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Black Pepper Prices Plunge Amid Surging Imports and Market Fears

Black pepper prices have dropped by Rs.14 per kg in the last three weeks, influenced by a surge in imports and concerns over high carry forward stocks. Quality issues with imported pepper and subdued demand due to unfavorable weather have further pressured prices. Market participants are hopeful that the upcoming festival season will revive demand and stabilize prices.

Highlights

Drop in Black Pepper Prices: Black pepper prices have seen a decline of Rs.14 per kg over the past three weeks due to increased imports and higher carry forward stocks. The current prices at the Kochi terminal market are ?646 per kg for the ungarbled variety and Rs.666 per kg for the garbled variety.

Increase in Imports from Sri Lanka: A significant rise in black pepper imports, particularly from Sri Lanka, is impacting the Indian market. In July, Sri Lanka accounted for 4,400 tonnes out of the total 5,085 tonnes of imports, leading to a market flooded with imported pepper.

Market Panic and Selling Pressure: The market is experiencing a selling spree as importers try to offload their overbought stocks, fearing further price drops. This panic is fueled by concerns over high carry forward stocks and pressure to liquidate, affecting price stability.

Quality Issues with Imported Pepper: The influx of imported black pepper has led to quality concerns, with issues such as high moisture content, low bulk density, and the presence of mould. These quality problems have forced dealers to sell at discounted rates, further depressing prices.

Lack of Demand in Upcountry Markets: The expected festival season demand has yet to materialize due to unfavorable climatic conditions, including heavy rains, in many consuming states. This has resulted in subdued buying and added to the downward pressure on prices.

Hope for Price Stabilization: Despite current market challenges, there is optimism that black pepper prices may stabilize in the coming weeks. The start of the festival season in North Indian markets is anticipated to increase demand, potentially supporting price recovery.

Conclusion

The Indian black pepper market is currently under pressure from a combination of increased imports, particularly from Sri Lanka, and quality concerns with the imported product. These factors, along with subdued festival season demand due to adverse weather, have led to a significant price drop. However, the market is expected to find some stability as the festival season begins in North India, potentially boosting demand and providing a floor for prices. Stakeholders are closely monitoring these developments, hoping for a recovery in the coming weeks.

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