Pepper price upside may not be as large as last year

Now with the harvest of pepper is over in March, provisional production data of pepper production is estimated at 55,000 tonnes for 2016-17. Though the production is a little more than that of 2015-16 (which stood at 48,500 tonnes), the price appreciation of Inidan pepper is unlikely to be higher.

The price movement of pepper depends on factors like import from Vietnam or other pepper producing countries, domestic demand, demand from raw pepper consumers like MDH, Everest and British Spices.

The movement of pepper price during the previous three years shows that the price of the commodity went up by Rs 100 per kg during August-September period as compared to March-April of those years. It is mainly becuase North Indian cities use pepper for the grinding industry which usually opens during August. This had made farmers to hold the stock till September-October.

According to a leading trader in India, price advantage tempt manufacturers to import black pepper. Imported pepper in North Indian cities is available at price lower by Rs 200 per kg than the price of domestic produce.

The trader, who procures domestic pepper for manufacturers, said that this year ample supply is expected from Vietnam. This may limit the appreciation of the price of pepper in the domestic market.

He further said that the import of pepper from Vietnam was increased during November-December of 2016 as the industry felt that Indian variety is more expensive. So it curtailed the domestic price rise in last six months. “Ban on Vietnam import is also lifted so we don’t see much appreciation on Indian pepper price,” he said.

Import is done primarily to make value-added items such as oil and oleoresin. These value-added products are then export to EU, Australia and the US.

India had recorded a highest pepper production of 70,000 tonnes during 2014-15. Replying to a question in Lok Sabha on august 8 2016, the Union Minister of State for Commerce Nirmala Sitharaman had stated that pepper production has been showing fluctuating trend for the past three years on account of drought and untimely rain.

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