The global pepper market is likely to face a tight supply situation in the coming weeks due to delayed harvesting in India and Vietnam.
Traders believe that the tight supply will continue over the next 6 to 8 weeks. Although the harvest in India began in mid-December, the supply to the market remained low. Normally, new black pepper from Kerala comes to market at this time of year but this time is still very small, only about 100-150 bags (70kg / bag) compared to 400-500 bags last year.
The sudden change of weather, especially late crop delivery, has affected the crop leading to a late harvest. The Kerala crop is expected to hit the market by the end of this month. Moreover, Kerala's total production could be reduced to 15,000-17,000 tons from an average of 20,000 tons annually.
According to reports in Vietnam, the harvest was also delayed due to adverse weather conditions. Heavy rains and storms have affected pepper plantations and according to estimates by the Vietnam Pepper Association (VPA), the total output may be reduced by 5-7%. Normally, new Vietnamese pepper will be launched in the first week of February. But this time, it is predicted that the time will be the last week of February.
At the same time, stocks in Vietnam and Indonesia have fallen sharply, making supplies scarce at times. Vietnam exported 135,000 tons in 2009 and the current inventory is about 12,000 tons. Inventory of Indonesia is 7,000 tons but the next harvest will start in July.
Brazil currently has an inventory of about 12,000 tons and is not in a hurry to sell.
Vietnam's exports increased by 50% in volume and 11% in value in 2009 compared to the previous year. After Christmas and New Year holidays, European and US markets reopened on Monday and world demand is likely to improve in the next 2-3 weeks. Therefore, late harvesting in Vietnam and India may impact black pepper prices in the near future.
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