Monthly Publication

PRICE HISTORY

Price index of pepper for the 6th month of 2020 was reported significantly positive. Recording an increase by 18.6% as compared with the previous month, price index of black pepper for June was reported at 36.94 points which was the highest ever recorded since 2019. Following the same trend, price index of white pepper in the month of June was reported at 36.44 points (Table 1), recording an increase by 12.6% as opposed to the previous month. However, when compared with June 2019 the price index of white pepper was reportedly stable.

With a rather significant demand but lack of supply, the 6th month of 2020 showed an increasing trend of the composite of price of pepper. The composite price of black pepper recorded a major increased by USD 431 per Mt as compared with the May and was reported at USD 2,747 per Mt. Similarly, composite price of white pepper was reported with a spike of USD 421 per Mt as opposed to the previous month at USD 3,771 per Mt (Table 2).

Pepper prices in the 6th month of 2020, showed a mixed response with a rather positive outlook as only Malaysia and Sri Lanka origin were reported with a decrease. The farm gate price of black pepper in India was reported with an increase of 2% as opposed to May, averaging at USD 4,151 per Mt (Table 3). In the local currency farm gate price of India black pepper was traded at an average of INR 313 per Kg which was an increased from INR 307 per Kg in the previous month. The increase of India black pepper could be contributed to the continuous increase demand as compared to the previous month.

The price of black pepper in Indonesia (Lampung black pepper) was reported with a significant increase of 25% as opposed to the previous month, averaging at USD 2,124 per Mt. The increase of Indonesia black pepper could be contributed to the increase of demand while the stock was limited and was supported by the strengthening of Indonesian Rupiah against the US Dollar (IDR 14,196 for USD 1) or an appreciation by 5% when compared to May. In local currency, the price of Indonesia black pepper increased to an average of IDR 30,524 per Kg from IDR 25,500 per Kg in May.

As Malaysia entered the mid of the harvest season, the farm gate price of Malaysia's black pepper for the 6th month of 2020 was reported with an increase of 6% when compared to the previous month averaging at USD 1,808 per Mt. The increase of Malaysia black pepper could be contributed to the increase of demand as well as the strengthening of Malaysia's local currency against the US Dollar (MYR 4.28 for USD 1) or an appreciation by 1% when compared to May. In local currency, the price of Malaysia black pepper increased to an average of MYR 7,782 per Kg from MYR 7,403 per Kg.

Furthermore, farm gate price of black pepper in Viet Nam was reported with a significant increased by 19% as compared to the previous month, averaging at USD 2,133 per Mt. The increase of Viet Nam price was also contributed to the significant increase of demand. In local currency, the price of Viet Nam black pepper increased to an average of VND 50,250 per Kg from VND 43,150 per Kg in May.

Following the mid harvest season, the farm gate price of Sri Lankan black pepper was reported with a decrease of 1% as opposed to May and was reported at an average of USD 2,691 per Mt. Sri Lanka black pepper in local currency decreased to an average of LKR 498.65 per Kg from LKR 514.58 per Kg in May.

FOB price of black pepper for June 2020 followed the farm gate price positive trend with only Malaysia origin was reported with a decrease. India traded its Malabar black pepper internationally with the same increase by 2% when compared to May, averaging at USD 4,415 per Mt (Table 4). Furthermore, the FOB price of Indonesian black pepper was reported with significant increase of 24% as opposed to May, averaging at USD 2,592 per Mt. Contrary with other origins, FOB price of Malaysian black pepper was reported with a decrease of 5% as compared to previous month at an average of USD 3,514 per Mt. FOB price of Viet Nam black pepper 500 g/l and 550 g/l were reported with an increase of 10% and 12% respectively as compared to the previous month averaging at USD 2,492 per Mt and USD 2,571 per Mt respectively.

