Monthly Publication

During May 2015, the Pepper Price Index decreased by 2.72 points for black Pepper and 4.06 points for white Pepper (Table 1). The composite price of black Pepper decreased marginally by 1% to US$ 8,885 per Mt from US$ 8,964 in April 2014, while that of white Pepper decreased by 1.4% from US$ 12,830 per Mt in April 2015 to US$ 12,657 in May 2015 (Table2). The decrease was influenced by the decrease of FOB price in Vietnam, the largest pepper exporting countries; while prices at other producing countries remained steady.

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

Pepper market situation at most producing countries was stable during May 2015, despite pepper harvest in Vietnam got completed. With the completion of pepper harvest in Vietnam, buyers expected to receive lower price. Supported by good holding capacity from high price realized last year, farmers in Vietnam were not interested to release their material at reduced price. This situation resulted in market activity to somewhat weaker.

Local price of black Pepper in Vietnam remained high, even increased from VND 179,000 per Kg at the beginning of the month to VND 183,000 per Kg at the monthÔÇÖs close. FOB price of black pepper however, stood at the level of US$ 8,750 per Mt, a marginal decrease when compared to US$ 9,050 per MT of FOB price of Vietnamese black Pepper in April 2015. In the case of white Pepper, price decreased both in local market as well as FOB price.

It was noticed that around one third of world Pepper production is produced by Vietnam. This year, Pepper harvest in Vietnam has completed and the output is reported slightly lower than last yearÔÇÖ crop. The Vietnam, being the largest producer and exporter of pepper, by and large influenced market situation in other producing countries as well.

Pepper harvest in India has been also completed prior to Vietnam, with reportedly good output. However, with strong domestic demand, the harvested Pepper is easily absorbed internally and Pepper price remained stood at higher side. Some source reported that the output is not as good as estimated earlier. It was reported in the last IPC Session held in HCMC Vietnam, that production of Pepper in India is estimated at the level of 70,000 Mt in 2015 increased from 37,000 Mt in 2014. Although production increased this year, export of Pepper from India did not indicate a significant improvement. In 2014-15 export of Pepper from Cochin increased marginally from 15,979 Mt in 2013-14 to 16,204 Mt in 2014-15.

Malaysia and Sri Lanka has started up with the harvesting. Since production share of these two countries is considered to be relatively small, production from these countries is not significantly influencing the market. Production of Pepper in Brazil is also anticipated lower compared to last year.

The harvest in Indonesia is expected to begin in July. Good out-put is expected to be realized this year. In Lampung, the market continued to be quiet during the month as stock at farm level is negligible. Supported by suitable climatic condition, production of black pepper in Lampung is estimated to be good this year.

In Bangka the market was also quiet, while new material from this year crop is expected to arrive in the market by August. Production of white Pepper in Bangka is estimated to be better. East Kalimantan and Sulawesi also produces white Pepper. The material however mostly traded locally for domestic consumption.

Overall, production and export of Pepper this year is estimated to increase, particularly in India and Indonesia. In Vietnam however, production and export is estimated to slightly decrease. Considering the above situation and supported by strong overseas demand, price decrease prevailed in Vietnam during the month is expected not to be continuing.

Black Pepper prices prevailed in local markets are shown in table 3 and FOB prices in Table 4, while for white Pepper are in table 5 (local) and
table 6 (FOB).

Table 3: Local Price of Black Pepper in US$ per MT

Table 4: FOB Prices of Black Pepper in US$ per MT

Table 5: Local Prices of White Pepper in US$ per MT

Table 6: FOB Price of White Pepper in US$ per MT