Monthly Publication

2012 - The Outstanding year

During the year 2012 the pepper market was very encouraging as global pepper production and export increased and prices prevailed during the year were relatively stable at a reasonably higher level. Based on the latest information received by the IPC, total export of pepper from producing countries in 2012 excluding the raw materials used for manufacturing pepper oil and oleoresin for export was around 261,200 MT valued at around USD 1.77 billion, as against 251,000 MT worth USD 1.53 billion achieved in 2011. Vietnam received the major portion of USD 792 million which is around 45% in the total earnings in 2012 followed by Indonesia, Brazil and India.

Increased Production and Export.

The IPC Session held in Colombo, Sri Lanka between 30th October and 2nd November 2012 reviewed the world pepper market scenario for the years from 2011 to 2013, based on the provisional figures reported by producing countries. These figures were also revised based on the latest development and information received from trade source and assessment made by IPC

During 2012, production of pepper was estimated around 335,000 MT (270,000 MT of black and 65,000 MT of white pepper), registering an increase of 6% from 315,000 MT (246,000 MT of black and 69,000 MT of white pepper) achieved in 2011 mainly due to substantial production increase in Indonesia and Sri Lanka. Export of pepper from producing countries was 261,200 MT (221,300 MT of black and 39,900 MT of white pepper), which is higher by 4% when compared to export of 251,000 MT recorded in 2011, mainly due to a record increase of exports from Indonesia and Sri Lanka..

Production and export of Indonesia and Sri Lanka recorded a significant increase, while Brazil, India and Vietnam experienced a decrease in production and export. Production in Malaysia increased marginally, but decreased in terms of export.

Production and export of black pepper increased by 9% and 6% respectively from 246,200 mt and 208,200 mt respectively in 2011 to 269,600 mt and 221,300 mt respectively in 2012; while production and export of white pepper decreased by 5% and 8% respectively.

Import and Consumption

Besides exports, producing countries such as India and Vietnam imported sizeable quantities of pepper both for their domestic consumption and value addition (like pepper oils and oleoresins and ground pepper) for re-exports. Indonesia, Malaysia, China and Brazil also imported a smaller quantity. During 2012 an estimate of around 43,700 mt of pepper were imported by producing countries, as against 38,500 mt in 2011, registering an increase of 14%. The increase in 2011 was mainly due to increased demand coupled with the short supply of certain quality of producing countries.

During 2012, India remains the major importer of pepper and imported around 16,300 mt in 2012, increased from 13,500 in 2011. Import of Vietnam also increased to around 15,000 mt from 10,000 mt in 2011. This was due to decrease in production of these two countries and increased production of Indonesia, the main source of pepper for import into Vietnam and India. During 2012, Indonesia supplied pepper to Vietnam at nearly 15,000 mt as against 4,500 mt in 2011

Domestic consumption includes pepper for grinding, extraction of oil and oleoresins, the requirements of other industries, households and food establishments. In 2012, domestic consumption of pepper among the producing countries is estimated at around 133,400 mt, which increased marginally from 127,000 mt in 2011

Although production and export of pepper from Vietnam decreased in 2012, the country remained the largest producer and exporter of pepper. According to the Customs- report, during 2012 Vietnam has exported 116,550 mt of pepper valued at USD 792 million, registering a decrease of 6% in quantity, but increased by 8% in value when compared to exports of 123,808 mt worth USD 732 million achieved in 2011. The United States, Germany and United Arab Emirates remained the main markets for Vietnam. Other important markets were Netherlands, India, Singapore and Egypt. Production of pepper in Vietnam decreased to 105,000 mt in 2012, which is lower by 5,000 mt.

