. The decrease of India black pepper could be contributed to the decrease of pepper price in local currency as well as the weakening of India's local currency against the US Dollar (INR 74.35 for USD 1) or depreciation by 4% when compared with the February.

The price of black pepper in Indonesia (Lampung black pepper) was reported with a significant decrease by 10% as opposed to the previous month, averaging atUSD 1,566 per Mt. The decrease of Indonesia black pepper could be contributed to the sluggish demand as most market and business in Indonesia closed down due to the implementation of social distancing to ward off the spread of Corona Virus and the weakening of Indonesia's local currency against the US Dollar (IDR 15,195 for USD 1) or depreciation by 10% when compared to February. In local currency, the price of Indonesia black pepper decreased to an average of IDR 23,667 per Kg from IDR 24,000 per Kg in February.

In March 2020, the farm gate price of Malaysia's black pepper was reported with a decrease by 4% as compared to the previous month, averaging at USD 1,725 per Mt. The decrease of Malaysia black pepper could be contributed to the weakening of Malaysia's local currency against the US Dollar (MYR 4.30 for USD 1) or depreciation by 3% when compared with the February. In local currency, the price of Malaysia black pepper decreased to an average of MYR 7,403 per Kg from MYR 7,490 per Kg in February.

Furthermore, farm gate price of black pepper in Viet Nam was reported stable averaging at USD 1,618 per Mt. In local currency, the price of Viet Nam black pepper slightly decreased to an average of VND 38,477 per Kg from VND 38,500 per Kg in February.
Sri Lanka black pepper was reported with 2% deficit as opposed to February and was reported at an average of USD 2,864 per Mt. The decrease of Sri Lanka black pepper could be contributed to the weakening of Sri Lanka's local currency against the US Dollar (LKR 184.97 for USD 1) or depreciation by 2% when compared with the February. In local currency, the price of Sri Lanka black pepper decreased to an average of LKR 527.82 per Kg from LKR 531.92 per Kg in February.

FOB price of black pepper for March 2020 also showed a mixed response with only Viet Nam origin was reported with an increase. India was reported with the same 6% decrease when compared to February, averaging at USD 4,392 per Mt (Table 4). Furthermore, the FOB price of black pepper in Indonesia was also reported with a significant decrease by 10% as opposed to February, averaging at USD 1,945 per Mt. FOB price of Malaysian black pepper was reported stable at an average of USD 3,685 per Mt. Contrary, FOB price of Viet Nam black pepper 500 g/l and 550 g/l were reported with an increase of 4% and 3% respectively as compared to the previous month at an average of USD 2,048 per Mt and USD 2,113 per Mt respectively.

Farm gate prices of white pepper in March 2020 showed a rather negative outlook (Table 5) as only Viet Nam origin was reported stable. Indonesia Muntok white pepper was reported with a significant decrease by 8% as compared to the previous month at an average of USD 2,867per Mt. In local currency, the price of Muntok white pepper was reported at an average of IDR 43,238 per Kg. Farm gate price of Malaysia white pepper was also reported with a decrease by 4% as opposed to February at an average of USD 3,096 per Mt. Furthermore, Viet Nam white pepper was reported stable averaging at USD 2,414 per Mt. China market started to resume after the last six weeks reported to be inactive due to the outbreak of Corona Virus and its white pepper was reported at an average of 4,198 per Mt locally.

FOB price of white pepper showed a rather stable outlook with only Indonesia origin was reported with a decrease. FOB price of Indonesia white pepper for March 2020 was reported with a significant decrease by 8% when compared to February, averaging at USD 3,412 per Mt. Furthermore, FOB price of Malaysia white pepper continued to be reported stable and unchanged. Whilst, FOB price of Viet Nam white pepper was also reported stable at an average of USD 3,063 per Mt. China traded its white pepper at an average of USD 4,398 per Mt internationally (Table 6).

HIGHLIGHT ON VIET NAM
Production and Productivity

Viet Nam known as the number one producer and exporter of pepper in the world with pepper cultivation areas in Central Highland (Gia Lai, Dak Lak and Dak Nong Provinces) and Southern East areas (Dong Nai, Binh Phuoc and Ba Ria - Vung Tau Provinces.

During 2009-2020 the area under pepper cultivation in Viet Nam had increased gradually. Between 2009-2017, area under pepper cultivation in Viet Nam saw an increase of 120% to a total of 110,000 Ha from 50,000 Ha in 2009. The area under pepper cultivation in Viet Nam decreased from 2017 to 2018 by 2% to a total of 107,392 Ha. In the course of 10 years between 2009-2018 total area under pepper cultivation in Viet Nam recorded an increase by 115% (Table 7). Furthermore, in 2019 the area under pepper cultivation in Viet Nam was estimated to decrease by 7% as compared to 2018 to around of 100,000 Ha.

Viet Nam production of pepper during 2009-2018 was reported fluctuating with a rather positive trend. In the course 10 years since 2009 pepper production in Viet Nam was reported to have recorded an increase of 86% as it recorded a total of 230,000 Mt in 2018 which comprised of 210,000 Mt of black pepper and 20,000 Mt of white pepper. The highest production of Viet Nam pepper in the course of 10 years between 2009-2018 was reported in 2018 with 230,000 Mt whilst the lowest production occurred in 2010 with 110,000 Mt. However, in the year 2019 production of Viet Nam pepper was estimated to increase by 22% when compared with 2018 to a total of 280,000 Mt which comprised of 257,000 Mt of black pepper and 23,000 Mt of white pepper. Furthermore, in 2020 Viet Nam pepper production was projected to decrease by 11% when compared to 2019 to a total of 250,000 Mt.The decrease of Viet Nam pepper production could be contributed to the unfavourable pepper price and weather, inappropriate farming technique as well as pest and disease which affecting pepper plantation in Viet Nam.

