DEMAND FOR PEPPER

Te Awamutu Courier, Volume 81, Issue 7252, 15 September 1950, Page 7

DEMAND FOR PEPPER

PRICES SOAR REASON FOR PRICE INCREASES Pepper, which in pre-war years sold at less than 50s per cwt, and is currently quoted at 1948 s per cwt, is unlikely to become cheaper in the near future, according to a letter received in Auckland from the Singapore exporting firm of N. V. Java Sumatra Handelmaatschappij. Accusations that the high prices of pepper and rubber were due to dealers withholding ■stocks had been proved wrong, stated the letter, as recent rises had been caused by an unwise buying policy on the part of the manufacturers. When pepper prices dropped considerably in May and early June, says the letter, buyers held off in hopes of lower prices, and holders in Singapore had to accept lower bids and suffer serious losses. About the middle of June orders suddenly poured in, and as the demand soon exceeded the supply, prices went up. Low Stock Levels The invasion of Korea during this period was another stimulating factor to prices. Stocks of pepper held by the trade at world centres are very low, and when something happens in the political field buyers become alarmed and purchase at any price. Stocks held by the London trade at the end of May were 103 tons of black pepper and five tons of white pepper, while *New York stocks at the same time were only nine bags of black pepper. Although supplies of black pepper showed signs of improving, says the letter, the position for white pepper was bad, as there were only small arrivals of about two bags a day, which were snapped up by the trade at constantly increasing prices. “This morning,” writes the firm, “we did some business with Europe at a price equivalent to 1876 s per cwt, c.i.f., New Zealand ports, but now, at 4 o’clock in the afternoon, business has already been done at 1948 s per cwt. This is a very high price, but even at this limit there are no sellers, because of the very bad supply position. And this is again due to the trouble and unrest in Indonesia.” Pepper has been one of the world’s chief spices for many hundreds of years, and its exorbitant price in the Middle Ages was one of the inducements which led the Portuguese to seek a sea route to India. The normal pre-war production of about 65,000 tons came mainly from the Netherlands East Indies and the Malay States, with lesser amounts from India and Indo-China. During the Japanese occupation of the East Indies, about 90 .per cent, of the vines were destroyed, and production in post-war years has failed to meet demand..

Black pepper, which is currently quoted at 1115 s per cwt, against 1948 s for white, consists of the whole dried berry, while white pepper is the seed freed from the shell and fleshy part of the fruit.