Pepper output to fall 40% even as global market sits pretty

The global black pepper market is unlikely to face a supply crunch this year, according to the latest crop and stock estimates from various producing countries. However, according to growers in Wyanad and Idukki in Kerala, there will be a drop of 40 per cent in production in the next season that begins by December.

India is, thus, bound to have a different market situation compared to the global trend on lower production and good domestic demand.

With higher price tags ($3,525 a tonne), India is no longer a leading player in the global market. India’s stock position is weak and comexes hold almost 100 per cent of the exportable stock. Farmers are devoid of stock as a major chunk of last year’s crop has already been sold.

Though global prices may come down further with the arrival of fresh crop from Brazil and Indonesia, Indian tags will not follow suite because of the domestic winter demand. However, India hardly has stocks to meet the winter season demand, a leading Kochi-based exporter said.

Reports from Vietnam say the country still has a stock of around 50,000 tonnes, including a committed stock of 10,000 tonnes, after exports of 58,000 tonnes in the April-July period.

The crop estimates of Brazil indicate a total production of 35,000 tonnes in the current season. But, what could affect the market is the pepper output from Indonesia.

According to various sources, Indonesia is likely to have a crop size that varies between 15,000 and 20,000 tonnes. Some even estimate it to be around 22,000 tonnes. Even then, doubts remain about Indonesia’s carryover stock. A section of Kochi-based exporters feel the country has a carryover stock of nearly 6,000 tonnes which might be the committed stock sold earlier in the year to the US.