Indonesian pepper crop helps give direction

The domestic market of pepper producing countries showed a mixed response during the week to August 19, the International Pepper Community (IPC) noted in its report for the period.

“However, more clarity seen in production of pepper in Lampung and Bangka, Indonesia, has given a good signal in the market,” the IPC added.

The organisation observed that the price of Lampung black and Muntok white pepper increased during the week. The local price of Vietnamese black pepper also increased marginally, while for white pepper it was reported to be stable. The fob prices of Vietnamese pepper were also reported to be stable. A stable pepper price was also recorded in Sri Lanka, while in Sarawak the price of pepper has decreased.

“It was clear that production of pepper in Lampung has decreased significantly this year,” the IPC observed.

Some farmers reported that the current harvest is only 50% of normal, even lower than that of last year. This was due to the El Niño phenomenon of last year which has resulted in many productive pepper plants dying. In addition, heavy rainfall during the flowering season and a prolonged wet season were unfavourable for flowering and fruiting.

A similar situation has also happened in Bangka. Fortunately, young pepper vines planted in the last two years have started bearing fruits. Production of white pepper this year is slightly lower or virtually the same as last year.

A significant decrease in price of white pepper occurred in the last few weeks, which was due to sudden sizeable arrivals of new pepper from the current harvest, since Indonesian farmers need immediate cash to settle labour costs for picking and processing white pepper, the IPC noted.

The white pepper price in Bangka has gradually recovered from IDR115,000 (USD8.76) per kilo in the last two weeks to IDR 135,000/kg this week, the report explained.

The IPC report also noted that in 2015, the US increased its pepper imports by 11,560 tonnes (+17%) to 80,360 tonnes from 68,010 tonnes in 2014.

GTIS/US Department of Commerce, Bureau of Census shows figures that are broadly similar to those cited by the IPC

IPC explained that its figure for 2015 consisted of 53,290 tonnes of black pepper,  5,480 tonnes of white pepper and 21,590 tonnes of ground pepper.  A substantial increase of 45% was recorded for ground pepper.

US imports of pepper this year are expected to end up at similar levels to those of 2015, the IPC stated.

Table 2 shows the first half 2016 volumes, which are marginally behind those of January-June 2015.

“Although global supply from producing countries this year has decreased, sufficient inventory from last year’s good harvest in Indonesia can fulfill the production decrease this year,” the IPC concluded.

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