Estimated production of pepper in Indonesia during 2012 was 75,000 mt, comprising 55,000 mt of black and 20,000 mt of white pepper, registering a substantial increase of 60% from 47,000 mt (30,000 mt of black and 17,000 mt of white pepper) reported in 2011. In the last 40th IPC Session, it was reported that in 2012, Indonesia is estimated to export around 53,000 mt. Central Statistics office reported that export of pepper during January - October 2012 was 51,000 mt (40,000mt of black and 11,000 mt of white) valued at USD 346 million. With this achievement, total export of pepper from Indonesia is estimated to touch the record high export performance achieved in 2000, i.e. 64,000 mt (51,000 mt of black and 13,000 mt of white pepper) valued at USD 431 million. Compared to the export of 36,500 mt, valued at USD 215 million in 2011, significant increase of 75% was recorded in quantity and 101% in value. With this achievement, Indonesia recorded the second largest pepper producer and exporter in 2012. The United States was the main destination, absorbing around 37% of pepper exported from Indonesia, followed by Vietnam (25%) and India (9%).

Production and export of pepper from Brazil has reported a decrease by 4% and 11% respectively in 2012. Production and export in 2012 were 33,500 mt and 29,100 mt as against 35,000 mt and 32,600 mt respectively reported in 2011. Export quantity decreased by 11%, while that of value decreased by 7% to USD 192 billion from 206 million earned in 2011. Out of the total exports around 2,000 mt was white pepper. Brazil also exported 28 mt of ground pepper, which is lower from 35 mt exported in 2011.

During 2012 export of pepper from Malaysia was 10,450 mt (8,440 mt of black and 2,010 mt of white) valued at USD 77 million as against 14,320 mt worth USD 93 million in 2011. Since the ruling prices were high in 2012 the stocking of pepper was limited. Considering reported domestic consumption at 9,500 mt and import of around 4,000 mt, the production of pepper in Malaysia during 2012 is estimated around 18,000 mt.

Production of pepper in India during 2012 decreased by 5.000 mt to 43,000 mt. Export from India has also decreased to around 17,800 mt, including export of ground and green pepper products valued at USD 122.5 million as against 23,750 mt worth USD 149 million achieved in 2011. The export recorded a decrease of twenty six percent in quantity and eighteen percent in value.

Significant increase in production and export took place in Sri Lanka from 13,000 mt and 5,100 mt respectively recorded during 2011 to 17,400 mt and 10,030 mt in 2012. Volume of production and exports increased by 34% and 98% respectively. In terms of export earning, the increase reached at 106% from USD 32 million in 2011 to USD 66 million in 2012. Production and export of pepper in China decreased by 6% and 42% respectively during 2012.

Prices

During 2012, pepper prices were relatively stable at high level, with a slight decrease. The IPC price index decreased by 3 point for black and 10 points for white pepper and fluctuated at narrow range between 220 -243 for black and 208 - 226 for white pepper. The highest price index achieved during 2012 was in March for black and in May for white pepper; while that the lowest took place in August both for black and white pepper.

Correspondingly, the composite price of black pepper decreased to USD 6,420 per mt in December 2012, from USD 6,514 per mt in January 2012 The composite price for white pepper in December 2012 was USD 8,964 per mt, decreased from USD 9,396 per mt in January 2012. The highest composite prices achieved in 2012 were USD 7,007 and 9,633 per mt respectively for black and white pepper. Although the highest price achieved in 2012 was lower than the highest price achieved in 2012, the average price in 2012 was 7-8 % higher than average price in 2011.

The IPC price index and composite price of black and white pepper are shown in Table 5 and 6 respectively.

During 2012 pepper prices showed more stable, compared to prices prevailed in the previous years. Slight declining trend was recorded starting from the highest price in October 2011 as shown in the graph below.

Prospects:

The pepper market situation in 2013 will depend largely on developments in production during the year. In the short term, the market may be slightly affected during the peak harvest period in Vietnam. It is estimated that global pepper production in 2013 would be lower by around 10,000 -15,000 MT than that of 2012. Since stock brought forward from 2012 is limited, production of pepper in 2013 is only adequate to meet the slightly increased demand; hence the price is likely to remain firm during the year 2013.