The Hindu Business Line : World pepper demand-supply disparity widens

THE world pepper consumption is growing at 3.46 per cent per annum where as the production continues to increase more than double this rate creating a wide gap between the demand and supply in the world market.

According to a study conducted by the Jakarta-based International Pepper Community (IPC), world pepper consumption is growing at a rate of 3.46 per cent a year. The US remained the single largest importer of pepper, with a share of 23 per cent of the world market.

US imports have shown an annual growth of 5.46 per cent during the last decade, the study said.

IPC countries exported 2,21,695 tonnes of pepper in 2004 from their total production of 2,70,820 tonnes. Almost 90 per cent of the total exports is shared by 27 consuming countries in the world, it said.

The IPC, after analysing the pepper import statistics from 41 countries, has categorised them into five groups viz., high growth countries, with compound annual growth rate (CAGR) of more than 10 per cent; medium growth countries, with CAGR between 5 per cent to 10 per cent; low growth countries, with CAGR between 1 per cent and 5 per cent; stagnant countries, with CAGR between - 1 per cent to 1 per cent; and negative growth countries with CAGR of less than - 1 per cent.

In a bid to increase pepper consumption the IPC has suggested that the member countries should have to frame separate strategies for each of these groups of countries. Besides, it has also emphasised the need to focus on countries with low per capita pepper consumption and high population growth. It is only the Indian domestic market, which absorbs more than 60 per cent of its pepper output, IPC sources told Business Line.

According to IPC, countries with large populations, such as China, Iran, Russia, Pakistan, Turkey, Morocco and Mexico, require more attention to increase pepper consumption. In the current situation, where there is excess supply and the possibility of additional supplies coming into the market from new producers, focused and concerted promotional efforts directed towards specific markets is required to improve consumption and stabilise prices received by farmers, it said.

While Brazil, Vietnam and Indonesia had reported a fall in their 2005 exports, Sri Lanka had almost doubled its shipments in 2005 from that of the previous year. Sri Lanka has exported 6,853 tonnes of black pepper during January - September 2005, against 3,448 tonnes during the same period the previous year, recording a significant increase of 3,406 tonnes or 98.8 per cent.

India remained the largest importer of pepper from Sri Lanka with a share of 90.4 per cent of the total pepper exports in 2004 due to the 100 per cent tariff concession granted under the Indo-Sri Lanka Free Trade Agreement applied since March 2003. Other major markets of Sri Lankan pepper are the US and UK, whose share has been declining since 1995. Vietnam, though comparatively a new entrant, has established its presence in all parts of the world.

Pepper output to decline

Meanwhile, in the recently concluded annual meeting of the International Pepper Community, some producing countries, including India, Indonesia and Vietnam, had reported that pepper production for 2006 was likely to be lower. Brazil expects that their 2006 crop will be the same as 2005. However, Malaysia projected a marginal increase in production in 2006.

Overall production for 2006 is projected to be 2,65,000 tons, against the estimated production of 2,94,770 tonnes in 2005, the sources said.