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During the year 2013 the pepper market was considered to be hot, particularly at the second half of the year since the prices have again increased sharply to the highest in December 2013. Although production has increased in 2013, but given the fact of a very limited inventory at producing as well as consuming countries at beginning of 2013, the slight increased production in 2013 was absorbed in the local markets.

Based on the latest information received by the IPC, total export of pepper from producing countries in 2013 excluding the raw materials used for manufacturing pepper oil and oleoresin was around 252,000 MT valued at around USD 1.78 billion, as against 260,000 MT worth USD 1.85 billion achieved in 2012. Vietnam received the major portion of USD 830 million which is around 47% in the total earnings of 2013 followed by Indonesia, Brazil and India.

Table 1. Export of Pepper in quantity and value in 2012 and 2013

Note: Exports for 2013 are provisional
Increased production and decreased export.

The IPC Session held in Kuching, Sarawak, Malaysia between 11 and 13 November 2013 reviewed the world pepper market scenario for the years from 2012 to 2014 based on the provisional figures reported by producing countries.

Total production of pepper in 2013 was estimated 340,000 mt as against 329,000 mt reported for 2012. Although significant fall of production was recorded in Indonesia, production increase in India and Sri Lanka has compensated the decrease. Significant increase in India, however did not have much impact in the export, because almost all pepper produced was absorbed by the internal market. Even export of India in 2013 was reportedly lower than the previous year. Production of pepper in Vietnam was more or less similar with the production in 2012.

During 2013, total export of pepper was around 252,000 mt, decreased from 260,000 mt achieved in 2012. The decrease was mainly due to significant fall of export from Indonesia. Exports from Sri Lanka, Vietnam, Malaysia and Brazil have increased.

Prices

In the first half of 2013 pepper prices decreased mainly due to huge quantity of Vietnamese pepper entered the market. Witnessing the significant fall of pepper output in Indonesia, the price has increased to the highest in December 2013. During 2013, the IPC price index increased by 46.92 points for black and 32.61 points for white pepper and fluctuated in the range between 228.43 - 275.34 for black and 211.95 - 244.55 for white pepper. The highest price index achieved during 2013 was in December; while that the lowest took place in June.

Correspondingly, the composite price of black pepper increased to USD 7,936 per mt in December 2013, from USD 6,584 per mt in January 2013 The composite price for white pepper in December 2013 was USD 10,423 per mt, increased from USD 9,033 per mt in January 2013. The IPC price index and composite price of black and white pepper are shown in Table 2 and 3 respectively.

Table 2 IPC Price Index (Base Year : Average 2006 - 2010)

Table 3 Nominal Composite Price of Black and White Pepper (USD/mt)

Note: Composite prices are calculated using the monthly export and FOB price of the top five pepper producing countries (Vietnam, Brazil, India, Indonesia and Malaysia)

Prospects:

The pepper market situation in 2014 will depend largely on developments in production during the year. In the short term, the market may be affected during the peak harvest period in Vietnam. Although production of pepper in Indonesia is estimated to increase, global pepper production in 2014 would be slightly lower by around 5,000 MT than that of 2013, mainly due to significant fall of estimated production in India. Under this situation, price decrease may be occurred temporarily during harvesting season in Vietnam.