The Hindu Business Line : IPC price index declines in August

For the second time so far during the year the International Pepper Community (IPC) Price Index for black and white pepper witnessed a sharp fall in August after its steep climb in 12 months. The price index for black pepper declined 19.52 points to 227.32. While for white pepper, the price index fell by 9.35 points to 208.87, an IPC report said. Correspondingly, the Composite Price adjusted to new levels of $3,463 a tonne for black and $4,766 a tonne for white representing about 7.9 per cent and 4.3 per cent decline, respectively, from the previous month.

Black pepper

In August 2007, the market for black pepper slowed down considerably. Pepper harvest in Lampung has reached its peak during the month with estimated output for this year's crop exceeding last year's. Meanwhile, quantity restrictions at the futures market in India seemed to have negative effect on pepper trade. In India, some activities were observed at the commodity exchange during the first week of the month. Subsequently, the market experienced a slow down till the month-end. Spot prices for un-garbled black at Kochi eased down from Rs 13,500 a quintal at beginning of the month to Rs 12,000 at the month's close. Spot price for garbled black declined from Rs 14,100 a quintal to Rs 12,550, while f.o.b. FOB prices declined by $434 a tonne from $3,596 a tonne at beginning of the month to $3,162 at the month-end. Up to June 2007, Indian pepper export was around 14,776 tonnes which was a significant increase of 56 per cent against when compared to the export for the same period last year.

In Lampung, pepper harvest was encouraging for producers with output estimated to be better than last year. Although pepper prices in August were not as high as of July, they were still much better than prices prevailing at last year's harvest.

In August, trading at the local market was active. Pepper prices at farm level, for unprocessed quality, declined from IDR 30,000 a kg to around IDR 25,000 at the month-end. FOB price of Lampung ASTA stayed at $3,500 a tonne at the month-end.In Vietnam, the market continued to be quiet as available supply was limited. Prices at HCMC declined during the month from VND 52,000 a kg for local purchases to VND 46,000 a kg at the month's close. FOB prices declined from $3,350 a tonne for black 500 GL and $3,550 for 550GL to $2.900 and $3,140 a tonne, respectively. The world's largest pepper exporter - Vietnam, only harvested around 90,000 tonnes this year, compared to more than one lakh tonnes in 2006. This was mainly due to poor weather conditions and insect infestation. Between January-July 2007, it was reported that Vietnam's exports of pepper peeper dropped by more than 30 per cent to 53,000 tonnes from that of the corresponding period last year. In terms of value, however, it had increased by over 25 per cent in value due to improved price.In Sarawak, local prices of black pepper also slid down during the month from MYR9.72 a kg at beginning of the month to MYR9.60 a kg at the month's close. FOB prices declined by $50 a tonne to $3,950 per mt. On average, local prices and FOB price of black pepper decreased by 3 per cent and by 4 per cent, respectively, compared to the average prices for the previous month. Up to August 2007, total export of pepper from Sarawak also showed a significant fall of 17 per cent compared to the same period last year. In Sri Lanka, the price at growing areas was LKRs 329 a kg at the month's end which declined from Rs 342 a kg at the beginning of the month. FOB price of Brazilian black was reported at $3,350 a tonne at the month-end.

WHITE PEPPER

During August 2007, the market for white pepper was also quiet with declining price trend with the exception of Sarawak.In Kuching, local price of Sarawak white fluctuated between the range of MYR14,800 - MYR15,000 a tonne. At the beginning of August, the price was MYR14,940 a tonne before moving up to MYR15,000 at mid-month and closing at MYR14,800 at the month's end. On average, local prices eased marginally while f.o.b. prices moved up by 2 per cent. In Bangka, pepper harvest had begun in August 2007 with lower output. Trading at local market was not active as farmers were unwilling to sell due to unattractive price. During August, prices at domestic market were around IDR 39,000-40,000 a kg. The prices were slightly lower than the previous month or 4 per cent in dollar term due to weakened rupiah.In Vietnam, trading for white pepper was limited. Prices for Vietnam's white pepper at HCMC dropped by around 2 per cent from the previous month. In Hainan, white pepper prices were down by around 5-6 per cent, when compared to previous month's average.

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