Farm gate prices of white pepper in June 2020 showed a rather positive outlook (Table 5) as only China origin was reported stable. Indonesia Muntok white pepper was reported with a significant increase of 9% as compared to the previous month at an average of USD 3,155 per Mt. In local currency, the price of Muntok white pepper was reported at an average of IDR 44,952 per Kg, an increase of IDR 1,577 per Kg when compared with the previous month. Similar to black pepper, the increase of Indonesia white pepper could be contributed to the increase of demand while the stock was limited as well as the strengthening of Indonesian Rupiah against the US Dollar. Farm gate price of Malaysia white pepper was reported with an increase of 4% as opposed to May at an average of USD 3,181 per Mt. Furthermore, Viet Nam white pepper was reported with a significant increase of 13% when compared to the previous month, averaging at USD 2,971 per Mt. China white pepper was reported stable with a marginal increase and was traded at an average of USD 4,204 per Mt locally.

FOB price of white pepper also showed a mix response with a rather positive outlook as only Malaysia origin was reported with a decrease. Continuing the trend of the farm gate price, FOB price of Indonesia white pepper for June 2020 was reported with a significant increase of 9% when compared to May, averaging at USD 3,747 per Mt. Furthermore, FOB price of Malaysia white pepper was reported with 5% deficit as compared to the previous month averaging at USD 5,025 per Mt. FOB price of Viet Nam white pepper was reported with a significant increase of 18% when compared to the previous month at an average of USD 3,805 per Mt. China white pepper was reported stable and was traded at an average of USD 4,404 per Mt internationally (Table 6).

Entering the 5th month of global pandemic, FOB pepper price for June 2019 and June 2020 fluctuated with a rather positive outlook. India black pepper in June 2020 was reported with 16% deficit as compared to June 2019 at an average of USD 4,410 per Mt. Furthermore, Indonesia black pepper was reported with an increase of 3% as compared to June 2019 averaging at USD 2,621 per Mt whilst Indonesia white pepper was reported with 9% deficit as compared with June 2019 averaging at USD 3,760 per Mt. Malaysia black and white peppers for June 2020 were reported with an increase of 2% and 1% respectively as compared to June 2019 at an average of USD 3,501 per Mt and USD 5,004 per Mt respectively. Furthermore, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper were reported with an increase of 7%, 7% and 11% respectively as opposed to the same period in 2019 at an average of USD 2,482 per Mt, USD 2,561 per Mt and USD 3,813 per Mt respectively. China white pepper was reported with 11% deficit when compared to June 2019 and was traded at an average of USD 4,410 per Mt (Table 7).

HIGHLIGHT ON MALAYSIA
Production and Productivity

Malaysia is one of pepper producer in the world. As of today, Malaysia became the fifth largest pepper producing country in the world after Viet Nam, Brazil, Indonesia and India. Malaysia produces black and white pepper, the state of Sarawak is the main pepper producing region in Malaysia, contributing to more than 98% of the country's annual production. Furthermore, the other producing areas are Sabah and Peninsular Malaysia.

From 2009-2011 the area under pepper cultivation in Malaysia had shown an increasing trend. An increase of 10% in term of area of pepper cultivation was reported when comparing 2009 and 2011. IN 2012, the area under pepper cultivation in Malaysia shown a decreasing trend. A drop of 1% in term of area of pepper cultivation was reported when compared to 2011. As from 2013, the area of pepper cultivation in Malaysia had continuously increased to 2019. In 2019, Malaysia planted pepper on 17,477 Ha of area, recording a 28% increase over the course of 11 years (Table 8).

In addition, the area of pepper cultivation for 2020 was projected to increase by 3% to 17,959 Ha. The increase of the area of pepper plantation would be contributed to the Malaysia government through Malaysian Pepper Board sought to expand the cultivation area and boost the production capacity while also adding more value-added product that could benefit 30,000 pepper smallholders in Malaysia.

Pepper production of Malaysia had fluctuated since 2009 with a rather positive trend. Pepper production of Malaysia was reported to have recorded an increase of 9% in the past 11 years as it recorded to have produced a total of 24,000 Mt in 2019 which comprised of 17,872 Mt of black pepper and 6,128 Mt of white pepper. The highest production of Malaysian pepper in the past 11 years was reported in 2018 with 31,073 Mt which comprised of 17,437 Mt of black pepper and 7,119 Mt of white pepper. The high production in 2018 could be contributed to the price of Malaysian pepper reached its peak in late 2015. Thus, motivated farmers to open new area and plant more during that period. In addition, the production of Malaysian pepper for 2020 was projected stable as result of the global pandemic as well as unfavorable price which lower than cost of production.