Pepper productivity in Viet Nam in the course of 12 years between 2009-2020 was reported to be fluctuated. During 2009-2020, the lowest pepper productivity in Viet Nam was reported in 2015 with 1,251 Kg per Ha while the highest productivity was reported in 2009 with 2,475 Kg per Ha. The lowest decrease of pepper productivity in Viet Nam was reported to occur in 2015 as it recorded a 28% loss when compared with the previous year. Whilst the highest increase of pepper productivity was reported in 2016 which recorded a 29% increase as opposed to the previous year. For the year 2019, Viet Nam pepper productivity was estimated with an increase of 31% to 2,800 Kg per Ha (Chart 1).

Pepper Export from Viet Nam

Besides known as the largest pepper producer in the world, Viet Nam is also known as the largest pepper exporter in the world. Since 2009 until 2019 there had been a significant increase of 113% or 152,498 Mt in the quantity of pepper export from Viet Nam which was mainly dominated with black pepper as it contributed to 85% of the total export figures (Table 8). The highest pepper export occurred in 2019 with 287,003 Mt whilst the lowest export occurred in 2010 with 116,842 Mt. In 2019, pepper export from Viet Nam was reported at 287,003 Mt, an increase of22% as opposed to the previous year. Furthermore, as of February 2020, pepper export from Viet Nam was reported at 40,916 Mt which comprised of 36,544 Mt of black pepper and 4,372 Mt of white pepper, thus, recording an increase of 11% as compared to the same period in 2019.

The quantity of pepper exports from Viet Nam had reportedly fluctuated in the last 14 months. The total export by Viet Nam in the past 14 months was reported at 327,919 Mt with total value as high as USD 815.2 Million. The average pepper export from Viet Namin 14 months was reported to be 23,423 Mt per month. The highest pepper export of Viet Nam occurred in May2019 which reached 38,318 Mt whilst the lowest wasreported in September 2019 with 14,231 Mt (Table 9). The high level of exports during May 19 correlated to thepeak of harvest season in Viet Nam.

Pepper from Viet Nam is exported to various countries in Asia, Europe, America and Africa (Table 10). During January 2019-February 2020, the top 10 country of destinations for Viet Nam pepper were reported to be China with 58,583 Mt (Contributed to 18% of the total pepper export during January 2019-February 2020), United States of America with 57,126 Mt (17%), India with 23,229 Mt (7%), Pakistan with 13,153 Mt (4%), United Arab Emirates with 12,374 Mt (4%), Germany with 12,324 Mt (4%), Netherlands with 8,692 Mt (3%), Egypt with 8,469 Mt (3%), Thailand with 8,279 Mt (3%) and Nepal with 8,075 Mt(2%).

Pepper Price

FOB price of Viet Nam pepper had fluctuated significantly in the past three years which could be attributed to the world supply of pepper significantly exceeding the global demand. In 2018, the average FOB price for Viet Nam black pepper 500 g/l was reported at USD 2,712 per Mt with the highest price recorded in January and February with USD 3,150 per Mt whilst the lowest price was reported in September with USD 2,408 per Mt. Whilst, the average FOB price for Viet Nam black pepper 550 g/l was reported at USD 2,881 per Mt with the highest prices recorded in January with USD 3,550 per Mt whilst the lowest price was reported in February with USD 2,530 per Mt. Furthermore, the average FOB price for Viet Nam white pepper was reported at USD 4,322 per Mt with the highest prices recorded in February with USD 5,090 per Mt whilst the lowest price was reported in October with USD 3,808 per Mt.

In 2019, the average FOB price of Viet Nam black pepper 500 g/l, 500 g/l and Viet Nam white pepper were reported with a decrease by 17%, 19% and 22% respectively when compared to the previous year. The average FOB price of Viet Nam black pepper 500 g/l was reported at USD 2,253 per Mt with the highest price recorded in January with USD 2,393 per Mt whilst the lowest price occurred in February with USD 2,148 per Mt. Whilst, the average FOB price of Viet Nam black pepper550 g/l was reported at USD 2,341 per Mt with the highest price recorded in January with USD 2,613 per Mt whilst the lowest price occurred in May with USD 2,232 per Mt. Furthermore, the average FOB price of Viet Nam white pepper was reported at USD 3,361 per Mt with the highest price recorded in January with USD 3,783 per Mt whilst the lowest occurred in August with USD 2,842 per Mt.

As of February 2020, the average FOB price of Viet Nam black pepper 500 g/l, 550 g/l and Viet white pepper was reported at USD 2,147 per Mt, USD 2,228 per Mt and USD 3,275 per Mt respectively, thus recording 5%, 8% and 10% deficit respectively as compared to the same period in 2019(Table 11).

Source:
- Brazil, Unofficial source (Coreimex, CSG Trade)
- India: AISEF, NCDEX, Indian Chamber of Commerce & Industry, Spices Board India
- Indonesia: Unofficial source
- Malaysia: Malaysian Pepper Board
- Sri Lanka: Department of Export Agriculture
- Viet Nam : Viet Nam Pepper Association, HCMC
- China: Hainan Pepper Association, China Spice Association
- Office of Agricultural Economics of Thailand
- A.A. SAYIA & Company
- International Trade Centre (ITC) - Geneva

Note: Some of the data in this publication are from the IPC database. The data are obtained from official reports and correspondence between the IPC and Sri Lanka and have been processed based on statistical norms that can be accounted for.