Speculative buying lifts pepper prices to a new high of ₹570 a kg

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Rising black pepper prices — at ₹570 per kg for ungarbled varieties and ₹590 per kg for garbled in Kochi terminal market—have brought cheers to the farming community.

However, the farming community is unable to derive the benefit of the unexpected price hike in view of the crop shortage . The price increase in the last two days was ₹50 per kg, and market sources attributed it to speculative buying following the intervention of the North Indian lobby reported to be behind hiking turmeric and cumin prices, sources said.

Since prices are moving up on a daily basis, sellers have withdrawn totally, and only selective local small investors, who are holding their stocks, are releasing a small percentage at higher prices. It is pointed out that Delhi, Indore, and Jaipur, which are the major markets, have registered very high prices, and therefore end-users have been forced to cover small quantities from the spot market, sources said.

There are also reports of releasing small quantities of pepper, which was released by the Food Safety Department after detaining in warehouses, to the primary market dealers for interstate business.

Higher imports likely?

Kishore Shamji, a trader in Kochi, said Indian pepper has the highest price in the global market at $7,500 per tonne, followed by Sri Lanka at $6,000, Indonesia at $3,600, Vietnam, and Brazil at $3,500. The rising price of Indian commodities might pave the way for higher imports to meet the demand in the domestic market, he said.

Many small-scale pepper farmers are not in the possession of sufficient stock as they liquidated it to meet their immediate financial needs. Some farmers hold pepper as an investment to meet their requirements from time to time.  However, major tradersare now the beneficiaries of the price rise. The offered quantity in the terminal market for daily trading is also lower, in the range between 20–25 tonnes.

Since the next harvest season will start only in December-January, small-scale farmers will benefit only when the prices sustain at these levels until the year end. However, farmers are anticipating a lower crop this year due to climate change issues and heavy downpours in some growing regions. This would have an impact on production in the next season.