India’s pepper market is experiencing a tumultuous period as heavy rains and a surge of cheaper imports from Sri Lanka weigh heavily on prices. In North Indian cities, relentless downpours have dampened consumer demand, impacting the Kochi terminal market significantly. The Indian Pepper and Spice Traders Association (IPSTA) reports that prices for ungarbled pepper varieties have plummeted to $7.80 per kg, though a slight recovery to $7.87-$7.94 per kg is underway. Idukki grades, known for their superior quality, are now quoted at $7.98-$8.05 per kg.

The market has seen a traded quantity of 20.5 tonnes this week, with total pepper arrivals reaching 181 tonnes—a 37-tonne increase from the previous week. This uptick in supply amidst weakening demand has further pressured prices.

Kishor Shamji, Director of IPSTA, highlights a critical issue: Sri Lankan pepper, available domestically at significantly lower rates of $6.30-$6.50 per kg, has flooded the market. Despite its lower bulk density and higher moisture content, end users are opting for Sri Lankan pepper due to its cost advantage. Reports suggest that some importers are blending domestic pepper with the imported variety to enhance bulk density, exacerbating the pricing pressures.

Heavy rains have not only reduced consumer demand but also disrupted procurement activities across various consuming industries in Kerala markets. This adverse weather is expected to affect pepper production in the upcoming season, adding another layer of uncertainty to the market.

Moreover, landslides in Wayanad have inflicted considerable damage on the pepper crops, though the full extent of the loss remains to be assessed. Kishor Shamji notes that many farmers in Wayanad are shifting to alternative crops and tourism-related activities, converting their lands and thereby reducing the region’s pepper output. Given Wayanad’s importance as a key pepper-producing area in Kerala, this shift could lead to significant supply constraints and potential losses.

As the market grapples with these multifaceted challenges, the future of pepper production and prices remains uncertain. Industry stakeholders are closely monitoring the situation, as any changes in weather patterns or import dynamics could further influence the market. The intersection of environmental factors, market forces, and shifting agricultural practices presents a complex landscape for India’s pepper industry, one that will require adaptive strategies and vigilant oversight to navigate successfully.

Source: Commodity Board