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39th Annual Session 22nd – 26th Nov’ 2011
LombokLombok Indonesia
Black Pepper A retrospectA retrospect
Compiled : Sibi K Thomas
•A RetrospectBlack •A Retrospect•Down the history lanePepper
•Price movement•Production•Consumption•Balancing
Some Data
•Price Cycles• Future Points to ponder
Emerging T d •Future‐ Points to ponderTrends
Compiled : Sibi K Thomas
$4.10
BLACK PEPPER PRICE C&F NY $/LB
CNF NY $/LB
$3 10
$3.60
$2.60
$3.10
$1.60
$2.10
$0.60
$1.10
$0.10
JAN‐96
J AN‐97
JAN‐98
JAN‐99
JAN‐00
JAN‐01
J AN‐02
JAN‐03
JAN‐04
JAN‐05
J AN‐06
JAN‐07
JAN‐08
JAN‐09
JAN‐10
JAN‐11
J AN‐12
Compiled : Sibi K Thomas
Black Pepper – A RetrospectBlack Pepper A Retrospect
• Market was at1994BLACK PEPPER PRICE C&F NY $/LB
CNF • Market was at low ebb $0.80/ Lb range
1994‐1996
$3.20 $3.40 $3.60 $3.80 $4.00
CNF …
• Price started to i1996>$2.00
$2.20 $2.40 $2.60 $2.80 $3.00
increase 1996>
$0.80 $1.00 $1.20 $1.40 $1.60 $1.80
• Peaked to $3.101998‐1999
$0.20 $0.40 $0.60
JAN‐96
JAN‐97
JAN‐98
JAN‐99
JAN‐00
JAN‐01
JAN‐02
JAN‐03
JAN‐04
JAN‐05
JAN‐06
JAN‐07
JAN‐08
JAN‐09
JAN‐10
JAN‐11
JAN‐12
Compiled : Sibi K Thomas
J J J J J J J J J J J J J J J J J
Black Pepper – A RetrospectBlack Pepper A RetrospectBLACK PEPPER PRICE C&F NY $/LB
CNF•Market Started to crash2000
2001$3.20 $3.40 $3.60 $3.80 $4.00
CNF …
•Collapsed to $0.60 Range•Remained at $0.65‐0.70 Range
2001‐2006
$2.00 $2.20 $2.40 $2.60 $2.80 $3.00
•The fundamental reason for this low price level •Emergence of Vietnam as the major producer of Pepper2001‐$0.80
$1.00 $1.20 $1.40 $1.60 $1.80
• Large crops from the traditional producing countries like, India, Indonesia and Brazil
002006
$0.20 $0.40 $0.60 $0.80
JAN‐96
JAN‐97
JAN‐98
JAN‐99
JAN‐00
JAN‐01
JAN‐02
JAN‐03
JAN‐04
JAN‐05
JAN‐06
JAN‐07
JAN‐08
JAN‐09
JAN‐10
JAN‐11
JAN‐12
Compiled : Sibi K Thomas
J J J J J J J J J J J J J J J J J
Black Pepper – A RetrospectBlack Pepper A Retrospect
• Market Started toBLACK PEPPER PRICE C&F NY $/LB
CNF • Market Started to recover and came out of the bearish phase
2006$3.20 $3.40 $3.60 $3.80 $4.00
CNF …
• Oscillated at $1.20‐1.80/ Lb
• The emergence of Electronic Online
2006‐$2.00 $2.20 $2.40 $2.60 $2.80 $3.00
Electronic Online Futures Exchanges in India added a different dimension to the trade
2009Compiled : Sibi K Thomas
$0.80$1.00 $1.20 $1.40 $1.60 $1.80
• Started to break away from the 10‐12 year old2010$0.20
$0.40 $0.60 $0.80
JAN‐96
JAN‐97
JAN‐98
JAN‐99
JAN‐00
JAN‐01
JAN‐02
JAN‐03
JAN‐04
JAN‐05
JAN‐06
JAN‐07
JAN‐08
JAN‐09
JAN‐10
JAN‐11
JAN‐12
J J J J J J J J J J J J J J J J J
Black Pepper – A RetrospectBlack Pepper A RetrospectBLACK PEPPER PRICE C&F NY $/LB
CNF
• Gradually recovered finally flared up to $3 8 / b i O ’
$3.20 $3.40 $3.60 $3.80 $4.00
CNF …
$3.85/ Lb in Oct’11• The bull phase was catalyzed by the Future’s Market
2010‐$2.00 $2.20 $2.40 $2.60 $2.80 $3.00
Future s Market speculators In India who are not from the spice trade.. From Stock market!!
2011$0.80$1.00 $1.20 $1.40 $1.60 $1.80
Stock market!!
