Vietnam to top India as main pepper producer
KUALA LUMPUR - Vietnam is set to ramp up its pepper production to 80,000 tonne this year, overtaking India as the world's largest producer of the spice in an already oversupplied market, industry sources said on Monday.
Vietnam, already blamed for a glut in global coffee supplies, was initially expected to produce 63,000 tonne of black pepper in 2003, up 3,000 tonne from last year.
But sources with the International Pepper Community (IPC) said they had revised up the estimates.
"Vietnam's pepper exports accounted for 60 per cent of global trade in April-May. The crop is out and Vietnam is very aggressive," said one source with the Jakarta-based IPC.
"Our latest estimates indicate Vietnam is going to produce 80,000 tonne of pepper. It overtakes India as the world's largest producer," said the source.
Vietnam exported 47,200 tonne of black pepper from January through June, down 1.1 per cent from the same period last year, according to the General Statistics Office. Vietnam exports most of its pepper.
India, now the second largest grower, was likely to produce between 55,000 and 65,000 tonne of both black and white pepper this year, down from 80,000 tonne in 2002, said IPC sources.
They said global pepper output was estimated at around 300,000 tonne in 2003, down from 324,000 tonne last year. But some traders said global consumption stood at only around 230,000 tonne a year, putting more pressure on prices that have yet to recover from four- year lows.
In Malaysia, the world's fifth-largest producer, many farmers were reluctant to harvest the April-June crop because of poor prices, said traders. Local black pepper was quoted at four ringgit ($1.05) a kg, a far cry from nearly 20 ringgit in 1999.
Production costs were 4.5 ringgit a kg.
"People are blaming Vietnam. Buyers keep saying Vietnam is selling pepper cheaply. I also learnt it plans to produce white pepper, said a trader in Malaysia, referring to the higher quality variety.
IPC sources said Malaysia could produce as much as 27,000 tonne of black and white pepper this year because of recent expansion in plantation areas but traders in Malaysia denied this.
"We earlier thought this year's output will be unchanged at 24,000 tonne. But if you look at the harvest now, I think the numbers may reach between 22,000-23,000 tonne," said one trader.
"Prices are too low, so some farmers don't want to harvest the crop. They don't have enough money to pay the workers," said the trader.
The IPC sources said Indonesia, the world's third-largest grower, would produce 48,000 tonne of black and white pepper this year, down from 52,000 tonne in 2002.
Brazil, the world's fourth-largest producer, would produce between 35,000 and 47,000 tonne this year against 45,000 tonne last year, they said.
Reuters - July 07, 2003.
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