Price of black pepper expected to remain high due to production being less than demand
01-Mar-2025 01:23 PM
The price of black pepper in India is expected to remain high due to a significant supply shortage this year, driven by several factors, including adverse weather conditions, climate change, and changes in rainfall patterns. Here's a breakdown of the situation:
Production Decline: The Union Agriculture Ministry reported a production of 1.20 lakh tonnes of black pepper last year, with an additional backlog of 50,000 tonnes, bringing total availability to 1.70 lakh tonnes. However, domestic consumption was 1.32 lakh tonnes, indicating that a significant portion of the black pepper produced was used domestically.
Current Supply Outlook: This year, the supply of black pepper is expected to decline drastically. Estimates indicate a 50-70% reduction in the availability of black pepper, largely due to crop damage in key producing areas like Kerala and Karnataka. The drop in production is anticipated to be between 40% to 50%, exacerbated by the changing weather patterns.
Import Dependency: To meet domestic demand, India will likely have to increase its imports of black pepper, as the domestic supply will not suffice. Import figures for 2024 show that India brought in 35,563 tonnes of pepper, with most of it sourced from Sri Lanka. However, Sri Lanka's production is also expected to face challenges due to adverse weather conditions, which may affect the availability of pepper for export.
Shifting Trade Sources: If Sri Lanka's pepper crop is significantly impacted, India may look to other countries, such as Vietnam, Indonesia, Thailand, and Brazil, to fulfill its demand.
Regional Production: India’s major pepper-producing states include Karnataka (55% of national production), Kerala (40%), and Tamil Nadu (5%). The new crop from Kerala’s Idukki and Pathanamthitta districts is expected to begin arriving in December 2024, while Karnataka's pepper harvest will peak in the coming weeks.
Given the reduced domestic supply and the increased demand, the price of black pepper is expected to remain high, and businesses in the spice manufacturing sector may continue to face challenges in securing adequate quantities at affordable prices