By Devendra Vyas
A strong undertone lies in the black Pepper market in the time to come. Pepper prices are likely to rule firm to upward and even can see new heights by the end of the current season following the various problems faced by the producing states. Apart from the orthodox locations in pepper production, new areas in the same line are also upcoming in new regions of North-Eastern states. There are contradictory views on the role of comexes with a section saying they merely act as speculators as well as gamblers which should be regulated properly.

According to Mr. T. Vidyasagar, a Kochi based pepper exporter, pepper production in Kerala, leading producing state, is on decline now and Coorg region of Karnataka will shortly surpass Kerala in pepper production. Quality and quantity both are good of the new region. Pepper farming in Coorg has started on plantation way and on large scale basis against Kerala’s small individual farm basis. Some diseases have been reported in Waynad and Idukki, main pepper producing regions of Kerala.

He added that pepper farmers have continuously been ignored depriving them from basic facilities like pepper washing, cleaning etc and the necessary infrastructures should be provided to induce pepper growth. The ideal strategy is to concentrate on other states like Tamil Nadu, Andhra Pradesh, Assam and other Northeastern states instead of over dependence on Kerala.

Pepper production in India (tonnes)
Annual                    50,000 / 55,000
Kerala                     25,000
Karnataka(Coorg) 20,000
Tamil Nadu             5,000
Others                     5,000

Kamlesh Tanna, a stockist-cum-exporter and ex-chairman of the All India Spices Exporters’ Forum is of the view that the pepper production in Kerala has come to a halt as the pepper vines have become older now and have started giving low yields. Plantation of new vines will take at least 3-4 years to mature for the fruits. Also, young generation does not look keen in pepper farming and the state is severely short of labour. The current lot of labours are migrants from Orissa, Bihar, Bengal UP etc.

Speaking about the price scenario he revealed that the Pepper prices will rule firm to upward in the months to come as the stock pipeline is going to be dry by the season- end i.e. December’10 as the stock in the market at present is around 25,000 tonnes as against of an average domestic consumption of 5000 tonnes a month. Still six months to go for the new season. Prices are likely to be around 200/225 a kg. by December’10 as the pipeline would be dry by that time.

Shri Manikantbhai, a Kochi based leading pepper stockist and exporter agreed that annual crop is about 50,000/55,000 tonnes and consumption is around 45,000 tonnes hence ‘we don’t have enough exportable surplus of pepper.’ Farmers have strong hold on the stock. Fundamentally pepper is very strong and looks bullish after August’10.

Prices can cross Rs.180/185 a kg by Sept/Oct.’10. He said that an estimate of new crop would come by September/October. “Of course, next season’s scenario will depend upon the crop situation of our global counterparts like Vietnam, Malaysia, Indonesia, Brazil etc,” he added.

Shri Bhaveshbhai Ved another Kochi based pepper broker said that Kerala’s pepper production is gradually declining while in Coorg (K’taka) is increasing. Prices are likely to touch Rs.200 a kg by October/November’10.

“We cannot export pepper because of price disparity. Our prices are $3700 a tonne FOB while our counterparts also quote the same level in the international market. Vietnam is leading in pepper production with 1,00,000/1,20,000 tonnes a year.”

Another Kochi based broker Virendra Vadalia also agreed Coorg will take a Lead in pepper production in the coming days as it produces on the large scale while in Kerala is still in smaller farms. He added that commodity exchanges should keep the contract size of all the commodities small which would help them to cover more and more clients increasing the turnover.

Some market sources pointed out that illegal import of low quality pepper from Sri Lanka and Malaysia, can affect the domestic prices. Also, Free Trade Agreements (FTA) with other countries to reduce import tariffs may also have adverse effect on the pepper prices. As per the FTA, import tariffs on pepper will be reduced from 70% to 50% over a period of 10 years.

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