Pepper prices likely to rise on lower arrivals

Written by RajeshRavi | Kochi | Updated: Jul 20 2012, 08:29am hrs
Pepper prices are likely to firm up in the domestic market due to lower arrivals and concerns on the next crop. Lower monsoon rains in the pepper growing tracts of Kerala and Karnataka have impacted the sentiments of farmers and traders who are holding on to the stocks. According to the data provided by the India Meteorological Department (IMD), monsoon rains in the two states of Kerala and Karnataka are seen lower by 37% and 34%, respectively.

Rains are lower in Wayanad by almost 50%. Spike formation is good but we are concerned that the berry formation be lower due to the break in monsoon after its onset,Anand MV, a farmer from the Wayanad region told FE.

After the onset of monsoon, spike initiation in black pepper crop can be seen along with the emergence of new leaf on lateral branch within a week. Once spike initiation is set, there should not be any dry spell until berry maturity. Continuous and steady moisture supply is essential for the growth of berries.

Extended dry period leads to staggering of flowering and the berry maturity will also be delayed.

The problem is more acute in Karnataka which is the largest producer of pepper. Water table is low and the yield is expected to be lower for the next crop, Faiyaz Hudani of Kotak Commodity Services said. Unlike the Kerala plantations that are rain dependent, pepper vines in Karnataka are mostly seen in coffee plantations and are irrigated. Faiyaz is bullish on pepper due to lower supply and good domestic demand.

Chowda Reddy, senior analyst at JRG Wealth Management feels that it is too early to comment on the crop but is concerned about the lower rains. He is bullish on the commodity due to lower supply. Globally too the prices are moving up. The main season is over in Vietnam and the supply would be limited, he added.

An econometric study of the market by the Agricultural Market Intelligence Centre (AMIC) of the Kerala Agricultural University (KAU)` had reported in July that the pepper prices are likely to remain firm and surge towards the later half of the year on account of robust domestic consumption of the commodity.