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During the year 2015 the pepper market was very encouraging and active as global pepper production and export increased over the previous year and prices prevailed recorded highest achieved so far. Based on the latest information received by the IPC, total export of pepper from producing countries in 2015 excluding the raw materials used for manufacturing pepper oil and oleoresin for export was around 297,600 Mt valued at around US$ 2.8 billion, as against 278,600 Mt worth USD 2.3 billion achieved in 2014. Vietnam maintained his position as the largest exporters and received major portion of US$ 1.3 billion which is around 45% in the total earnings in 2015 followed by Indonesia, Brazil and India.

Table 1. Export of Pepper in quantity and value in 2014 and 2015

Note: Exports for 2015 are provisional

Increased Production and Export.
During the 43rd IPC Session held in Mysore, India between 23rd and 25th November 2015, world pepper market scenario for the years from 2014 to 2016 was reviewed, 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 2015, production of pepper was estimated around 407,000 Mt (325,000 Mt of black and 82,000 Mt of white pepper), registering an increase of 13% from 359,400 Mt (283,800 Mt of black and 75,600 Mt of white pepper) achieved in 2014. The increase was mainly due to a significant production increase in Indonesia, India and Sri Lanka.

Export of pepper from producing countries is estimated around 295,600 Mt (254,634 Mt of black and 42,956 Mt of white pepper), which is an increase by 7% when compared to export of 278,655 Mt in 2014, mainly due to increase of exports from Indonesia, India and Sri Lanka.

Production and export of Indonesia, India and Sri Lanka recorded a significant increase, while Vietnam experienced a decrease in production and export. Production and Export in Brazil and Malaysia increased at lower rate.

Table 2: World Production of Pepper by Country, 2014 - 2015
Quantity in Mt

Note: 2015 figures are provisional

Production and export of black pepper increased by 15% and 5% respectively from 283,800 Mt and 242,300 Mt respectively in 2014 to 325,000 Mt and 254,600 Mt respectively in 2015. Production and export of white pepper also increased in 2015. Percentage increase of white pepper production was lower than black (9%); while percentage increase in export was higher (18%)

Table 3: Export of Pepper by Country 2014 - 2015
Quantity in MT

Import and Consumption
Producing countries such as India and Vietnam imported sizeable quantities of pepper mainly for value addition (like pepper oils and oleoresins and ground pepper) and for re-exports. Indonesia, Malaysia, China and Brazil also imported pepper at a smaller quantity. During 2015 an estimate of around 46,800 Mt of pepper were imported by producing countries, as against 52,350 Mt in 2014, registering a decrease of 11%. The decrease in 2014 was mainly due to sufficient supply in India and Indonesia, supported by good harvest in 2015.

Although the total imports decreased, India remained the major pepper importer among producing countries, importing around 20,000 Mt in 2015 as against 23,000 Mt in 2014. The import was mainly light berries from Sri Lanka, Indonesia and Vietnam for industrial use of oil and oleoresin. Import of Vietnam increased to around 15,000 Mt from 10,600 Mt in 2014. This was due to decrease in production of Vietnam and increased production of Indonesia, the main source of pepper for import into Vietnam and India.

Domestic consumption includes pepper for grinding, extraction of oil and oleoresins, the requirements of other industries, households and food establishments. In 2015, domestic consumption of pepper among the producing countries is estimated at around 146,900 Mt, which increased marginally from 145,600 Mt in 2014. Except Indonesia major portion of pepper consumed locally was black pepper. In Indonesia, out of 21,000 Mt of domestic consumption 10,700 Mt was white pepper.

Table 4.
IMPORT OF PEPPER BY PRODUCINGCOUNTRIES
2011-2015 (Quantity in MT)

Although production and export of pepper from Vietnam decreased in 2015, the country remained the largest producer and exporter of pepper. According to statistics from official source in Vietnam, during 2015 Vietnam has exported 133,650 Mt of pepper valued at USD 1.28 billion, registering a decrease of 15% in quantity, but increased by 6% in value when compared to exports of 156,400 Mt worth US$ 1.21 billion achieved in 2014. 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 130,000 Mt in 2015 from 148,800 Mt in 2014.

