Pepper

Pepper prices drift lower in August

Global pepper prices showed a mostly weaker tendency in August, the International Pepper Community (IPC) noted in its Market Review for the month.

The organisation observed that its IPC Price Index decreased by three points for black pepper and almost six points for white pepper. The price index is calculated based on price developments in 2011-15.

The IPC explained that the composite price movement of black pepper has decreased 3% to USD8,457 per tonne in August from USD8,701 per tonne in July 2016 and for white pepper it has fallen 5% from USD12,504/tonne this July to USD11,626/tonne this August.

“The pepper price has seen a decreasing trend more or less throughout the month with the prevalent price volatility in the pepper producing country,” the IPC added.

Pepper Prices in Indonesia, Malaysia, Sri Lanka and Vietnam showed a decreasing trend last month, while pepper prices in India held very stable.

“In Lampung, Bangka and Sarawak, the price volatility of -7%,-6% and – 6% respectively has been noticed during the month and pepper stock availability has started improving because of harvesting month. In Sri Lanka, pepper price has decreased by around -1.33% marginally during the month of August,” the report explained.

The group noted pepper harvesting is in its peak in Indonesia and this is the harvesting month of Malaysia and start of harvesting in Brazil as well.

Vietnam more active

In Vietnam, pepper trading has started picking up and volatility in prices has been seen.

“There has been a downward average price movement of around -4% over the month of August in the local market for black pepper. Output of this year harvest in Vietnam is better than predicted earlier and Vietnam has advantage of better accessibility and coverage of major markets,” the IPC noted.

The IPC finds that the price of fob black pepper in Ho Chi Minh City stood at the level of USD7,950/tonne throughout the month, while for white pepper it almost maintained the price of USD11,450/tonne.

Average fob prices decreased by around 5% for black pepper compared with the previous month and around 2% for white pepper, according to the IPC.

In Lampung the market has started mobilising and activity picked up last month. In view of the harvesting season, stock availability in the domestic market has improved considerably at farms. The pepper price in Lampung has decreased by about 7% in the local market. The local price of Lampung black stood at the level of around IDR93,453 (USD7.15) per kilo.

The Muntok white pepper price in Bangka in July was around IDR128,790/kg, which was around 6% down from the previous month.

The IPC remarked that even the fob price of white pepper fell by around 6% over the month of August, showing signs of volatility.

Lower crop in Indonesia

Indonesian pepper production is said to be lower than that of 2015.

In addition to the number of dead pepper vines arising from the extreme heat of the last drought season, heavy rains in Lampung and Bangka this month has resulted in many pepper berries falling down.

In Kalimantan and Sulawesi island of Indonesia, pepper output is also estimated to be less due to erratic rainfall during this season. “Weather condition is reported to be not favourable this year,” the report observed.

In Malaysia, the harvesting season for pepper is in its last stages for the month.

“The effect is quite noticeable in price movements over the month,” the IPC explained.

In Sarawak, black pepper prices locally were reported to be around 6% lower and export prices on an fob basis were seen as down 5%.

The local price in Kuching was reported at the level of MYR26.13/kg (USD6.32/kg) for black and MYR 44.53/kg for white pepper, which also decreased by around 10.33% for this August and the fob price of white pepper depreciated by almost 12% last month.

In China, the white pepper price also decreased by 6% for the month of August.

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