Pepper output likely to double next season

Local pepper production is likely to be double in the next crop season (December 2014-May 2015), according to estimates by exporters and growers. Spices Board estimates are a bit higher, at 70,000 tonnes. In 2014, total domestic production was just 30,000-32,000 tonnes.

Local traders and exporters say that a rise in production would impact the local markets, leading to a fall in prices. They expect a 30 -35 per cent drop in prices in 2015. In 2014, local prices touched an all-time high with ungarbled grade pepper fetching Rs 750 a kg. In the next season, this could dip to Rs 500 a kg.

One reason for the surge in output is that this year the climate has been relatively good, leading to flowering of pepper wines in most plantations in Kerala and Karnataka.

Vietnam production to drop
Global pepper prices are likely to be firm in the next season with Vietnam reporting a drop in production next year. According to early estimates from Vietnam, standing crop is likely to be lower 30 per cent than the last season and the overall output might be lower by 45,000 tonnes.

This means, Vietnam’s production could be in the 105,000-110,000 tonnes range next year. During 2014 season, Vietnam had a bumper crop of 150,000 tonnes.

According to the export data of Vietnam Pepper Association (VPA), the country shipped 126,350 tonnes during January-August this year. This indicates a smaller stock there, at about 25,000 tonnes.

Jojan Malayil of Bafna Exporters told Business Standard that a drop in production in Vietnam would be confined to 10 per cent, as harvesting will commence in new plantations from the next season. This would compensate the production loss in the old plantations, he added.

As production increases in India, the fall in the output in Vietnam will not affect the global supply much during next season.