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Pepper prices to remain below Rs.400

Press Release

Pepper, known as black gold, is a commodity of commercial importance globally.  Kerala accounts for about 60 percent of India’s pepper output followed by Karnataka and Tamil Nadu. In Karnataka the major production is from Chikmagaluru, Kodagu, Hassan, and Uttara kannada.

Demand for Indian pepper in the international markets remained low due to price disparity. Pepper shipments from India to the international market were being quoted at $8,475-8,600 a tonne, while Indonesia and Vietnam were offering about $ 1500/tonne lower than this. Global pepper production this year is expected to increase 7.2 per cent to 3.20 lakh tonnes with a sharp rise in Brazilian, Indonesian and Vietnamese output.

Domestic consumption in 2012 has been put at 42,500 tonnes while the exports have been estimated at 17,500 tonnes. The Consumption of pepper is growing not so much with increased population but major changes in international eating habits. India has slipped to the fifth position in the global pepper exports market, behind Vietnam, Indonesia, Brazil and Malaysia, according to the International Pepper Community’s (IPC) estimates for this year. Last year, India was fourth on the list, according to IPC data.

Higher arrivals of the crop in International markets have been preventing prices from shooting up a lot even as demand picked up moderately. Better crop expectations from Indonesia and Sri Lanka and sufficient stock levels in Vietnam have also prevented the rates from increasing.

Pepper futures may decline due to weak export demand for India’s produce, and rise in imports of the spice at lower rates from Sri Lanka and Vietnam. Meanwhile, tight supply in domestic markets and good domestic demand ahead of festivals could limit fall in pepper prices. According to report from traders, India’s pepper import in 2012-13 is expected to increase 50 percent to around 26000 tonnes compared with last year.

The NAIP – Market Intelligence Center of the University of Agricultural Sciences, Bangalore collected data on Black pepper prices from Gonikoppal and Sakaleshpura markets for the last eleven years and using econometric analysis and trader’s survey, the prices are predicted up to March 2013.  The prices of black pepper are likely to be hover around .360 to .390 per Kg during the harvest period. The good crop prospects and lower uptake from international buyers would keep the prices from not crossing Rs.400 mark. This forecast prevails for current market sentiments and could vary with changes in the market situation and exim policies. Farmers are advised to release stock slowly into market to keep prices firm. The escalation in cost of production of black pepper also has put pressure on spot pepper prices this year.

The current price of black pepper in Gonikoppal market is Rs.380/kg and that of Sakaleshpur it is between Rs.360-380/Kg.

 

Research team

Dr.C.P.Gracy., Nagashree, N.,Jyoti Nayak

Department of Agricultural marketing co-operation and business management,UAS,GKVK,Bangalore -65 

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Please note that this is the opinion of the author and is Not Certified by ICAR or any of its authorised agents.