Indonesia, Vietnam prop up global white pepper market

There was a sharp rise in the international price of white pepper last week. According to Kochi export dealers, the market might be bullish in the coming weeks owing to sudden shift in the global demand and supply pattern, especially in countries such as Indonesia and Vietnam.

Last week, Indonesia had raised the price of the commodity to $3,000 a tonne because of the rising demand. Interestingly, the price rose to $3,000 from $2,500 in just five days.

Also, Vietnam, which mainly deals in black pepper, has shifted to white pepper. The prices were in the range of $2,430-2,450 a week ago.

According to US experts, the global increase in the white pepper prices might cause a paradigm shift in the market in the coming weeks.

It is also indicated that most of the dealers in Vietnam are now dealing in white pepper as its price is around $750-775 higher than the black variety.

Thus, the current stock position of black pepper in the country, at around 25,000 tonne, would further drop and the market would be in a tight supply situation.

Meanwhile, Brazil is offering white pepper at $2,700-$2750 a tonne and black ASTA at $1,550. According to Jojan Malayil, a leading Kochi-based exporter,"The shift in the demand pattern is mainly due to estimates of lower production in Indonesia."

He told Business Standard that Indonesian production of white pepper might drop to 8,000 tonne against the normal 20,000-22,000 tonne.

On the other hand, major European companies have started producing white pepper from black variety through a process called de-cortication. This is expected to increase the demand for the black variety.