Agri Business

Black pepper prices top ₹400/kg-mark on supply crunch, ​rising demand

V Sajeev Kumar Kochi | Updated on June 11, 2021

Arrivals of increased Sri Lankan produce, a concern for trade

After a gap of two years, black pepper prices have breached the ₹400 per kg-level for ungarbled varieties in the Kochi terminal market. The prices reached ₹405 per kg on Thursday, while garbled grades hit ₹425.

Traders attributed the reasons for the price rise to supply crunch in the market following the lockdown restrictions due to closing down of primary pepper markets in many rural areas. This, coupled with a good demand for the raw materials from masala manufacturers, has led the prices to move up.

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Kishore Shamji, a spice trader in Kochi said the government order in allowing the primary markets of spices to function itself is contradictory. On the one hand, it allowed masala manufacturers to function, while on the other, primary spice markets have been barred from opening shops. This has hit the timely availability of raw materials to masala makers, he said.

SriLankan imports

Shamji also raised a concern over the possibility of increased Sri Lankan pepper arrivals into India this year, taking into account the International Pepper Community figures submitted at the American Spice Trade Association meeting in May. It was pointed out at the meeting that Sri Lankan production would be 25 per cent more in 2021 at 25,000 tonnes in addition to the carry forward stock of 12,000 tonnes from 2020. Sri Lankan home consumption of pepper is reported to be 12,000 tonnes.

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Therefore, it can be presumed that the 2021 crop from the neighbouring island nation would be available for exports. Looking at the international price scenario, which is declining, there is every possibility that this pepper may find its way into India. Quoting January-April figures this year, Shamji said Sri Lankan pepper arrivals into the domestic market was 4,000 tonnes — the highest in the last three years.

Shamji, quoting reports, said Vietnam government has asked farmers not to expand their pepper crop to avoid oversupply in the market. In view of a glut in the market, local prices have dropped to $3,700 per tonne from $4,000. Even at this level, Shamji said it is below their cost of production.

Published on June 11, 2021

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