Pepper prices to be steady

With restricted global supply, pepper prices are likely to stay firm this year.

Three-fourths of Vietnam's crop has been shipped out and the next crop season is next year. Indonesia's output was expected to be 50,000 tonnes of black pepper and 15,000 tonnes of white pepper; it now appears the output would be 30,000-32,000 (black) and 12,000-14,000 tonnes (white). These are two major producers.

In India, where the 2013 harvest was disappointing and excess monsoon has damaged the fresh crop's prospects, prices are predicted to be higher in August/September, said leading traders. Most of Kerala's crop has been hit by a heavy monsoon.

Malaysian prices have been firm, with increased domestic consumption and steady exports to Japan, Korea and Taiwan. The price of Sarawak Yellow label has close to $6,850/tonne. The general global price for ASTA grade is $6,450 a tonne.

While Europe and US buyers are waiting for lower prices from Indonesia, value adding processors from India and Vietnam are aggressively picking what they can from there, say local dealers. The Sri Lankan harvest is underway and Pakistani and Egyptian buyers are in the market, seeing attractive price levels. But quality is a big concern, as it is far inferior to Vietnam's.

On exports, India's performance was rather weak during January- June at about 7,500 tonnes, lower than the same period last year. Vietnam's export in the same period was 82,418 tonnes, of which 70,906 tonnes was black pepper. Compared to the same period of 2012, black pepper export rose 18.4 per cent and white pepper by 14.3 per cent. The average export price of the black grade was $6,178 a tonne and white pepper was $8,865/tonne. Both were about three per cent less than last year.

Malaysia exported 4,939 tonnes in these six months, a rise of seven per cent, of which 4,062 tonnes were of black pepper. With a good harvest expected, the total export in 2013 is expected to be higher than the 10,588 tonnes of 2012.