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Since 2016 the price has shown a decreasing trend. The decrease was due to supply from Viet Nam increased significantly in 2016. This was possible supported by substantial increase in production from 122,000 Mt reported in 2015 to 170,000 in 2016. In 2017 production of Viet Nam is reported to have increased again. As a result, the price decreases significantly this year to touch the lowest recorded in June 2017. In addition to increased production in Viet Nam, production of pepper in Cambodia is also reportedly to increase substantially this year, from 11,800 Mt in 2016 to 20,000 in 2017 (Sources: Cambodia Minstry of Agriculture and, Forestry and Fisherries, 2017). Whereas major share of Cambodian pepper is entering Viet Nam for re-export.

During June 2017, the Pepper Price Index decreased by 4.8 points for black pepper and 7.14 points for white pepper (Table 1). The composite price of black pepper decreased by 7.2% from US$ 4,980 in May 2017 to US$ 4,625 per Mt in June 2017, while that of white pepper decreased by 10% from US$ 7,366 per Mt in May to US$ 6,628 in June 2017 (Table2).

Table 1. IPC Price Index (Base Year: Average 2011 - 2015)


Note: The price index is calculated based on price developments during 2011-2015

Table 2: Composite Price of Black and White Pepper in USD/MT

Pepper market continued to slow down in June 2017. Weak overseas demand in one side and a big supply on the other side from recent harvest in Viet Nam entering the market were still the main factor for the weakening of the market. Entering second half of June however, the market has shown a positive signal, where pepper price in Viet Nam has increased.

In June 2017 local price of pepper in HCMC was on average at the level of VND 76,000 per Kg for black and VND 118,000 for white pepper. When compared to average price in May, a decrease of around 7% was recorded locally. In the second half of June 2017 however, pepper price in Viet Nam has shown an improvement. Local price of black pepper has moved up to VND 77,500 per Kg from VND 75,000 per Kg in the mid of June. The increased price may indicate supply of pepper in Viet Nam has reduced.

In India, closing the month of June, Malabar black pepper increased by INR 1.5 per Kg to INR 486 per Kg. When compared to average price in the previous month however, the local price of black pepper in India decreased marginally by 1%.

In Lampung and Bangka the market was inactive, although initial harvest of pepper has started. Local price of black pepper in Lampung and Bangka has touched the lowest level in mid of June. Prices in Lampung prevailed at very low around IDR 40-45,000 per Kg and in Bangka the price prevailed between IDR 75-80,000 per Kg during the month. Closing the month however the price has increased marginally to IDR 45,000 for black and in Bangka increased again to IDR 80,000 per Kg for white.

As reported earlier, production of pepper in Indonesia (Lampung and Bangka) decreased significantly this year. Pepper harvest in Lampung has begun in June, but picking activity was not brisk, since production of this year crop season is not encouraging. Very few berries are seen on vines and not uniform. Pepper gardens in East Lampung are relatively good, but yield is reportedly much lower than last year harvest. Poor and tin gardens are observed in many areas in North Lampung. Some farmers reported that output of this year harvest is estimated only 20% of normal harvest. It can be said that production of pepper in Indonesia this year is significantly less than last year harvest.

Observing the above situation, price of pepper in the second semester 2017 is expected to be better, since major share of pepper from Viet Nam has been released, while less supply from Indonesia will not making any pressure in the market. The market is now watching harvest development in Brazil which is expected to begin in September 2017.

Table 3: Local Price of Black Pepper in US$ per Mt


Table 4: FOB Prices of Black Pepper in US$ per Mt


Table 5: Local Prices of White Pepper in US$ per Mt


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

EXCELLENT PERFORMANCE OF CAMBODIAN PEPPER

Cambodia is currently known as one of pepper producing countries in Southeast Asia. This commodity has grown in Cambodia since 13th century, in the province of Kampot. Currently pepper area has been expanded to other provinces as well. In 2016 pepper cultivation in the country has occupied an area of 6,124 hectares and in 2017 increased to around 6,600 hectares which are spread in provinces of Kampot, Preah Sey Haknot, Koh Kong, Taeo and Kampong Cham.

In the last few years Cambodia has emerged as one of the important producing countries, considering the fact that production of pepper in Cambodia has increased significantly year by year. In 2010 from 860 hectare of pepper area has resulted 1,250 Mt of black pepper. During period of five year Cambodia has successfully increased production to 9,800 Mt in 2015 and in 2016 increased further to 11,800 Mt. Given the situation of favorable weather this year, production of pepper in Cambodia during 2017 is estimated to increase significantly to 20,000Mt.

Cambodian Pepper Cultivation and Production in 2010-2017

It was reported that major share of pepper from Cambodia is exported to Viet Nam for re-export and also to Thailand by land. There is no record volume of pepper sent to Viet Nam and Thailand through this line. Only few countries imported pepper from Cambodia which is transported by sea and recorded. Recorded pepper exported from Cambodia is shown in the chart below.