Black pepper prices lose sting on surging imports, subdued demand

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A sluggish demand coupled with rising imports has hit black pepper prices, registering a ₹17 per kg drop in the last two weeks.

Traders in the terminal market said heavy arrivals of 4,422 tonnes imported pepper from various countries have impacted domestic prices. Sri Lanka is the leading country for imported stuff followed by Brazil, Vietnam, and Indonesia.

These imports, they said, have created a glut in the domestic market forcing the consuming industry to hold back their buying anticipating further drop. Some of the industry buyers reported to have purchased October, November forward deliveries at discounted prices (without carrying cost).

Geopolitical situation

Kishore Shamji, Director of the Indian Pepper and Spices Trade Association, said pepper prices in the domestic market are ruling at ₹646 for ungarbled varieties and ₹666 for the garbled ones. In contrast, the price of 500 GL stood at ₹636. The domestic market is also witnessing subdued demand despite the start of the festival season in North Indian markets. This, according to Shamji, is mainly because of the availability of cheaper imported stuff which is ₹25 per kg less than the domestically produced.

A sluggish Chinese demand for black pepper has also hit exports from Vietnam which usually ships around 60,000 tonnes per year. With declining buying activity in China, the emerging situation has facilitated Vietnam pepper to find inroads in the Indian domestic market, he said. However, the war-like situation in West Asia has also led to a delayed buying from the US and European consumers, prompting the trade to hold the stock, he said.

According to Shamji, the Indian Pepper and Spice Traders, Growers, Planters Consortium has submitted a representation to Aparajita Sarangi, MP from Bhubaneswar Constituency, highlighting the impact of imported pepper into the domestic market. The association also urged the DGFT to have a relook at the import policy for the benefit of the Indian farming community. They pointed out that the slipping of such imported pepper into the domestic market is hitting the farmers badly.