Pepper Market Analysis: Tight Supplies and Strong Festive Demand Keep Prices Elevated

Global pepper markets are demonstrating remarkable resilience in the face of tightening supply, sustained local and international demand, and evolving weather dynamics. In southern India, especially Kerala, favorable but drier-than-expected weather has tilted the balance in favor of higher prices, as fresh arrivals remain sparse. Market sentiment has notably strengthened — helped by the scarcity of new stocks and festival-driven buying that underscores the pepper market’s role as the spice trade’s bellwether.

Exporters in Kochi are capitalizing on this environment, securing robust buying interest from major destinations like Vietnam and Sri Lanka, even as they too face constrained supplies. International buyers, notably from the U.S. and Europe, have intensified inquiries, teeing up firmer price expectations in the lead-up to the key festive season and closing quarter. Kerala’s production shortfall (20–25% below prior estimates) amplifies the likelihood that prices will remain firm, as arrivals are currently running at only half the anticipated volume. The International Pepper Community (IPC) also anticipates persistent tightness in 2025–26, supporting the bullish flavor in price forecasts and export opportunities for Indian handlers in a globally competitive market.

📈 Prices

Product	Origin	Location	FOB Price (€/kg)	Previous Price	Update Date	Sentiment
Pepper powder (black, organic)	IN	New Delhi	8.83	8.80	2025-08-30	Firm
Pepper (white whole, organic)	IN	New Delhi	7.10	7.07	2025-08-30	Firm
Pepper (green dehydrated, organic)	LK	Sri Jayawardenepura Kotte	8.53	8.50	2025-08-30	Steady
Pepper (black whole 500 g/l, organic)	IN	New Delhi	8.13	8.10	2025-08-30	Firm
Pepper (black 600 g/l, clean)	VN	Hanoi	6.46	6.43	2025-08-30	Steady

🌍 Supply & Demand

• Kerala’s current arrivals of black pepper are only 50% of usual expected volumes, supporting tightness in the market.
• The 2025 Kerala crop is projected to be 20–25% lower than initial estimates due to suboptimal weather earlier in the season.
• Strong domestic festival-driven buying and increased export demand (especially from Vietnam and Sri Lanka) underpin price firmness.
• International interest from U.S. and European buyers has risen, anticipating festive season requirements.
• Vietnam’s supply situation remains tight, further supporting Indian exports.

📊 Fundamentals

• Kerala and southern India: Limited fresh arrivals, below-normal production, tightening domestic and exportable supply.
• Kochi black pepper market at $740–$750 per 100 kg (approx. €6.75–€6.84/kg) reflects ongoing stability and mild upward momentum.
• Domestic black pepper price (average): $4,950–$5,000/ton (€4.59–€4.63/kg), with expectations pointing toward further support.
• Competitive Indian export parity sustained versus Vietnam, whose supplies are also reduced.
• IPC forecasts further global supply tightness in 2025–26.

⛅ Weather Outlook

• Kerala & Southern India: Current weather is favorable for pepper, with reduced rainfall lowering the risk of fungal diseases and benefitting harvest conditions.
• Short-term forecast (3 days): Predominantly dry with scattered light showers, temperature steady (28–31°C), excellent for harvest and drying.
• Extended dryness could limit recovery of late-season crop volume, maintaining supply tightness until November.

🌏 Global Production & Stock Comparison

Country	2025 Forecast Prod. (‘000 tons)	2025 Stocks (‘000 tons)	YOY Trend
India	56	13	⇩ (-20% prod.)
Vietnam	210	32	– (Tight/steady)
Sri Lanka	22	7	⇩ (Lower yields)
Brazil	86	18	⇨
Indonesia	40	6	⇨

📆 Trading Outlook & Recommendations

• Buyers: Secure short- to medium-term needs promptly as supply constraints will likely push prices higher until November.
• Exporters: Favorable moment for Indian shippers to capitalize on tight global supply and competitive pricing versus Vietnam.
• Speculators: Opportunities exist for price appreciation until arrival volumes improve post-November.
• Monitor guidance from the International Pepper Community (IPC) and upcoming Indian government crop forecasts for potential shifts.
• Watch for any signs of rapid weather deterioration in Kerala, which could hasten further price surges.

🎯 3-day Regional Price Forecast

Location/Market	Current Price (€/kg)	Forecast (€/kg)	Sentiment
Kochi (IN) – Black Pepper (500g/l clean, organic)	8.13	8.20–8.30	Firm ↗
Hanoi (VN) – Black Pepper (600g/l clean)	6.46	6.50–6.60	Steady/Firm
New Delhi (IN) – White Pepper (whole, organic)	7.10	7.10–7.20	Steady

Prices are expected to remain strong, supported by supply shortfalls and active demand from both domestic and international markets.