$0.20 $0.40 $0.60 $0.80
JAN‐96
JAN‐97
JAN‐98
JAN‐99
JAN‐00
JAN‐01
JAN‐02
JAN‐03
JAN‐04
JAN‐05
JAN‐06
JAN‐07
JAN‐08
JAN‐09
JAN‐10
JAN‐11
JAN‐12
Compiled : Sibi K Thomas
J J J J J J J J J J J J J J J J J
350000
Black Pepper Global Production
250000
300000
200000Vietnam
Others
100000
150000Malaysia
Brazil
Indonesia
India
50000
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Compiled : Sibi K Thomas
Global Consumption Mt BP>WP De‐cortication MtBlack Pepper Global Consumption
300000
350000
250000
150000
200000
50000
100000
0
50000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Compiled : Sibi K Thomas
Production Mt
Max $/Lb ‐C&F NY
Min $/Lb ‐C&F NY Global Production V/s Price
$3.50
$4.00
300000
350000
$3.00250000
$2.00
$2.50
200000
$1.00
$1.50
100000
150000
$0.5050000
Compiled : Sibi K Thomas
$0.000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
$4.00
Balancing Stock‐Mt
C&F NY $/LbBlack Pepper Price Vs Balancing Stock
210,000 $3.50
160,000
$3.00
110,000 $2.00
$2.50
60 000
$1.50
60,000
$1.00
Compiled : Sibi K Thomas
10,000 $0.50
Jan‐96
Jul‐9
6
Jan‐97
Jul‐9
7
Jan‐98
Jul‐9
8
Jan‐99
Jul‐9
9
Jan‐00
Jul‐0
0
Jan‐01
Jul‐0
1
Jan‐02
Jul‐0
2
Jan‐03
Jul‐0
3
Jan‐04
Jul‐0
4
Jan‐05
Jul‐0
5
Jan‐06
Jul‐0
6
Jan‐07
Jul‐0
7
Jan‐08
Jul‐0
8
Jan‐09
Jul‐0
9
Jan‐10
Jul‐1
0
Jan‐11
Jul‐1
1
Jan‐12
Jul‐ 1
2
Market ProspectsMarket Prospects
ChallengesChallenges Concerns PositivesPositives
Compiled : Sibi K Thomas
Carry over stock to 2012 season is at all time low2012 balancing stock scenario is also not so promising
All eyes are on Vietnam and the future price t i i t d d it’movement is going to depend on it’s new crop
prospects
European Financial Turmoil
Declining Muntok WP production from 30000 Mt to <10000Mt The gap in the global demand & supply is now met from Vietnam Black to White con ersionconversionChinese WP Producing plants damaged by typhoon
Vi Bl k D i i
Compiled : Sibi K Thomas
Vietnam Black pepper De‐corticationVolume increased to 30000 Mt
Indian BP crop is just enough to meet the internal demanddemand
Indonesian 2011 crop was just 13000 Mt and the carry over stock to 2012 season may not be more than 4‐5000 Mtthan 4 5000 Mt
Brazil production is constantly maintaining at p y garound 30000 Mt• 2011 crop was 30000 Mt. it is being catered to North American and EU regionand EU region.
Rapid Urbanization in Vietnam
Compiled : Sibi K Thomas
Quick Wilt becoming a concern in Vietnam
Cambodia is now producing 7000‐8000 Mt and do have a potential to produce significant volumes within the next 5‐7 years
Indian Spices Board’s Pepper rejuvenation programCoorg becoming a major producing hub, new growing areas in North Eastern states in India
African Initiatives by Corporates
Compiled : Sibi K Thomas
African Initiatives by Corporates
Sustainability????Sustainability????Population Growth Vs Pepper Consumption
P l i8.00350000
Global Pepper Consumption Mt World Population (Bn)
• Population Growth 20%
• Pepper1995‐5.00
6.00
7.00
200000
250000
300000
• Pepper Consumption Growth 88%
2010Compiled : Sibi K Thomas
2.00
3.00
4.00
100000
150000
200000
0.00
1.00
0
50000
1995 2000 2005 2010
Sustainability????Sustainability????Population Growth Vs Pepper ConsumptionPopulation Growth Vs Pepper Consumption
•If the same Growth for Pepper consumption continues for next 20 years!!
Next 20 Yrs9.00
900000
1000000
Global Pepper Consumption Mt World Population (Bn)
!!??•World need 800000 Mt Of Pepper???!!!
6.00
7.00
8.00
600000
700000
800000
900000
!!?? Pepper???!!!Compiled : Sibi K Thomas
2 00
3.00
4.00
5.00
300000
400000
500000
•Whether we have any solutions?Solutions??
0.00
1.00
2.00
0
100000
200000
1995 2000 2005 2010 2015 2020 2025 2030
•Coorg Model •Coorg produces 25000 Mt of Pepper mainly from
C ff Coffee shade treesCoffee Shade Trees
• No depletion of Virgin areas•More revenue for farmers•Vast growing regions‐South g g gAmericas, Indonesia, Vietnam, Africa……Sustainable
Compiled : Sibi K Thomas
Compiled : Sibi K Thomas