Since 2009-2019, Pepper productivity in Malaysia fluctuated with a slight negative trend. In 2019, pepper productivity in Malaysia was reported to have decreased by 15% when compared with 2009 to 1,373 Kg per Ha. In 2020, the pepper productivity was projected with a decrease of 3% as compared with 2019 to 1,336 Kg per Ha. In the past 12 years, the highest pepper productivity in Malaysia was reported in 2018 with 1,782 Kg per Ha whilst the lowest occurred in 2013 with 1,267 Kg per Ha.

Pepper Export from Malaysia

As one of pepper producing country, Malaysia had managed to steadily achieve an average export around 12,000 Mt of pepper annually. Since 2009 until 2019 there had been a 25% decrease in number of exports from Malaysia. Furthermore, as of 2009 until 2019 pepper export from Malaysia was mainly dominated with black pepper with an average of 82% of the total export figures. Furthermore, the highest pepper export occurred in 2011 with 14,200 Mt whilst the lowest export occurred in 2019 with 9,860 Mt (Table 9). In 2019, pepper export from Malaysia was reported at 9,860 Mt which comprised of 8,085 Mt of black pepper and 1,775 Mt of white pepper, thus, recording a decrease of 15% as opposed to the previous year.

As of May 2020, the total export of pepper from Malaysia was reported at 2,940 Mt, recording an average of the monthly pepper export at 588 Mt. When compared with the same period in 2019, pepper export of Malaysia in as of May 2020 was reported with a significant drop by 16%.

The quantity of pepper exports from Malaysia had reportedly fluctuated from January 2019 up to May 2020. The total export by Malaysia in 2019 was reported at 9,860 Mt with total value as high as USD 35.2 Million. The average pepper export from Malaysia in 2019 was reported to be 822 Mt per month with the highest reported in August which reached 1,131 Mt whilst the lowest was reported in January with 541 Mt (Table 10). The total pepper export from Malaysia as of May 2020 was reported to be 2,940 Mt with total value of USD 10,3 Million.

Pepper from Malaysia is exported to various countries around the world, mostly in Asian countries (Table 11). In 2019, the top 10 country of destinations for Malaysia pepper were reported to be Japan with 3,599 Mt (Contributed to 36% of the total Malaysia pepper export in 2019), China with 1,991 Mt (20%), Taiwan with 1,172 Mt (12%), Viet Nam with 820 Mt (8%), South Korea with 635 Mt (6%), Singapore with 564 Mt (6%), India with 224 Mt (2%), Philippines with 189 Mt (2%), Thailand with 157 Mt (2%) and Spain with 80 Mt (1%).

Pepper Price

FOB price of Malaysia pepper had fluctuated with rather positive trend. In 2018, the average FOB price for Malaysia black pepper was reported at USD 3,299 per Mt with the highest price recorded in February with USD 4,194 per Mt whilst the lowest price was reported in October with USD 2,530 per Mt. Furthermore, the average FOB price for Malaysia white pepper was reported at USD 4,939 per Mt with the highest prices recorded in February with USD 5,930 per Mt whilst the lowest price was reported in October with USD 4,095 per Mt.

In 2019, the average FOB price of Malaysia black and white pepper were reported with an increase of 3% and 0.4% respectively when compared to the previous year. The average FOB price of Malaysia black pepper was reported at USD 3,389 per Mt with the highest price recorded during July-December with USD 3,685 per Mt whilst the lowest price occurred in January with USD 3,004 per Mt. Furthermore, the average FOB price of Malaysia white pepper was reported at USD 4,958 per Mt with the highest price recorded during July- December with USD 5,275 per Mt whilst the lowest occurred in May with USD 4,550 per Mt.

In the course of January until June 2020, the average FOB price of Malaysia black and white pepper were reported at USD 3,654 per Mt and USD 5,230 per Mt respectively, thus recording an average increase of 18% and 13% respectively as compared to the same period in 2019 (Table 12).

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.