IPC views global pepper pricing as mixed last month
The global pepper market has shown a mixed response during March, the International Pepper Community (IPC) said its March 2016 Market Review.
The IPC finds that pepper prices in India and Sri Lanka increased, while in Vietnam they decreased. A marginal decrease was also reported in Lampung. In Sarawak and Bangka, the prices were relatively stable throughout the month
In addition, the Price Index of pepper decreased by 6.76 points for black pepper (to 112.54) and 6.0 points (to 119.54) for white pepper. The IPC price index is calculated based on price developments during 2011-15.
IPC noted also that the composite price of black pepper decreased by 5.7% to USD8,372 per tonne from USD8,875 in February 2016 and that for white pepper eased 4.8% to USD12,377/tonne from USD12,998/tonne the previous month.
“The decrease was mainly influenced by the significant decrease of fob price in Vietnam, the largest pepper exporting country, while prices at other producing countries were relatively stable,” the IPC explained.
India’s pepper harvest was completed in March. “It is reported that the output was significantly lower when compared with the output of previous year. Pepper produce from this year harvest has already entered the market during the month, but no any significant effect on prices in India has been observed,” the report stated.
Supported by huge internal demand and less production this year, the pepper market in India remained steady, although the pepper price has shown an increasing trend. In March, the local price of pepper in Kochi, India, has increased to INR649 (USD9.77) per kilo from INR622/kg at the beginning of the month. On average, the local price of Malabar black pepper has increased by 4% from the previous month’s average.
In Sri Lanka, the average price of pepper at growing areas also increased to LKR 1,223 (USD8.15) per kg from LKR1,208 in the first week of the month. On average the price increased by 4% during March.
Trading still slow on Vietnam pepper
Last month also saw the progress of the pepper harvest in Vietnam. “New material from the initial harvest has been sold in the market. Trading however is still not brisk, as overseas buyers are expecting to get more competitive price,” the IPC stated.
The Vietnam Pepper Association expects output from this year’s harvest in Vietnam to be better than predicted earlier and IPC suggested that Vietnam is likely to take advantage of this expanded market by lowering price.
The local price of Vietnamese pepper decreased during the first half of the month. The local price of black pepper had experienced an improvement in the second half of the month. The fob price of black pepper in Ho Chi Minh City stood at the level of USD8,050 throughout the month, while for white pepper the price had decreased from USD12,250 per tonne at the beginning of the month to USD11,550 per tonne at the month’s end.
When compared with the previous month, the average local price of Vietnamese black pepper decreased by 6%, while and for white pepper it eased by 8%. Average fob prices have fallen by 10% for black and 8% for white pepper, the IPC stated.
“In Lampung the market was very quiet, in view of limited stock in domestic market. Stocks available at farms have already exhausted. Only some strong farmers still keep limited stock. Perhaps because of decreasing price in Vietnam, pepper price in Lampung experienced a marginal decrease during the month,” the report observed.
IPC recalled that in the first week of the month, the local price of Lampung black pepper stood at the level of IDR104,000 (USD7.89) per kg before decreasing to IDR 102,000/kg the following week until the end of the month. On average, the local price in Lampung decreased by a marginal 1%.
The price of Muntok white pepper in Bangka was around IDR160,000/kg during the month, up 5% from the average level in February. Prices on an fob basis were up about 1% from those of the previous month
IPC noted that Indonesian pepper production is reported to be lower this year.
In addition to the number of dead pepper vines due to very hot weather in the last drought season, heavy rains in Lampung and Bangka over previous months has resulted in a lot pepper berries falling off the vines.
In Kalimantan, production of pepper is also estimated to be less due to erratic rainfall during this season. Weather condition are said to be not favourable this year.
In Sarawak, pepper prices were reported to be stable throughout the month. The local price in Kuching was seen as at the level of MYR29 (USD7.44) per kg for black and MYR49/kg for white pepper, the IPC noted.
In China, the white pepper price decreased by a marginal 1%.