Market Intelligence Centre - Kerala Agricultural University

 

Pepper Price Forecast - October 2009

 

PRODUCERS ADVISED NOT TO HOLD BACK PEPPER STOCK

 

Black Pepper, known as the king of spices, is a perennial climbing vine grown for its berries extensively used as spice and in medicine. Pepper has been a popular spice since prehistoric times. It was probably first cultivated on the Malabar cost of India in what is now the state of Kerala. As of 2008 Vitenam is the world’s largest producer and exporter of pepper, contributing around 34 per cent of the world production. Other major producers include Indonesia (9%), India (19%), Brazil (13%), Malaysia (8%), Sri Lanka (6%), Thailand (4%) and China (6%). Global pepper production peeked in 2003 with over 3,55,000t  ( 391, 00 short tons), but has fallen to just over 2,71,000t ( 2,99,000 short tons) by 2008 due to a series of factors like poor crop management, disease and weather related set backs.

 

India is a leading producer, consumer and exporter of black pepper in the world. During 2005-06, 16,700 tonnes of black pepper products worth Rs. 14050 lakhs were exported to various countries accounting for 6 per cent of export earnings among spices. Black pepper is cultivated in Kerala, Karnataka and to a limited extent in Tamil Nadu and other states. The crop is grown in about 2,46,000 hectares with a production of 69,000 tonnes annually. Kerala and  Karnataka account for a major portion (92 %) of production of black pepper in the country.

 

·         The pepper harvest season in India will commence in January and bulk market arrivals are expected from February onwards

·         Generally, September, October and November are months of low arrivals for Indian markets. The carry over stock of pepper from the last harvest in India is learnt to be below 10,000 tonnes, which is a small trade volume as per trade sources.

·         The Export and Import Houses are likely to take a long position for their commitments in view of low physical arrivals. This is reflected in the futures price hovering steady around Rs. 141 per kg for October, November and December months

·         It is learnt that the Vietnam Pepper Association has advised its members not to sell pepper aggressively from April onwards. This is also expected to shift overseas buyers to the Indian markets.

·         Crop Prospect estimates indicate that the crop stand and berry setting during the current year in Vietnam and Indonesia is not very encouraging.

 

The Market Intelligence Centre of Kerala Agricultural University under ICAR assisted NAIP project views that the buoyant phase in black pepper will last during the months of October, November and December. The prediction is based on the month wise time series price data at Kochi market for Ungarbled Malabar Pepper (for a period of 15 years from 1995 onwards) which is the major market in India for black pepper. According to the study, the prices will hover around Rs.138 toRs.145 per kg till October 2009. This is expected to come around Rs. 132-140 per kg, in November and Rs. 131-138 per kg December 2009. Hence pepper growers are recommended to sell their produce before end of December2009.