Monthly Publication

Pepper market showed a mixed response with a slight increasing trend in July 2017. In Viet Nam, Lampung and Bangka the price of pepper increased; while price in Kochi, Sarawak, Sri Lanka and China decreased.

Pepper Price Index in July has increased by 2.78 points for black pepper and 1.48 points for white pepper from 58.62 and 59.80 respectively in June 2017 (Table 1). The composite price of black pepper increased by 4.7% to US$ 4,567 per MT in July from US$ 4,360 in June 2017, while that of white pepper increased by 2.5% from US$ 6,188 per MT in June 2017 to US$ 6,341 in July 2017 (Table 2) respectively. Increased price in Viet Nam and Indonesia as the first and second largest pepper suppliers have influenced on the formation of composite price index in July 2017.

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

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

Entering second semester of 2017, the market has shown a mixed response with a slight increasing trend. In Lampung and Viet Nam black pepper has increased and so does white pepper in domestic market in Bangka. However, in India, Sarawak, Sri Lanka and China the price still showed a declining trend. Fortunately, exports from these four countries was small therefore the decrease in price was not significantly affected to global market direction.

In Viet Nam the market has slowed down and price has increased as producers reduced selling to anticipate further better price, following unclear prospect of next year's harvest. Export volume in July however still high at the level of 21,800 Mt as a fulfillment of commitments made earlier. The export accounted for about 70% of world export during the month.

At July end pepper price in HCMC was recorded at the level of VND 80,000 per Kg for black as against VND 77,500 at the end of June. On an average the price has increased by 2%. It is expected the price will increase further in the next few months.

Up to July 2017, Viet Nam has exported 147,300 tons of pepper valued at US$ 809 million, including 131,200 tons of black pepper and 16,100 tons of white pepper worth US$ 686 million and US$ 124 million for black and white pepper respectively. When compared to export of 120,700 Mt in the same period lat year, an increase of 22% was recorded. Interms of value however, it has decreased by 17% from US$ 978 million to US$ 809 million. Highest export achieved this year was in March 2017. Unit price of black pepper exported in 2017 dropped by US$ 2,480 to US$ 5,226 per Mt. For white pepper it has decreased by US$ 3,658 to US$ 7,675 per Mt over the same period last year.

The United States of America remained the crucial market for Viet Nam which imported 25,400 Mt of pepper, followed by Papua New Guinea, India and United Arab Emirates. It is interesting to note that Papua New Guinea emerged as one of the top ten importing countries and recorded at second position next to the United States. It may be understood that PNG becomes entry point for Vietnamese pepper entering market in Pacific and Oceania, including Eastern Indonesian Islands. The top ten country of destination for Vietnamese pepper is shown in the following table.

Table 3:
Export of pepper from Viet Nam by Country of destination in MT

In Lampung average local price of pepper increased by 10% in July 2017 and in Bangka increased by 7%. Although harvest in Lampung and Bangka was on the peak season, the price of pepper increased by IDR 5,000 per kg. At July end the price recorded at the level of IDR 50,000 per Kg for back and IDR 80,000 per Kg for white pepper. The increased price prevailed during the situation of harvesting season was clearly indicates that material resulted from this year harvest is significantly less. Some source in Lampung reported only 40% of normal harvest was resulted this year. The significant fall of black pepper production during the year was due to unfavorable weather condition in the last crop season. Too many rains has resulted flowers and fruits fall.

Similarly with the situation of white pepper in Bangka, pepper production in this island also decreased. Fortunately situation in other producing areas like in Kalimantan and Sulawesi are relatively better when compared to the situation in Lampung and Bangka. Overall however production of pepper in Indonesia decreased at the least by around 15%.

In Brazil, main harvest of pepper (in Para) is expected to begin in August- September and output is estimated to be better than last year. In Victoria the harvest has started earlier and new material from initial harvest has arrived in the market. Average price in July ranges from USD 3,600 to 3,700 per Mt (source: Royal Golden General Trading).

Supported by sufficient carry over stock from good harvest last year, export of pepper from Brazil in the first half of the year increased. Up to June 2017 Brazil has exported 21,000 Mt of pepper valued at US$ 125 million as against 16,000 Mt worth US$ 135 million in the same period last year. Major portion of pepper exported by Brazil was shipped to Germany, the United States and Spain, together absorbing more than 55% of Brazilian pepper. Out of the total export (21,000 Mt) a volume of 200 Mt was ground pepper.

In India the price has decreased by INR 20 per Kg from INR 490 at beginning of the month to INR 470 at the month's close. Production of pepper in India harvested in early this year was reported to have slightly better than last year. Out of this however mostly was absorbed internally.

In Kuching, Malaysia, the price of Sarawak pepper stood at the level of MYR 12 per Kg for black and MYR 22 per Kg for white pepper during the month under review, recording a marginal decrease of 3-5% from MYR 12.3 and MYR 22.8 per Kg in June 2017. It was reported that production of pepper in Malaysia for 2017 year crop season was at the level of 22,000 Mt, a marginal increase when compared to production level of 21,000 Mt in 2016.

In Sri Lanka pepper price decreased by LKR 155 to LKR 695 per Kg at the month's close. On an average price of pepper during July 2017 in Sri Lanka decreased by 24%. This may be due to main harvest of pepper in Sri Lanka has started. It is estimated that production of pepper in Sri Lanka would be better this year. Last year Sri Lanka harvested 19,000 Mt of pepper and this year a volume of 27,000 Mt is expected to be realized. Major portion of pepper harvested in Sri Lanka is shipped to India.

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

Table 4: Local Price of Black Pepper in USD per MT


Table 5: FOB Prices of Black Pepper in USD per MT

Table 6: Local Prices of White Pepper in USD per MT

Table 7: FOB Price of White Pepper in USD per MT