Market Intelligence Centre - Kerala Agricultural University

 

Pepper Price Forecast - January 2010

 

 Pepper season starts with a cheer amidst hectic speculations: Pepper farmers advised to wait till April

 

India is the traditional home of major spices. She has the privilege to enjoy a dominant position in production, consumption and export of spices and spice products. According to the latest statistics available, the area under cultivation of spices in India has increased from 2448 thousand hectares in 2006-07 to 2603 thousand hectares in 2007-08 and the production during the corresponding period has increased from 3953 thousand tones to 4103 thousand tones (Government of India, 2009).Among the Indian spices, black pepper occupies a position of key eminence in the spices export basket.

 Traders’ survey indicates that there are conflicting reports about the anticipated output of pepper this season by different sources, aimed at influencing the prices. The anticipated output of Indian pepper this year is reckoned approximately at 50, 000 tones, considering all the above aspects. The quick recovery from recession by the European countries and the US should help to stimulate more export demand, but the exporters and importers are moving cautiously in view of rupee getting stronger, and the Indian pepper price ruling higher than the price of other producer countries. Trade circles also indicated that trade enquiries for Indian pepper are low this season as compared to the last year. It is against this background that the Agricultural Market Intelligence Centre of the Kerala Agricultural University attached to the Department of Agricultural Economics, College of Horticulture studied the price behavior of Indian pepper based on the monthly time series data at Kochi market for Ungarbled Malabar Pepper for a period of 15 years from 1995  January onwards. According to the study, the price of Indian pepper will hover around Rs. 128-140 per kg during the early pepper season starting from January to March, which synchronizes with the maximum market arrivals. This is a period when the export houses are becoming more active, making strategic moves to maintain their stocks, consistent with their foreign enquiries and commitments. Therefore, this period is likely to witness high degree of speculative activities also.

 

The price predicted by the Centre for the next five months are as follows:

 

 

 

 The pepper producers are therefore advised not to get panicky by the quick price shifts and market activities during the initial period of the new season. They are advised to store their pepper, and wait till April when the market situations may appear more bright and promising.