ABSTRACT
This chapter focuses on analyzing and forecasting supply and demand of pepper. The first three sections deal with a description of the pepper economy and the model applied to analyze the pepper economy. Second and third sections concentrate on supply and demand respectively, while the fourth focuses on prices and equilibrium in the market. The model used for the current paper is a somewhat revised, extended and updated version of the model described in Bade and Smit (1992). At that time it was the first detailed model for the pepper economy. Data and time constraints did not allow a further and more in-depth analysis. Such an analysis is clearly called for when more sound policy conclusions are to be drawn up. Projections for the pepper economy are presented in the subsequent section. The model in mathematical terms is described in the Appendix A. Appendix B gives the outlook for the world economy which is a basis for the outlook for the world pepper economy.
