The black pepper market in India has been under several influencing factors recently, from reduced stocks in Assam to unpredictable weather conditions, all of which have impacted the yield.
Current Market Dynamics
Due to these challenges, pepper’s arrival at producer markets has reduced significantly, leading to a price surge, especially in North India. The appreciation of the Indian currency has further contributed to this trend, making it $0,84/0,90 more expensive on the international front. Consequently, it’s projected that local market prices could rise by $0,72/0,84.
Kerala’s Weather Woes
Recent climatic patterns in Kerala, combined with insufficient rainfall, have proven detrimental to the pepper crop. A late monsoon season further exacerbates this situation. Certain regions report completely dried crops, predicting a substantial statewide loss of around 27-28%.
International Influences and Local Response
On the global front, stricter regulations have reduced the import of cheaper black pepper from Vietnam. Additionally, a cessation of low-cost imports from Assam and a reduced stock from previous arrivals have heightened market demand. Prices have consequently risen by $0,12/0,18, reaching $8,04/8,10, contingent on quality. Moreover, limited imports from Cochin indicate prices may increase further, potentially by $0,72/0,84.
Broader Market Trends
Internationally, the surge in black pepper prices has led importers to rethink new deals. In the current scenario, Kerala’s black pepper, priced at $7,92, might soon reach $8,76. After enduring losses over consecutive years, many merchants commenced liquidating their stock. With no imminent fresh pepper harvests and the Cochin Line orders priced above $8,16, the older stock is likely to be exhausted in two months. Seasonal demand is anticipated to last until January 15th. Furthermore, a 20% decline in Vietnam’s shipments due to their own bullish market dynamics adds another layer to the supply constraints.
Conclusion
Last season saw decreased grain quality and productivity in key regions like Cochin, Shimoga, and Coorg, leading to an overall diminished yield. The upcoming harvest is also expected to be below par. With limited old black pepper stock remaining and India’s black pepper prices becoming increasingly competitive globally, the market exhibits no signs of slowing down.