Monthly Publication

During May 2013, the Pepper Price Index decreased by 2.44 points for black pepper and 1.05 points for white pepper (Table 1). The composite price of black pepper decreased by 1.1% to USD 6,362 per MT from USD 6,432 in April 2013, while that of white pepper increased by 0.5% from USD 9,045 per MT in April 2013 to USD 9,000 in May 2013 (Table2).

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 in most of the producing countries was slower during May 2012, with the exception of Vietnam. With the completion of pepper harvest in Vietnam, buyers expected to have a lower price. Due to good holding capacity because of higher price realized last year, farmers in Vietnam were not interested to release their material at reduced price. This situation resulted market activity slightly different.

It was noticed that around one third of the world pepper production is produced by Vietnam. This year pepper harvest in Vietnam has completed and the output is reportedly slightly lower from the last year- crop. Being the largest producer and exporter of pepper, by and large Vietnam has influenced the market situation in other producing countries as well. Although stocks at other sources were limited and production of pepper is not promising, pepper prices prevailed during the month was averagely lower by 0.5 %. Price decline in some producing countries was likely influenced by speculators, spreading rumors of higher supply this year.

Pepper harvest in India has also completed earlier, with a lower out-put compaired to what was expected. Malaysia and Sri Lanka has started picking. Since production share of these two countries is considered to be relatively small, production from these countries is not going to influence the market significantly. Production of pepper in Brazil is also anticipated lower from last year. In Espirito Santo area, the expected May crop was not available and will be delayed by July/august; while in the northern Para, the harvest is expected from August.

The harvest in Indonesia is expected to begin in June-end/July with the out-put not as good as last year. In Lampung, the market continued to be quiet during the month as stock at farm level is negligible. Production of black pepper in Lampung is estimated to be significantly lower this year, due to lack of maintenance and un-favorable weather this year. Limited good planting material has made conversion of senile pepper area.

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

During January - May 2013, export of pepper from producing countries is estimated to be lower. Supported by sufficient carry over stock from previous year, export of pepper from Vietnam during the first five month is estimated to have crossed 60,000 mt, which is more or less same as the export performance achieved in the first five month last year. Export from India and Indonesia decreased, while from Brazil and Sarawak is estimated to be more or less at the same level of last year corresponding period-s export.

Overall, production and export of pepper this year is estimated to be lower from last year. Considering the above situation, price decrease prevailed during the month is expected to be not 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 USD per MT

Table 4: FOB Prices of Black Pepper in USD per MT

Table 5: Local Prices of White Pepper in USD per MT

Table 6: FOB Price of White Pepper in USD per MT