Pepper market Scenario during 2008/2009

Excerpts of the Final Report produced by IPC metting in Belem presented by the Executive Director of IPC

PRODUCTION
" During the last six years, world production or pepper declined consistently, with the exception of 2008, from 364,500 tons in 2003 to an estimated 310,636 tons in 2009, a rate of 2,5% per year.
The continuous decline in prices from the peak of averagedly U$D 5,610/ton for black pepper in New York in 1999 to the bottom level of around U$D 1,675/ton in 2004/2005.
However price increase in the late 2006 till the middle of 2008, has yet to show any impact to the increase in output. "
"Overall output was reported reduced in Indonesia, Brazil and Sri Lanka, India was reported stable and Vietnam increased."

2009
"During 2009, it is estimated that global pepper production would be lower by around 8,200 tons ( 3%) from 318,843 ton in 2008 to 310,636 ton in 2009 instead of the projection made during the last IPC meeting which was of 325,000 ton. As for the black pepper it is estimated a total of around 243,600 ton."
" Production of black pepper in Brazil, Indonesia and Sri Lanka is estimated to remain lower while production in Vietnam and Malaysia tend to increase"

EXPORTS
" During 2009, exports from most origins is expected to decrease, due to estimated lower output this year.
However, exports from Vietnam were suprisingly reported to increase substantially this year, offsetting lower exports of the other countries. During January-September 2009, export from Brazil, India, Indonesia, Malaysia and Sri Lanka totaled at around 87,000 ton as against 102,500 tons in the same period of the last year, showing a significant fall of 15%.
If this performance is extrapolated to the situation of total export from these countries in the year, it is estimated that export of pepper from these five countries in 2009 would be around 112,500 ton.
Some sources reported that Vietnam has shipped 120,000 ton of pepper during January - October 2009. Observing this performance, about 130,000 tons of pepper would be achievable to be shipped from Vietnam during this year. Taking into account that export from other sources ( China, Thailand, Madagascar, Ecuador, etc.) at around 10,000 ton, the total export of pepper in 2009 would be around 252,500 ton."

PRICES
"Price fluctuates from year to year depending upon demand and supply. During 2008 till beginning of 2009, pepper prices experienced a decrease and moved up again in the second semester of the year.
In addition of increased supply in 2008, the decrease in prices was influenced also by demand factor, since global economic turmoil in 2008 has lowered demand of main consuming countrues, such as United States and European countries."

CONCLUSION
"Global pepper production in 2009 would be lower, while the export indicates an increasing trend. As a result of drop in production and exhausted carry over stocks, increased prices could be expected in the global market."

"It is also evident that the productivity of traditional pepper producing countries remains at low level, making remuneration to the farmers not attractive to remain in the industry."

"For both black and white pepper the lucrative prices experienced from around early 2007 toearly 2008 is yet to be achieved.
Given the slow growth rate of pepper production and exhausted carry over stocks, the prices may continue to rise in the world market"

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EDITOR PEPPERTRADE