Pepper prices, though having experienced a spectacular price increase for six consecutive years, are likely to increase as global demand continues to exceed supply.
“We think pepper prices will remain strong at least until 2016 due to the global short-term supply situation,” said Datuk Grunsin Ayom, director general of the Malaysian Pepper Commission (MPB).
However, he declined to predict the potential for prices to reverse after having drastically increased in markets last year.
In 2014, the price of Kuching white pepper grade 1 closed at 38,000 RM / ton compared to 29,000 RM / ton in 2013, an increase of 31%, while black pepper soared to RM 28,000 / ton from RM 19,600 / ton closed. in 2013, it increased to 42%, a huge number.
However, both white and black pepper prices fell back to RM 36,500 / ton and RM 26,000 / ton last Tuesday (February 17) and maintain high prices for both types at the start of the move. in New Year.
Remember, the last time white pepper price broke through the RM 30,000 / ton mark was in 1990 before the market went through a long consolidation period. The price suddenly increased sharply starting from 2009.
Malaysian farmers on the pepper garden begin to seed
In the 2014 market report, the International Pepper Community (IPC) reported that black pepper prices started at US $ 7,633 / ton in January and reached US $ 9,726 / tonne – the highest ever – near the end of the year. , an increase of 27% within a year.
The main reason given by the markets is the “very limited” supply from producing countries because of their lower output. According to IPC, the global production of 2014 has decreased by 336,000 tons compared to 379,000 tons in 2013 due to the crop was affected by adverse weather.
Grunsin said that based on IPC figures, the world demand for pepper has increased by about 4% per year compared to the production growth rate of 0.7% per year. In 2015, global production is forecast at 340,000 tons compared to demand of about 380,000 tons, and therefore the supply will be in short of 40,000 tons.
“Pepper demand continues to grow despite a record price. But we need to be careful because pepper, like any other commodity, may be subject to price fluctuations due to the new crop coming into the market, ”he added.
Citing an example, he said Cambodia, a new producing country, had increased its pepper exports to 8,000 tons last year.
He said that the increase in demand for pepper is the increasing trend of consumers for many food spices, the use of spices as natural flavoring in mixed foods, for example, in instant noodles. .
Vietnam, the world's leading producer and supplier of pepper, exported 146,400 tons of pepper worth US $ 1.2 billion last year, much higher than 134,442 tons, worth US $ 890 million in the year. two thousand and thirteen.
Vietnam accounts for about 30% of world pepper production and 50% of global export volume. Indonesia, India, Brazil and Malaysia – all IPC members – are the world's top producers.
Commercial scale pepper farm in Malaysia
According to Grunsin, Malaysia's pepper output last year was about 26,500 tons, of which 12,400 tons were exported, bringing the country more than RM 300 million of foreign exchange. Besides pepper, Malaysia also exports powdered pepper, brine pepper and pasteurized pepper in large quantities.
Malaysia is also a famous country, providing quality pepper and pepper products, very reliable in executing contracts with foreign spice business customers.
The area of pepper farms in Malaysia is currently around 15,500 hectares, mostly by small-scale farmers. Sarawak state accounts for more than 95% of Malaysia's pepper production while Johore and Sabah are other pepper growing states.
Several other states in the peninsula have also invested in pepper cultivation, with some commercial scale, in recent years.
“Due to the new planting, we can expect pepper production to increase in the next two years.
“The impetus this year is to expand the planting areas and carry out replanting activities,” said Grunsin, adding that pepper will take about 30-36 months to start flowering.
* Exchange rate: 1 USD = 3.6043 RM
Source Malaysian Star
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