Low production, high demand may fuel a price rally in black pepper

KOCHI: Lower than expected production and robust demand may fuel a price rally in black pepper after April, when the current harvest season ends in the country.

Going by the trend of arrivals, Indian black pepper processors and exporters have projected a crop of 40,000 tonnes in the current season, about 25% less than 53,000 tonnes forecast by International Pepper Community ( IPC), a global inter-governmental organisation of pepper producing countries.

High prices have already made Indian pepper uncompetitive in the global market. The exports have held steady on imported pepper from Vietnam and Sri Lanka. “While Vietnam has produced a bumper crop of 1.5 lakh tonnes, the Indian output will be sufficient only for domestic consumption,” said Prakash Namboodiri, general manager business development and commercial of exporting firm AB Mauri India.

Inclement weather has hit output from Kerala and production is currently dependent on arrivals from Karnataka. The prices had reached a high of Rs 765 per kg, before dropping. The current price is around Rs 625 in the spot market.