Commodity News

Black Pepper Prices Remain Stable Due to Low Demand

black pepper

Despite poor rainfall in the pepper growing areas, the domestic black pepper prices remain more or less stable due to low demand in the upcountry markets. The farm gate cost of ungarbled black pepper is floating in the range of Rs 325 to 350 per kg since April to May that was Rs. 30 lower than the corresponding period in 2018, which was Rs. 370. Kishore Shamji of the Kochi-based Kishor Spices said that the current price trend is expected to continue for the time being.

Because of poor offtake traders are stuck with the stocks. Growing heat wave conditions in several parts of North India has also slowed down the demand.

Although flowering took place in many growing regions but lack of rainfall has affected the pollination which usually takes place via rain water. As the crop has been affected, cultivators are hesitant to sell their stocks, which will have an impact on production this year (in the range of 47,000 tonnes as against 55,000 tonnes last year).

Shamji said, “It could be further down next year but it is too early to forecast. It all depends on the progress of monsoon in growing regions”.

black pepper

He was also worried over the falling global prices as it may lead to flooding of low-priced Sri Lankan pepper in the domestic market under the ISFTA. On one side the import of Vietnam pepper via Sri Lanka has dropped due to strict vigil while on the other side, the illegal pepper shipments via Nepal is on the rise.

Chairman of All India Spices Exporters Forum Rajiv Palicha said there is a difference in prices between Vietnam Afta grade and Indian product that is selling at $6,100 per tonne against $2,500 per tonne of Vietnam & Indonesia & $2,300 per tonne of Brazil. But, there is enough availability in the domestic market to meet the requirements of the industry.

Palicha said global prices at present are competitive because of the supply situation and it is favorable for Indian pepper industry to look for overseas markets. To attain this, he said, output should improve and new farm technologies need to be adopted.

Sources in the spice industry said that the global prices are down because of higher production in many countries compared with India. According to available figures, the world pepper output is expected to reach over 6 lakh tonnes that is higher by 8.25% than the previous year.  Sources added that the rates in other countries are governed by the international supply & demand but in India, it is on account of the strong domestic market & the cost of pepper is a standalone phenomenon here.



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