India - Poor demand keeps pepper prices stable

Kochi  July 15, 2019

Despite the monsoon playing truant in the pepper growing regions, domestic black pepper prices remain more or less stable because of low demand in the upcountry markets.
The farm gate price of ungarbled black pepper is hovering in the range of INR 325-350 a kg since April-May, which was INR 30 lower than the corresponding period last year, which was INR370.
The current price trend is likely to continue for the time being, said Kishore Shamji of the Kochi-based Kishor Spices.


Poor offtake

Traders are stuck with stocks due to poor offtake.
Heat wave conditions in many parts of North India also slowed down the demand, he told BusinessLine.
Though flowering has happened in many of the growing regions, absence of rains has affected pollination which normally takes place through rain water.
As the crop is affected, farmers are hesitant to sell their stocks. This will have an impact on production this year, which is likely to be in the range of 47,000 tonnes as against 55,000 tonnes in the previous year.
“It may be further down next year. It is too early to predict. It all depends on the progress of monsoon in growing areas,” Shamji added.
Shamji also raised apprehension over the falling international prices as it may lead to flooding of cheap Sri Lankan pepper in the domestic market under ISFTA.
While the import of Vietnam pepper through Sri Lanka has come down due to strict vigil, the illegal pepper shipments through Nepal is on the rise, he alleged.

According to Rajiv Palicha, Chairman, All India Spices Exporters Forum, there is a disparity in prices between Vietnam Asta grade and Indian product, which is selling at $6,100/tonne against $2,500/tonne of Vietnam and Indonesia and $2,300/tonne of Brazil.
However, there is enough availability in the domestic market to meet the requirements of the industry.
International prices are now competitive because of the supply situation and it is opportune for Indian pepper industry to explore overseas markets, Palicha said. To achieve this, he said, productivity should improve and new farm technologies are to be adopted.

Higher output

Sources in the spice industry pointed out that the international prices are down due to higher production in many countries compared with India.
As per the available figures, the world pepper production is expected to reach over six lakh tonnes, which is higher by 8.25 per cent than the previous year.
According to sources, the prices in other countries are governed by international supply and demand, while in India, it is on account of the strong domestic market and the price of pepper is a standalone phenomenon here.

V Sajeev Kumar Kochi | Updated on July 15, 2019 Published on July 15, 2019
Source:
https://www.thehindubusinessline.com/markets/commodities/poor-demand-keeps-pepper-prices-stable/article28446620.ece


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