Pepper supply to outstrip demand

The International Pepper Community (IPC) forecast that the global pepper supply would be lower than demand next year thanks to drop in output. This, according to the international body for pepper production and trading, is due to the shrinkage in pepper cultivating area as well as the poor weather and disease outbreak in countries like India, Brazil and Indonesia.

While 2008 will see excess production of around 39,000 tonnes next year will be an altogether different picture owing to various reasons. Even in the midst of the slowdown, consumption increased 3 per cent on an average, this year and this growth rate is expected to be maintained in 2009 also. Even at a conservative estimate, the production would be cut 10-15 per cent from the 260,000 tonnes in 2008. Countries like India, Brazil and Indonesia will have a serious shortage in production while Vietnam, world’s largest producer, will have almost the same level of production at 100,000 tonnes.

The carryover stock estimated in 2008 is 85,000 tonne and coupled with the fresh production total supply had been enhanced to 345,000 tonne, last year. But there would be a sharp fall in the world stock of black pepper in next year.

Vietnam exported 86,000 tonnes, valued at $300 million till November and by the close of this year this would be 90,000 tonnes valued $310 million, according to Vietnam Pepper Association.

This means the carryover stock in Vietnam will be around 10,000 tonne. The stock position of India is rather weak this year and there may be a fall in the stock in Brazil and Indonesia also. So, the global carryover stock will be in the range of 30,000-35,000 tonnes for 2009. This indicates a weak supply chain for pepper globally in ‘09.