Pepper prices are likely to firm up only by 2020 when demand catches up with the supply, Hoang Thi Lien, executive director, International Pepper Community, Jakarta said here on Wednesday. Prices are likely to stay weak until a new equilibrium is found between demand and supply, she added.
Pepper prices are on a correction mode having touched a ten-year low recently. Global pepper production is also estimated to fall in 2019, according to IPC with Indian production set to drop.
Thi Lien cautioned farmers that pepper price are unlikely to rally to the high levels seen in the 90s and asked them to focus on value addition and achieving higher productivity.
“Prices cannot go up continuously and the high prices seen in the 90s was due to speculative demand driven by cheap money. The demand seen in the current market is more real. Supply has the potential to grow by 10% per annum while demand is seen increasing only by 1-3 %,” she added. Lien said that from the second half of 2016 pepper market has shown weakness and it was declining all the way.
She said that value added pepper varieties like the Kampot organic and Phu Quoc pepper are fetching premium prices and India should try developing its own unique variety.
She was critical about the minimum import price on pepper enforced by the government and said that it was hurting the industry. The Jakarta-based International Pepper Community (IPC) projects the total world pepper production in 2019 at 4,94,200 tonne as against 5,23,400 tonne in 2018.
Indian pepper production is projected to decline in 2019 to 47,000 tonne from nearly 64,000 tonne in 2018. Domestic consumption for 2019 is estimated at 58,000 tonne with imports at 17,700 tonne and exports projected at 17,000 tonne.
Lien was speaking to reporters after launching the personalized mobile application for pepper farmers developed in association with the All India Spices Exports Forum(AISEF).
The app is aimed to aid crop management and marketing the produce. AISEF chairman Prakash Namboodiri said that the personalized App would capture all necessary information of the farmer.
The app has the capability to load appropriate recommendations based on the variety that the farmer is cultivating and also based on the location of his farm, he said.