Monthly Publication

In April 2017, market activity was more concentrated in Viet Nam, since pepper harvest in Viet Nam has reached the peak season. It was reported that production of pepper in Viet Nam this year is estimated to remain good. Except in Indonesia, production of pepper in other producing countries is also reported to be better and total export is estimated to increase this year.

During January ÔÇô March 2017, export of pepper from major producing countries has shown an increasing trend, particularly in Viet Nam. Export from Brazil was relatively stable, while from Indonesia, the export in the first quarter was lower from last year.

The following table will illustrate the aggregate total of export of pepper from the six major exporting countries (Viet Nam, Brazil, Indonesia, India, Malaysia and Sri Lanka) during 1st quarter 2017 as compared with the corresponding period of the last two years in metric tons.

Note: Figures are tentative estimate and subject to revision

In the first quarter, pepper export has continuously increased during the last 3 years. During January - March 2017, export of pepper from the six major exporting countries as named above is around 84,000 Mt. It has increased by 15% when compared to the export of 73,200 Mt during the same period last year and 26% higher from total export in the first quarter 2015. Out of the total pepper exported in the first quarter 2017 a volume of 51,000 Mt (61%) was from Viet Nam. Brazil has exported 12,000 Mt in January ÔÇô March 2017.

In 2016 total export of pepper from producing countries was 316,000 Mt, increased from 302,000 Mt in 2015 and from 279,000 Mt in 2014. Observing export performance realized in the first quarter, it is estimated that total export of pepper in 2017 will remain high.

Prices

The market of pepper has declined further in April 2017, where prices at most origins have slid down, particularly in Viet Nam. As the largest supplier, market development in Viet Nam has influenced market direction in other producing countries. During April 2017, pepper price at other source has decreased at different scale.

In April 2017, pepper price index has decreased marginally by 0.72 point for black pepper and 0.64 points for white pepper (Table 1.) The composite price of black pepper decreased marginally by 0.9% to US$ 5,857 per Mt from US$ 5,910 per Mt in March 2017. Similarly, the composite price of white pepper has also decreased by 0.64% from US$ 8,393 per Mt in March to US$ 8,327 per Mt in April 2017.

When compared to price in April 2016, the price has decreased by 30% for black pepper and 31% for white pepper. Significant decrease took place in the first quarter of this year. During three months (January-March 2017) the price has decreased by 19% for black and 21% for white pepper.

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

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

Table 2: Composite Price of Black and White Pepper (US$/MT)

In April 2017 market activity in Viet Nam has increased, since new material from this year harvest which start from February/March has arrived in the Market. It was reported that, as per earlier estimate, production of Viet Nam would be around 175,000 ÔÇô 180,000 Mt this year. This is sensible, since Viet Nam has released significant quantity as export in the first quarter to reduce inventory which is anticipated to be better this year. Up to March 2017, Viet Nam has released 51,000 Mt of pepper mostly from last year carry over stock. In April, the export is estimated to remain high, since substantial quantity of pepper from this year harvest has arrived in the market.

During April 2017, black pepper price traded in HCMC, Viet Nam decreased from VND 110,000 per Kg at the beginning of the month to VND 95,000 at the monthÔÇÖs close. For white pepper decreased, by 10,000 per Kg to VND 137,500 at the monthÔÇÖs close. On an average, the price has decreased marginally by 1% locally and 2% for FOB price as against average price in March 2017.

In India, the price of pepper prevailed in April 2017 decreased marginally. In dollar terms however, the price was relatively stable. Although production of pepper from recent harvest is reported to be better, but not making any significant pressure in the market. Strong internal demand for industrial uses, catering services as well as for house hold consumption, have significantly absorbed material from recent harvest. Even, India also imported significant quantity for industrial uses, particularly from Sri Lanka and Vietnam. In April 2017, local price of Malabar black stood at the level of INR 583 per Kg until 3rd week of the month. At the 4th week the price decreased to INR 549 per Kg. On average however, the price were relatively stable both in local as well as FOB price.

Production of pepper in Indonesia this year is anticipated to be significantly lower, due to too many rains during flowering season, particularly in Lampung and Bangka. The market in Lampung was very quiet in April, since raw material at farms has exhausted and upcoming crop is only expected in July/August. Local price prevailed in Lampung during April was IDR 70,000 per Kg. At the month close however, the price decreased to IDR 67,500 per Kg. On an average, the price was relatively stable. In Bangka trading was more active, since small crop has taken place in April 2017. Local price prevailed during the month stood at the level of IDR 110,000 per Kg. At the month close however the price decreased to IDR 105,000 per Kg. Other than Lampung and Bangka, Indonesia also produce pepper in Kalimantan and Sulawesi. Major share of pepper produced in these regions are white pepper which is traded internally for local consumption.

From Malaysia it was reported that prices prevailed in Kuching remained stable, even increased locally for black pepper. In Sri Lanka however, the price were reported to have decreased significantly by 9% during April 2017.

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