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Behavior of the Pepper prices during 2014 was the main subject of discussion among Pepper players. Starting from USD 7,633 per ton during January Black pepper prices reached USD 9,726, the ever highest figure, at the end of the year recording 27% price increase within one year period. The reason for that is decline of the production in all the producing countries. The fact was confirmed during the 42nd Session of IPC held during 27th to 30th October 2014, in HCM City, Vietnam. The world pepper producers concluded that world production of pepper will confined to 336,000Mt in 2014 recording 11% decrease from 379,000 Mt in 2013.

Based on the latest information received by the IPC, total export of pepper from producing countries in 2014, excluding the raw materials used for manufacturing pepper oil and oleoresin, was around 265,800 Mt valued at around USD 2.26 billion, as against 278,100 Mt worth USD 1.88 billion achieved in 2013. Out of all VietnamÔÇÖs contribution was USD 1.2 billion and equivalent to 53% of the total earnings in 2014 followed by Indonesia and Brazil. Global pepper industry showed 4% drop in export volume but 21% increase in earnings.

Table 1.
Export of Pepper in quantity and value in 2013 and 2014

Note: Exports for 2014 are provisional

Decreased Production and Export.

Based on the latest development and information received from concerned governments in member countries, trade source and assessment made by IPC, production of pepper in 2014 is estimated around 336,000 Mt (251,000 Mt of black and 85,000 Mt of white pepper), registering a decrease of 11% from 379,000 Mt (301,000 Mt of black and 78,000 Mt of white pepper) achieved in 2013. Production of black pepper decreased by 17%, while production of white pepper increased by 9%. Black pepper prices in India, Indonesia and Sri Lanka were significantly declined; while in Brazil, Sarawak and Vietnam a marginal increase were recorded in 2014. Implication of the production decrease to the market development was that price experienced a steadily increase from US$ 6,900 per Mt in February to the peak at US$ 9,900 in November 2004, for Black pepper. Price of White pepper increased from US$9,400 per Mt in March to US$ 13,600 in December 2014. Production and price behavior indicate that most of the stocks have been released to market during the latter part of the year due to high prices prevailed.

Table 2.
World Production of Pepper by Country, 2013 - 2014 (MT)

Note: Figures for 2014 are provisional

In 2014 total export of pepper from producing countries was 265,800 Mt (226,300 Mt of Black and 39,500 of White pepper). The total export decreased by 4% when compared with total export of 278,000 in 2013. Export of black and white pepper decreased by 4% and 7% respectively. Total export realized in 2014 was lower than estimated earlier, mainly due to significant fall in export realization from Sri Lanka and Indonesia. In the last 42nd Session it was estimated that export of pepper in 2014 at around 269,000 Mt,

Table 3.
Export of Pepper by Country 2013 - 2014 (MT)

Note: Figures for 2014 are provisional

Increased 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 for re-exports. Malaysia, China, Indonesia and Brazil also imported a smaller quantity. During 2014 an estimate of around 55,000 Mt of pepper were imported by producing countries, as against 37,800 Mt in 2013, registering an increase of 45%. Due to decreased production, Indonesia and Vietnam have been forced to imported more pepper to fulfill export commitment made in advance. Increase in import by other countries like China was mainly for local consumption.

In 2014, domestic consumption of pepper among the producing countries is estimated at around 145,500 Mt, recording a marginal increase by 2% from 143,000 Mt in 2013. Increase consumption in producing countries is most likely due to advancement in food processing industry.

Table 4.
Import of Pepper By Producing Countries 2010 - 2014 (Mt)

Prices

During 2014 prices of the pepper was the topic in market and average prices during the year were the highest ever recorded. At the beginning of the year the composite price of Black and White pepper were US$ 6,900 and US$9,400 per Mt respectively. The price then increased steadily to US$ 9,900 and US$ 13,600 per Mt at the end of the year. Entering the year 2015 the price is anticipated to decrease in response to the expected good harvest in India. However, due to limited stocks in consuming countries, pepper harvested in the year will be easily absorbed by the market, and price is expected to remain firm.

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

Table 5.
IPC Price Index (Base Year : Average 2006 - 2010)

Table 6
Nominal Composite Price of Black and White Pepper (USD/Mt)

Note: Composite price is obtained based on the calculation of monthly export and FOB price of the top five pepper producing countries (Vietnam, Brazil, India, Indonesia and Malaysia)

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