Inclement weather and uneven crop setting are likely to shrink pepper output for the current crop season (October 2021-September 2022). Growers and the trade fear a 30-35 percent decline in pepper output over last season’s production of about 65,000 tonnes.
In anticipation of the lower crop, pepper prices have begun to surge and are currently ruling at a three-year high. This has brought cheer to farmers as the rates are all set to touch $6.74 per kg for ungarbled varieties soon. The closing rate in the Kochi terminal market on Tuesday was $6.66 and $6.93 for garbled varieties. Traders attributed the hike to rising domestic demand from end-users and non-availability of the crop in the market. At the same time, the prevailing conditions could trigger higher imports.
“We expect the crop to be lower by 30-35 percent this year,” said Vishwanath KK, Co-ordinator, Consortium of Pepper Growers in Madikeri, Kodagu. “The crop setting was not uniform and the prevailing inclement weather is seen affecting it,” Vishwanath said, adding that the crop is likely to be at 35,000-40,000 tonnes. The situation is no different in Kerala, where the crop has been impacted, he said.
Jeffrey Rebello, Vice-President, UPASI, said the prevailing wet conditions could result in growers with wilt and droppings getting a lower crop. UPASI is also expecting the crop to be lower by 30-35 percent this year.
High production costs
KPA Chairman, S Appadurai, said growers have to face higher production costs due to the prevailing rains as they have to take up extra spraying to keep fungal infections under check.
Kishore Shamji, coordinator of Indian Pepper & Spices Traders, Planters Consortium, said inclement weather has hit production in the January-December marketing season, forcing farmers to liquidate the available stock at the fag end of the season for cash. This has resulted in stock depletion, leading to a tight supply situation in the market.
The festival demand since Navaratri and the opening up of the economy after the easing of Covid regulations, starting of weddings in upcountry markets, opening up of hotels and catering units — all have generated good demand for pepper powder. This has resulted in scrambling for buying by the end-users at prices dictated by sellers. “But the quantity available is limited, which has led to the spurt in prices,” he said.
However, Shamji said the surge in prices and the non-availability of the crop in the domestic market is expected to push up imports — both legal and illegal — considering the lower prices of pepper prevailing in other producing countries. “There are instances of pepper imports through illegal routes from neighboring Nepal and Myanmar borders,” he said.
Against the Indian price at $7,500 per tonne, Vietnam pepper prices are ruling at $4,500, Sri Lanka at $5,500, Brazil at $4,400 and Indonesia at $4500, he said.
On the crop size, Shamji said the crop availability this season is expected to be bad because of climate vagaries. However, the real picture could be ascertained only after 2-3 weeks but the figure is likely to be in the range of 35,000-40,000 tonnes compared with 65,000 tonnes last year.
Asked about the price outlook, Shamji, quoting analysts, said it would be in the range between $8.09 and $10.78 in the short term. Some farmers are holding back the crop to cash in on the situation on the expectation of a further rise in prices.
Total pepper imports into the country have also gone up a tad to 24,304 tonnes between January and October this year and of this, Sri Lanka pepper constitutes 7,147 tonnes. “In October, imports stood at 1,835 tonnes against 1,595 in September,” he added.
Source: The Hindu Business
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