Drought-like conditions may hit pepper output in India, Vietnam

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Kochi | Published: April 8, 2016 6:05:42 AM

India is the largest consumer of pepper in the world and the second largest producer after Vietnam.

Drought-like conditions in pepper growing regions of Vietnam and India is likely to support the market, traders said. Harvesting is in the last phase in the two nations and concerns on next season’s crop could lead to hoarding.

India is the largest consumer of pepper in the world and the second largest producer after Vietnam.

Kishore Shamji, one of the senior exporter and member of the India Pepper and Spice Trade Association (IPSTA), said that availability in India is low and dry conditions could impact the production for next season. Pepper is being sold for R670-R690 per kg in the terminal market of Kochi with the daily arrivals limited to 8-9 tonne.

“Reports from Vietnam say that 39 out of 63 provinces have been impacted by drought. Twelve provinces have declared state of emergency. Gia Lai, Daknong and Daklak which contribute close to 100,000 tonne of pepper put together are in the midst of a severe water crisis,” Jojan Malayil of Kochi-based Bafna Enterprises said. Farmers are holding on to the pepper and availability in major markets is low, he added.

“Imports look attractive as Indian rupee has appreciated. The pepper released by the Food Safety and Standards Authority of India (FSSAI) is available in the market and pulling down the price. Nearly 3,000 tonne from the 6,800 tonne has already been sold but the quality of the stock is suspect,” Shamji said. He estimates Indian production to be less than 40,000 tonne.

“Vietnam has sold 50,000 tonne up to March and has 1,00,000 tonne stocks left to sell till the next crop. But they are likely to bargain for a higher price on the present climatic conditions,” he added.

Global pepper production during the crop year of 2016 is estimated to increase by a marginal 6,000 tonne mostly on higher production in Vietnam , according to the reports of the 43 rd annual meet of International Pepper Community’s (IPC) held in India recently. Black pepper production is expected to increase only marginally to 3,26,063 tonne from 3,25,033 tonne in 2015.The total production of black and white pepper is estimated to be around 413,713 tonne as against 407,158 tonne in 2015. Indian production is projected to decline to 53,000 tonne in 2016 from 65,000 tonne in 2015.

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