IPC sees marginal increase in pepper production in 2016, but warns of El Nino



The spectacular bull-run in black pepper is set to sustain as International Pepper Community (IPC), an intergovernmental organisation of pepper producing countries, projected global crop output of 413,713MT in 2016, about 1.2 percent higher than 2015.

The organisation however, warned that projection would be revised as the full impact of the ongoing El Nino is yet to accessed.

“Indonesia, Vietnam are impacted by severe rain stress this year, while Sri Lanka and Tamil Nadu in India have faced deluge. The number that IPC has released today will be downgraded in subsequent readings,” said W.D.L. Gunaratne, Executive Director of IPC at a conference in Mysore.

Production outlook for India has been cut by 22 percent to 53,000MT in 2016 due to unseasonal summer rains and intermittent monsoon season this year. The IPC projected that India will import 11,500MT of black pepper next year compared to 10,000MT in 2015.

Vietnam, the world’s largest grower and exporter, is projected to harvest 140,000MT but Gunaratne warned that the figures provided by the Vietnam government might be too optimistic. “Based on my observation, the output will fall by 5 to 10 percent in Vietnam, and at least a 5 percent reduction in Indonesia.” The numbers released by the organisation projects a marginal dip in Indonesian production at 69,000MT.

IPC expects the pepper demand to grow at 3-4 percent next year due to higher consumption in Asia, led by India, China and Indonesia. In Kochi, the spot prices are ranging between Rs. 690-720 per kilo. Arrivals from Sri Lanka have also increased as traders have begun importing under a liberal trade agreement between India and the island nation. Under the agreement, India can import 2,500 tonnes duty-free and the rest with 8 percent duty. The IPC expects Sri Lanka to increase by 20 percent to 32,710MT next year.

“Just reduce 50,000MT from the IPC projections and you will get a realistic picture,” said a UAE-based trader who did not want to be named. “Some member countries give wrong projections as they have very little on-ground information.”

















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