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Supply Shortages and Increased Demand Heat Up Pepper Market


Published Date: June 08, 2024
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In the last three months, pepper prices have climbed by more than 20% as a result of limited supply and rising demand. Ungarbled pepper costs ₹620/kg in the Kochi terminal market, while garbled pepper costs ₹640/kg. These prices are an increase from ₹505 and ₹525 in March, respectively. Prices have increased due to industrial procurement, particularly from masala makers.

Looking to Import black pepper? Due to a lack of domestic supply, the majority of the demand is satisfied by imports from Vietnam and Sri Lanka as well as manufacturing in Tamil Nadu and Karnataka. Idukki pepper supply is further limited since farmers sold off their supplies ahead of time because they were afraid of a price collapse.

Pricey Domestic Crop

The constraints posed by climate change in production areas and rising demand for pepper have led to a boom in trade. Prices have increased dramatically; since January, the price of a tonne of Vietnamese and Sri Lankan pepper has increased from $4,000 to $6,700 and from $5,800 to $6,800, respectively. A tonne of Indian pepper currently costs $8,000.

The manufacturing of pickles and masalas is driving the commercial need for spices like pepper, which is further taxing the supply. Notwithstanding obstacles, it is anticipated that production will climb to 110,000 tonnes this year from 95,000 tonnes the previous year, mostly as a result of increasing farming in Tamil Nadu and Karnataka. The position is still reliant on imports, however further shipments from Vietnam and Sri Lanka are anticipated.

Pepper vs coffee

Pepper is no longer pessimistic about supply problems. Due to its spot market trading, pepper is a more readable market. In contrast to other products like coffee, pepper does not have a forward or futures market. According to Kodagu Planters' Association executive committee member Pradeep Poovayya, growers are holding back their crops in expectation of increased prices.

In Karnataka, the State that produces the most pepper, pepper is mostly planted as an intercrop with other agricultural commodities like coffee and arecanut. Poovayya stated that growers are preferring to hold away pepper and sell coffees in order to satisfy their cash requirements because of the recent swings in coffee prices. Additionally, the reliability of the pepper purchases made by cooperative organisations like Campco in Gonikoppal and Kodagu.

Conclusion 

In conclusion, there has been a notable upheaval in the pepper market, as seen by a 20% price increase in just three months as a result of less supply and higher demand. The combination of industrial purchasing, climate-related issues, and limited domestic supply has increased the need for imports. The fact that growers are holding back supply in expectation of better prices highlights how volatile the market is in comparison to commodities like coffee. Uncertainty remains despite hopes for more production, highlighting the importance of closely observing supply dynamics and market movements.

If you want to import or Pepper Exporters or agro commodities in bulk, Tradologie.com is the best B2B platform. It facialites the bulk transactions without any middlemen through its state-of-the-art SaaS platform. Visit www.tradologie.com to explore B2B export opportunities and stay updated with the latest trends in the industry. 

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