Estimated production of pepper in Indonesia during 2015 was 71,500 Mt, comprising 42,500 Mt of black and 29,000 Mt of white pepper, registering a significant increase of 38% from 52,000 Mt (27,000 Mt of black and 25,000 Mt of white pepper) reported in 2014. In the last 43rd IPC Session, it was reported that in 2015, Indonesia is estimated to export around 52,000 Mt at the value of US$ 530 million (34,000 Mt of black and 18,500 Mt of white pepper) as against 34,700 Mt (19,500 Mt of black and 15,200 Mt of white pepper) valued at US$ US$ 324 million in 2014. Export of black pepper increased by 74% and for white pepper increased by 21% in 2015

Production of pepper in India during 2015 increased substantially by 28.000 Mt from 37,000 Mt in 2014 to 65,000 Mt. Export from India has also increased to around 28,000 Mt, including export of ground and green pepper products valued at US$ 252 million as against 20,400 Mt worth US$ 176 million achieved in 2014. The export recorded an increase of around 37% in quantity and 43% in value.

Significant increase in production and export also reported in Sri Lanka from 14,100 Mt and 8,100 Mt respectively recorded during 2014 to 27,200 Mt and 18,100 Mt in 2015. Volume of production and exports increased, by 92% and 126% respectively. In terms of export earning, the increase is estimated to reach 124% from US$ 69 million in 2014 to US$ 155 million in 2015.

Production and export of pepper from Brazil were reported to have increased by 6% and 11% respectively in 2015. Production and export in 2015 were 41,500 Mt and 38,050 Mt as against 40,000 Mt and 36,550 Mt respectively reported in 2014. Export quantity increased by 11%, while that of value increased by 18% to US$ 348 million from 295 million earned in 2014. Out of the total exports around 1,500 Mt was white pepper. Brazil also exported 135 Mt of ground pepper, which is higher from 97 Mt exported in 2014.

During 2015 export of pepper from Malaysia was around 14,000 Mt (11,500 Mt of black and 2,500 Mt of white) valued at around US$ 132 million as against 13,400 Mt worth US$ 125 million in 2014. Since the ruling prices were high in 2015 the stocking of pepper was limited. Considering reported domestic consumption at 13,500 Mt and import of around 2,500 Mt, the production of pepper in Malaysia during 2015 is estimated around 22,500 Mt.

Production of pepper in China and other smaller producing countries increased by around 3-4%; while for export increased by 17% during 2015. In quantity however the increase is not significant.

Prices

During 2015 price index of black and white pepper increased by 4% each. On average price index in 2015 increased by 9 and 17% respectively for black and white pepper from average price index in 2014. The highest price index achieved during 2015 was in July 2015; while the lowest was in May for black and February for white pepper.

Correspondingly, the composite price of black pepper increased to US$ 9,490 per Mt in December 2015, from US$ 9,110 per Mt in January 2014 The composite price for white pepper in December 2015 was US$ 13,342 per Mt, increased from USD 12,876 per Mt in January 2015. The highest composite prices achieved in 2015 were US$ 9,575 and 13,880 per Mt respectively for black and white pepper.

In New York, spot price of black and white pepper reached the highest at the level of US$ 11,300 and US$ 16,500 per Mt respectively during the month of July 2015. This is the highest prices achieved in the history of pepper industry.

Prospects:

The pepper market situation in 2016 will depend largely on developments in production during the year. In the short term, the market may be affected by development in India and Vietnam which expected to harvest pepper in early 2016.

As reported earlier, production of pepper in India and Indonesia is estimated to decrease significantly in 2016, because of dry weather surging pepper growing areas in Lampung and Bangka during second part of last year as well as uncertain rainfall occurred in Southern India. It is estimated that global pepper production in 2016 would be more or less same or even lower from 2015. Under this situation coupled with limited stock brought forward from 2015 and increased overseas demand, it is expected the price in 2016 will remain firm.

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