Pepper prices jump on low global production

Due to supply constraints in the global market, prices of black pepper have increased further. Though, harvesting in Brazil has started, the global supply of pepper is not expected to be better at least for the next 8-12 weeks.

It is quiet interesting to note that Vietnam on Tuesday quoted a price which was almost near the Indian tag at $2,800 a tonne (FoB-HCMC). India is currently quoting $2,850 a tonne for black pepper (FoB-Kochi). For the last few weeks, Vietnam continuously quoted $200-$300 a tonne less than the Indian price.

Vietnam and Indonesia are now quiet reluctant to offer pepper even at the much higher level since they expect the price of ASTA grade pepper to cross $3,000 a tonne.

Though Indonesia is quoting $2,600 a tonne for pepper, they are not in a hurry to sell the fresh crop. So the pepper mart across the globe is watching the price movement and expect further appreciation in prices. The sharp increase in prices has forced buyers from the US and EU to slow down.

The Vietnam Pepper Association (VPA) has even predicted that the pepper price may reach $5,000 a tonne during the last months of the year due to limited supply.

Vietnam has finished harvesting the 2008-2009 crop with an output of 95,000 tonnes, an increase of 4,000 tonnes, or 4.4 per cent over the previous season. Analysts have forecast a shortfall in supply as pepper output in Indonesia and Brazil is expected to decline due to bad weather.

According to the Ministry of Agriculture and Rural Development, Vietnam exported 65,000 tonnes of pepper in the first six months, which brought in an export turnover of $149 million, an increase of 37.2 per cent in quantity over the same period last year, but a decline of 10.9 per cent in value.