The global pepper market is likely to face a tight supply situation in the coming weeks due to delayed harvests in India and Vietnam.
Traders believe the tight supply will continue for the next 6 to 8 weeks. Although the harvest in India has started in mid-December, the market supply is still low. Normally, new crop of black pepper from Kerala enters the market at this time of year but this time it is still very small, only about 100-150 bags (70kg/bag) compared to 400-500 bags last year.
Sudden weather changes, especially late season changes, have affected the crop, leading to late harvest. The Kerala crop is expected to hit the market only by the end of this month. Moreover, the total production of Kerala could be reduced to 15,000-17,000 tons from the 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 growing areas and according to estimates by the Vietnam Pepper Association (VPA), total production may decrease by 5-7%. Normally, Vietnam’s new pepper will hit the market in the first week of February. But this time, it is forecasted that the time will be the last week of February.
At the same time, stocks in Vietnam and Indonesia have decreased more sharply, causing supply to be scarce at times. Vietnam exported 135,000 tons in 2009 and the current inventory is about 12,000 tons. Indonesia’s inventory 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 the Christmas and New Year holidays, European and US markets reopened on Monday and world demand is likely to improve over the next 2-3 weeks. Therefore, the late harvest in Vietnam and India is likely to affect the price of black pepper in the near future.
According to the Vinanet
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