Black Pepper 2007 Preview

The 2007 new crop of black pepper from India looks not so promising for domestic traders and exporters with diseases taking its toll on number of vines. Farmers also have not taken proper care of the crop due to the unremunerative prices and high wages. Farm gate wage of worker is almost U.S. $ 6 per day in india besides the cost of land has become so prohibitive for cultivation.
The crop in Karnataka, which in the recent years surpassed the biggest pepper producing state Kerala, is alarming. The southern part of Coorg may have 12,000 mt while the northern part comprising the major growing areas in the state output is likely to fall to 8,000 mt from 20,000 mt last year.
The major producing areas in Kerala, Idukki and wayanad are also expecting much lesser crop and the only promising area this year is the plains where pepper cultivation is scattered in many small holdings. As of now the Kerala crop will be only 25,000 mt while in the neighbouring state Tamil Nadu Gudallore appears promising with 4000-45000 mt. However Pattiveeranpatti, the other major production centre in TN output may stay flat.
We expect farmers to hold most of the stocks in 2007 due to the good amount of iron stocks lying in northern India and heavy selling by farmers at the recent bull run. In all probability 2007 is going to turn out as an year of expectation for pepper farmers as we have seen the 10 year cycle performing very well with regard to prices from 1957 till 1997.
With producing countries Malayasia and Indonesia slowly going out of pepper cultivation and the entire world relying on one producing nation Vietnam who are yet to learn the way of holding stocks like Indian and Brazilian farmers, 2007 will be very interesting for pepper growers, traders, exporters and importers. Apart from Vietnam the other pepper growing countries are rapidly developing economically, which has pushed up the labour charges. The fertility of the soil has fallen sharply leading to complacency in replanting and proper farm-care for current holdings.
One should not forget that India still has 35000 mt of pepper stocks lying with farmers, traders and commodity exchanges of which 20000 mt will not be shown to the world as Black gold has really helped the farmers and traders in the past. The present activities in the national commodity exchanges where they trade 35000 mt on an average can influence the pepper market to a greater extent in the coming days.
Best regards
Jojan