: Global pepper price, which is at an all-time high now, is unlikely to come down in the immediate future owing to a supply squeeze triggered by falling production, says the Jakarta-based International Pepper Community (IPC), which warned pepper trade against lower futures offerings ending up in non-delivery.
Over the next two years, pepper supply is not likely to improve enough to bridge the demand-supply gap. Global production is down by more than 15,000 tonnes in 2011 and demand has gone up to 3,50,000 tonnes, Executive Director of IPC S. Kannan told The Hindu in an e-mail.
The revised estimates were made after the crop season ended in all IPC member-countries, except Brazil.
Pepper production in IPC member-countries, excluding Vietnam and Malaysia, had either stayed at last year's levels or gone down in 2011. Production is not going to increase drastically due to scarcity of quality planting materials.
Even if one of the IPC member-countries improved production over the next two years, the demand-supply gap would remain, Mr. Kannan said.
Adding to the current supply crunch is the exhaustion of all carryover stocks from previous years. “This year, after almost exhausting the carryover stock, the real situation of shortage in pepper has come to light,” the IPC chief said.
Declining pepper production over the last two years had been hidden by carryover stocks, which the farmers and traders unloaded due to lucrative prices. The IPC expects only a small quantity of carryover stock from the 2011 crop.
Global export figures for 2011 and 2010 show declining trend. Exports are down 8,000 tonnes this year. Between January and August this year, exports were 1,75,000 tonnes while they were 1,83,000 tonnes for the same period in 2010.
Revised production estimate for India in 2010 was 50,000 tonnes; domestic consumption was 44,000 tonnes and exports 16,714 tonnes. Revised figures for 2011 are: 48,000 tonnes of production and 13,500 tonnes of exports.
India's pepper exports have declined dramatically between 2007-08 (35,000 tonnes) and 2010-11 (18,850 tonnes). Gains on the price front have been equally dramatic. According to Spices Board figures, the price of black pepper Malabar Garbled1 went up from Rs. 200.17 a kg on September 18, 2010 to Rs. 324.33 a kg on September 17 this year.Spot pepper price in the terminal market here surged to Rs. 345 a kg in Tuesday's trading.