Product Profile: Pepper

HS CODE (including Black Pepper): 090411
• The global black pepper market is estimated to be valued at US$ 3.7 billion, estimated to grow at a CAGR of 6.1% over the forecast period to reach over US$ 5.7 billion by the end of 2024.
• Global demand for pepper is increasing in a number of categories like cosmetics, bakery and confectionery products, essential oils, etc., making it tough for supply to catch up.
• In 2018, pepper exports from India plummeted by approximately 35 per cent compared to 2016 to 16,840 tonnes, the lowest in recent times.
• India needs to urgently boost its competitiveness in the face of the fierce challenge from exporters like Vietnam, Indonesia and Brazil.

TPCI-IBT-Business-Perspectives

Black pepper, commonly called the King of spices or even Black gold, is the most germane and commonly used spice, which occupies an exclusive and unique position in the world. In India, Kerala is the native place of black pepper, contributing most of the country’s area under cultivation and production for the crop.

US, UK, Germany, India, Vietnam, Netherlands, France, Egypt and Japan are the major global importers of black pepper. India ranked at the topmost position in global pepper production until the late 19th century, but lost its position to other nations like Vietnam, Indonesia and Brazil. Major exporting destination of India include US, UK, Sweden, Italy, Germany, France and Netherlands.

The current supply is not able to meet the global demand, which has made exports more profitable. Conversely, this has led some of the countries to focus on black pepper export by increasing the area, output and yield. Increasing demand from Far East countries, which have started using more pepper in cooking, has been quite vital in influencing the global black pepper market. Growth in the cosmetics industry is also directly influencing the pepper market. Due to the antioxidant and antibacterial properties of black pepper, it is often used as an ingredient in skin care products.

Also, black pepper is one of the healthiest spices relative to other seasonings. The currently surging usage of black pepper in bakery and confectionery products such as cakes, chocolates, and snacks is proliferating the global demand of the black pepper market. For instance, black pepper is used in rosemary bread, garlic bread and other bakery products. Manufacturers are also focusing on new product innovations such as pepper spray, essential oils and fragrances. They are also focusing on innovative packaging of black pepper powder as it has capacity to fetch higher prices.

Unfortunately, the demand-supply mismatch has proved to be a major constraint in this market. This is majorly due to the intensive crop losses in various parts of the world, especially in India & Brazil. Sudden climatic changes and untimely rainfall have significantly led to the fall in the yield of black pepper.

Top exporters of pepper incl. black pepper

Exporters Exported value in 2016 Exported value in 2017 Exported value in 2018
World 2615.417 1964.62 1312.669
Viet Nam 1233.929 849.728 501.844
Brazil 246.501 273.889 194.834
Indonesia 416.581 228.357 147.389
Sri Lanka 68.052 79.126 85.783
India 98.396 69.336 51.086
Germany 73.978 65.839 45.492
Malaysia 98.772 58.201 38.076
UAE 63.041 55.613 31.542
France 27.07 34.333 22.676

Source: ITC TRADE MAP, figures in US$ million

From this table it can be observed that economies like Sri Lanka, France, Germany and Brazil have experienced a positive exponential growth rate from 2011 to 2018. But overall, there is a sharp fall in the global exports of pepper including black pepper from 2017 to 2018. India too experienced a drop in exports of pepper worth US$ 18.1 million for that period, but more worrying are the continuous decline in exports of this product mainly after 2015.

In fact, India’s exports of pepper including black pepper have declined by 10.4% exponentially since 2011. Also from the point of view of exports in quantity terms, India’s quantum is lower for 2017 and 2018 as compared to 2015 ad 2016. This clearly indicates that our processes are not competitive compared to those of Viet Nam, Brazil and Indonesia.

In 2018, pepper exports from India plummeted by approximately 35% compared to 2016 to 16,840 tonnes, the lowest in recent times. In 2018-19, according to the Spices Board, export shipments fell over 25% year-on-year in the nine months up to December 2018. Majority of the shipments from India are value added exports of imported varieties, mostly from Vietnam. To be more specific, Vietnam is selling the commodity at US$ 2,800 per tonne, way less than US$ 6,000 per tonne commanded by the Indian variety.

Top importers of pepper (incl. black pepper)

Importers Imported value in 2016 Imported value in 2017 Imported value in 2018
World 2276.043 1817.613 1270.341
USA 490.205 383.254 221.393
India 183.172 164.898 136.105
Germany 241.562 188.827 108.735
Viet Nam 111.271 61.437 87.82
France 83.142 60.305 39.631
Egypt 54.219 55.568 37.503
United Arab Emirates 81.577 63.959 35.347
Netherlands 63.862 45.559 34.213
Pakistan 41.579 37.361 30.151
Japan 58.948 39.242 29.541

Source: ITC Trade Map, figures in US$ million

The black pepper market demand for principal usage is increasing as manufacturers are speedily producing new varieties in seasonings and blends to increase their product portfolio. The demand for whole black pepper is more in the Asian region because of Vietnam, Indonesia and India having their own production and manufacturing centres, which are heavily working towards the production of high-quality black pepper and essential oil.

The segment is expected to create absolute business opportunity of more than US$ 900 million between 2019 and 2024. Also, organic way of production is the one efficient method to save the environment and preserve the ecology. It is a commercially life-saving option for farmers because organic products will fetch a premium price at lesser production cost, which is being promoted through the agri-export policy as well.

Pepper has become a valuable commodity in the international market as it is highly used in food as well as other products like pharmaceuticals and cosmetics. Exporting of processed goods from the country has an optimistic prospect, as it is expected to lead to greater foreign exchange earnings for the sector.

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vipul
vipul
1 year ago

update this data

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