Pepper market hots up as shortages squeeze the market

Pepper market hots up as shortages squeeze the market

LONDON (AFP): Pepper, king of condiments, has set the spice
market alight as the import price continues to advance in leaps
and bounds after a series of poor harvests in the key producing
countries - Indonesia, Brazil and India.

Black pepper's price for importation has risen by more than 40
percent since August 1996, when it was worth US$2,250 per ton, to
$3,200.

In the past three weeks, the rally has grown more frenzied.
Prices have shot up by around 14 percent since the start of the
year at the port of Rotterdam, Europe's biggest spice market.

Pepper prices have been set alight by the serious shortages of
supply plaguing importers, explained Arie de Vrij, a director at
one of the world's leading spice traders, Man-Producten of the
Netherlands.

The expert said that the global supply deficit is likely to
reach unheard of proportions this year. An estimated demand of
145,000 tons will overshoot by 45,000 tons the mediocre export
total for the 1996/97 season, which will further deplete already
low stocks in consumer countries.

The importers' nightmare began in October last year with the
measly crop harvested by Indonesia, among the world's biggest
producers of white and black pepper.

The pepper bush is a vine which grows in a humid, tropical
climate. The key to good pickings of pepper, which grows like
grapes on this creeper-like plant, lies in a successful
flowering, the Man-Pruducten director said.

Last year, an early monsoon had a damaging effect on the
pepper bushes, which were weakened after a particularly heavy
harvest in 1995, and "drastically affected" the flowering of the
plants in Indonesia.

The result: the country's black pepper crop plummeted by 60
percent, with only 12,000 tons available for export, compared
with 30,000 the previous year.

In Brazil, the situation was also serious, and exports fell
sharply.

In the South American country, it was the drought which was to
blame, added to producers' disenchantment with this capricious
crop. The weakness of pepper prices over the past few years has
prompted a number of Brazilian planters to switch to more
rewarding commodities.

The harvesting requires very intensive labour, which adds to
the costs. Brazil, which usually occupies third place among the
world's pepper exporters, will cut its foreign sales by 40
percent to 12,000 tons in 1996/97.

To cap it all, India, which accounts for between a quarter and
a third of world exports, is expected to record a disappointing
harvest early this year, down 20 percent on the previous year.
There too, the weather is also to blame, with an irregular
monsoon which disrupted the flowering and pollenisation of the
pepper bushes, which are natives of India.

And while Indian pepper output shrinks, a growing proportion
of the harvest is being consumed on the domestic market. India is
the world's major exporter of spices, but also the biggest
consumer.