The Hindu Business Line : Pepper price index up in April

Kochi May 15 The International Pepper Community (IPC) Price Index for black and white pepper experienced a substantial increase in April. The price index for black pepper jumped up almost 50 points to 219.87, while for white pepper, it increased over 23.0 points to 188.32.

The factors that have driven the prices to higher levels could be the reported drop of 10 per cent in Vietnam output and the below normal production this year in Indonesia in addition to the decline in last year's output in almost all the origins, including India.

Black pepper

According to IPC, the black pepper market in India was active in April with slight correction during the third week of the month before firming up again at the month's close. Strong domestic demand kept the prices high. During the month, futures market was on an uptrend. Spot price for Malabar ungarbled went up to Rs 14,400 a quintal at the month's close from Rs 12,900 a quintal, while for MG1 spot price increased from Rs 13,625 to Rs 15,195. On an average, the spot price moved up between 26 per cent and 28 per cent.

Current market trend continued to move upward given the global short supply position, it said. The international market was mainly influenced by development in Vietnam, where limited outflow from recent crops drove prices higher. The scenario would likely remain unchanged, unless there was selling pressure in Vietnam, IPC said.

The above situation started since the beginning of April. However, on the third week of the month Vietnam released some stocks from recent harvest, which eased prices. At the month's close, local price moved up again to a new level of VND53,000 a kg, up 12 per cent from previous level. Meanwhile, it was reported that as much as 10 per cent drop in pepper output is expected this year in Vietnam due to the prolonged drought and disease. F.o.b price for black pepper (550g/l) stayed at around $3,600 a tonne at the month's close, up 20 per cent from March.

In Lampung, the market was quiet, as stocks had been exhausted. As a result, price in Lampung jumped significantly from IDR22,000 a kg at the beginning of the month to IDR30,000 a kg at the month's close. Crop production this year is only expected to reach the market by July or August. The quantum, though is estimated to be better than last year, is still below the region's normal output.

In Sri Lanka, the price at pepper growing areas increased from SLRs 258 a kg at the beginning of the month to SLRs 316 a kg at the month's close.

In Brazil, it was reported that f.o.b. price for Brazilian Black was $3,850 a tonne, an increase of over 45 per cent from the previous month.

White Pepper

The tight stock situation in Bangka and Sarawak as well as slower crop outflow in Vietnam, being the region's primary source of white pepper, caused prices to move to higher levels.

At Pangkal Pinang, Bangka, local price of Muntok white was around IDR37,500 a kg, up by more than 20 per cent from the previous month. Forthcoming crop, expected by July or August, is estimated to be lower than normal. At Kuching, prices continued to steadily firm up. During April, local price increased from RM12,000 a tonne at the beginning of the month to close at RM13,320 a tonne at the month's end. Meanwhile, FOB price moved up to $4,800 a tonne, up by 7 per cent from the previous month.

In Vietnam, average price of white pepper were VND71,750 a kg (630g/l) for local purchase and $4,500 a tonne FOB, up from VND 58,650 a kg and $3,678 a tonne, respectively, in March.

In Hainan People's Republic of China, white pepper price moved up by around 16 per cent.

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