World Pepper Industry; Present status and Future Trend

 ipc  03/02/2016  204
During the last decade world pepper industry has indicated certain changes mainly respect to extent under cultivation, production and export. The most prominent feature is the behaviour of prices and uncertainty of the future for major pepper producers. However, after 2010, the price of pepper became no matter for the producers as it was keeping the trend of climbing beyond the predictions and expectations of the producers and exporters throughout the world.

During the last fifteen years data is considered, no new big pepper producing country has come to the seen but several changes have taken place in traditional pepper producing countries. Overall extent under pepper has not shown a considerable change despite of that, Vietnam has increased the extent of pepper from 36,106Ha in 2001 to 57,000Ha in 2015 and China has increase its extent by 14,300Ha during the same period. The reason for the overall stagnation of the extent may be the readjustment of the extent under pepper in India by 2008 to a realistic figure. This decision has headed to reduce extent by about 50,000Ha may have taken by considering the data from the annual census and also to facilitate monitoring of the industry.

However, still India has the largest extent under pepper cultivation reporting 195,000Ha throughout the country while Indonesia remains at the second position having 116,000Ha. Vietnam has reported 57,000Ha of pepper with gradual annual increase of the extent and Extent under pepper in Brazil was reported as 45,000ha in 2004 but by 2006 it has come down to 35,000Ha. From 2007 to 2015, officially reported figure under pepper in Brazil is 20,000Ha. Extent under pepper in Sri Lanka is reported as 32,4700ha in 2015, coming to the 4th position and among the IPC member countries, extent of pepper, in Malaysia is 16,300Ha, the lowest. Gradual increase in pepper extent in China has reached now 25,000Ha. No significant change in extent of pepper can be observed in other pepper producing countries.

Before 2001, the whole authority of the pepper industry was held by India and Indonesia and from 2002 onwards, it was taken over by Vietnam. Within a short period of ten years, Vietnam could increase their production by eight fold to become the world largest producer and exporter of pepper. By 2004, Vietnam pepper production touched 100, 000Mt. As it is well established, pepper is a crop highly sensitive to weather changes and mostly current year rain fall distribution decides the next year crop. Year to year change of the pepper crop is obvious but with all, Indonesia has been able to maintain their pepper production without drastic change but no improvement of the sector. Despite of that, pepper crop in India has shown a decline and in six years from 2001, production decline by 29,000Mt was reported. The worst situation reported in 2014, during the decade reporting 37,000Mt of total production; a half of that at the beginning of the decade. Production in Brazil and Malaysia also indicated a gradual decline but were able to maintain their positions. Pepper production in Sri Lanka seems to improve gradually during the early part of the decade while touching the maximum reported production of 28,000Mt in 2013. However, decline in production during 2014 to half of that is not well explained. Among the non IPC member countries,

China is entering to the pepper industry steadily though the production is still not adequate to meet the growing local demand. Thailand and Madagascar maintain their position with no significant improvement. Cambodia is steadily entering to pepper production but no realistic data available for a period of time to make any comment. However, by 2014, reported production was nearly 8,000Mt.

With comparison to total pepper export in 2001, increase of the volume by almost 100,000Mt can be observed in 2015. Indonesia was holding the position of world number one pepper exporter until the end of the 20th century but with beginning of the 21st century, that was undertaken by Vietnam and also continued steadily during the last 15 years with yearly improvements. Vietnam increased its export capacity from 56,509Mt in 2001 to 156, 396Mt in 2014; nearly threefold increase. Brazil has been able to maintain its export volume steadily over the period as their market it steady and stable. Despite of the variable productions reported, India maintains its position as a steady supplier by maintaining the export volume. Pepper export from Malaysia also declined as the production was in a declining trend. Sri Lanka was able to show an improvement in export over the period reporting the highest volume in 2013 but decline again 2014.

Figure 1. Behaviour of the world pepper production over the last twenty five years

Figure 2. Productivity of pepper (Mt./ha/yr) in IPC member countries

Productivity of Pepper
Low productivity of pepper in all the traditional pepper growing countries is the major constrain. Average productivity in Vietnam is maintained above 2.0Mt Ha-1Yr-1 and Brazil and Malaysia maintain the average productivity over 1.5Mt Ha-1Yr-1. Low productivity in India and Indonesia could be attributed to the nature of scattered small pieces of land and mixed system of cultivation with little inputs. Over the years Sri Lanka is showing an increase in productivity of pepper as a result of the emphasis given on the productivity improvement of the existing pepper lands. Age of the plantations, pest and disease incidences, low inputs and high shade from support trees or the companion crops are the major reasons for low productivity in pepper.

Pepper prices
Prices of pepper are the main point in concern by producers, traders and consumers. The drop of pepper prices with the onset of 21st century, ended with many speculations on future prices. Some of the producing countries did not pay any attention on industry expansion or even to maintain the existing crop. However, by 2009, price of pepper, increased beyond all the predictions on future prices and still no firm prediction on price stability for future is made based on systematic analysis (Figure 3).

There is no decline in supply but prices are in increasing trend. Recent investigations reveals that the change of food habits, increase income in new markets and deviating from artificial flavours have created higher demand for natural food like spices. Though no quantified strong evidences available, it is likely to continue the present prices for pepper with no decline for future.

Figure 3. World pepper price trend during last fifteen years

Figure 4. World pepper price trend during last forty years

Pepper Exports
Vietnam remains the number one producer and exporter of Black and White pepper to the world. Until 2009, Indonesia, maintained its position as the world largest producer and exporter of white pepper but from 2009 onwards Vietnam became the largest exporter. Brazil maintained its position as the third largest exporter of pepper with slight changes over the years. Production and export volumes of pepper in Indonesia, India and Sri Lanka fluctuate significantly over the years but Malaysia show only slight changes.

Figure 5. Export of Black pepper by country

Figure 5. Export of White pepper by country

Challenges in Pepper industry
For the pepper producing countries, maintaining their productivity is a challenge. Especially for the traditional producing countries like India, Indonesia and Sri Lanka, immediate action should be paid on productivity improvement by replanting of the old plantations, soil and moisture conservation to face the climate change uncertainties, adoption of more effective pest and disease control measures and safe use of pesticides. Quality is the most concern by the consumers as world is more and more health concern. After considering health of the consumers and environment as whole, possible use of natural pesticides and fertilizers should be given more emphasis. Sharing information is the option for that.

Over supply need to be monitored to keep the price stability with closer monitoring of the market from consumers end as well as the producers side.