Black pepper prices remain high; may hit Rs 550 a kg

KOCHI: After crossing the 500 per kg mark, black pepper price looks to touch Rs 550 per kg as acute short supply and reports of a poor crop next season continue to pressure the market. Some traders feel even Rs 600 per kg is a possibility considering that harvest season is over a month away.

With prices at an unprecedented high, the exports too have suffered. Till August, pepper exports from India were up by over 30%.

Now, Indian pepper is ruling around $8,600 to $8,800 per tonne and is finding no takers. Meanwhile, the onset of winter in North India is expected to raise the domestic consumption, traders reckon.




"Normally, we get some quantity of pepper from the southern districts of Kerala during October-November. But that has not come as heavy rains earlier affected the flowering of the vines," said ML Parekh, former president of India Pepper and Spice Trade Association (IPSTA).

For the last season, the pepper production estimate was 55,000 tonne. But according to market sources, it could have fallen short by 5,000 tonne. The next crop is predicted to be lower. "Various reports from the growing regions estimate the production to be around 40,000 tonne,'' ML Parekh said.

Poor crop coupled with rising demand from North India could cause pepper prices to remain bullish till the next harvest. "The growers seem to be left with hardly any stock. The exporters are left with poor carryover stock. We feel Rs 550 per kg will be reached in the coming days," said CP Krishnan, whole time director of Geojit Comtrade. The price of garbled pepper in Kochi stood at Rs 518 per kg on Wednesday. What is worrying the trade is that 6,300 tonne of pepper are locked up in the warehouse of NCDEX as Food Safety and Standard Authority of India (FSSAI) seized it on complaints of mineral oil adulteration.

While the FSSAI says the contaminated lots should be destroyed, the NCDEX and traders have opposed it. The stalemate has affected the pepper trade in the country.

Global prices are also likely to remain bullish, as the crop in Indonesia is predicted to be lower next season.The output in Vietnam, however, is estimated to be closer to last year's level of 1.30 lakh tonne.