Black Pepper Prices Decline: Increased Imports and Stock Liquidation Trigger a Price Drop
Black Pepper Prices Fall Due to High Imports
Black pepper prices have experienced a significant decline, losing $0,17 per kg over the past three weeks. This drop is attributed to higher imports and reports of increased carry-forward stocks in the market. At the Kochi terminal market, prices are currently quoted at $7,75 per kg for the ungarbled variety and $8,00 per kg for garbled varieties. The market sees a daily offering of 20-25 tonnes, mostly consisting of imported pepper, according to the Indian Pepper and Spices Trade Association (IPSTA).Surge in Sri Lankan Imports Creates Market Panic
Kishor Shamji, director of IPSTA, noted that pepper imports from Sri Lanka have surged, contributing to 4,400 tonnes out of the total 5,085 tonnes imported in July alone. This influx of imported pepper has led to a selling spree, as importers rush to liquidate their overstocked inventories. This panic in the market has fueled fears of further price declines. Additionally, most of the Indian markets are now flooded with imported pepper, which suffers from quality issues such as high moisture, low bulk density, and the presence of mould. These factors have forced dealers to sell their stocks at discounted rates, exacerbating the price drop.Lack of Festival Demand Further Pressures Prices
The anticipated festival demand in upcountry markets has yet to materialize, largely due to unfavourable weather conditions, including heavy rains in key consuming states. These conditions have led to subdued buying, adding to the pressure on black pepper prices. Reports of carry-forward stocks from 2022 to 2024 have also created unnecessary fear among traders, prompting further stock liquidation.Price Stabilization Expected with Upcoming Festival Season
Despite the current challenges, Shamji expressed optimism that black pepper prices may stabilize in the coming weeks. The onset of the festival season in North Indian markets is expected to boost demand, potentially halting the downward trend in prices.The black pepper market is currently facing significant challenges due to high imports and market panic, leading to a sharp decline in prices. However, with the festival season approaching, there is hope for price stabilization as demand is expected to increase.