Global pepper output may increase 4% this season

The latest estimates of world pepper production indicate a four per cent increase in the 2012 season (November 2011-December 2012). According to the estimates of a leading export house, the total production next year would be around 270,000 tonnes. Vietnam will lead the global supply of the spice, with a total production of 140,000 tonnes. The output from the country this year was 130,000 tonnes. The global supply in 2012 is estimated to be 320,000 tonnes, including the carryover stock in major producing countries. This is 10,000 tonnes less than the supply of 330,000 tonnes in 2011.

The estimates differ on Vietnam’s production, as the country projects 150,000 tonnes production. It is certain that the production in Vietnam would be higher in the new season, since there is a sharp rise in the acreage in the country. The upward trend in prices during the last two-three seasons caused the increase in the area under pepper plantations in Vietnam. So, the supply would remain intact in 2012. It is also known that the authorities there had advised farmers not to increase the area under the spice, to keep the product in the high price zone. A section of Vietnamese growers said production would be either steady or lower in the next season because of the quick wilt disease and damage to pepper vines due to excessive use of chemical fertilizer in some areas.

The estimates suggest production in India would be lower at 42,000 tonnes, as against 48,000 tonnes in 2011. Production in Brazil and Malaysia is expected to be steady at 30,000 and 20,000 tonnes, respectively, while that from Indonesia is pegged higher at 15,000 tonnes. Production in Indonesia was 10,000 tonnes last year, affecting global supply.

Meanwhile, low supply has led to a sharp rise in prices in global markets. Vietnam raised the Asta grade price to $7,900 a tonne from $7,350 last week. The Indian Asta prices increased from $7,250-7,300 last week to $7,450 today.