India's Black Pepper Production Expectations

India’s black pepper production for the 2024-25 season is expected to fall significantly, down by 38%, reaching 78,000 tonnes compared to 126,000 tonnes last year. This sharp decline is mainly due to unfavorable weather and farmers planting less pepper this year. The area used for growing pepper shrank from 313,000 hectares to 255,000 hectares.

Pepper Prices Jump as Supplies Tighten

With lower production, pepper prices have climbed rapidly, reaching USD 8,40 per kg in Karnataka and Kerala. In Kochi’s main market, prices for ungarbled pepper are USD 8,23 per kg, while garbled varieties are slightly higher at USD 8,47 per kg.

Kishore Shamji, Director at the Indian Pepper and Spice Trade Association, believes actual production might be slightly lower, around 75,000 tonnes, due to the changing climate conditions. With an additional 50,000 tonnes of leftover stock, the total available pepper this season will reach 125,000 tonnes.

GST Exemption Leads to Higher Prices

A recent exemption from GST for pepper farmers selling across state borders has driven prices higher, particularly in Karnataka, where pepper is now priced at USD 8,90 per kg. Tamil Nadu and Andhra Pradesh farmers are also demanding similar exemptions, which could further affect prices.

Global Pepper Production Slips Slightly

Globally, pepper production will slightly decrease to 480,000 tonnes compared to last year's 484,000 tonnes, according to Prakash Namboodiri from AB Mauri.

Brazil stands out as the only significant producer expecting increased production. Vietnam, India, Sri Lanka, and Indonesia are all anticipating reduced output. Meanwhile, Chinese pepper demand drastically declined by 75-80% in 2024. However, if China’s demand rebounds, global pepper prices could rise significantly.

Pepper prices in India may continue climbing this season, especially with strengthening demand after the Holi festival.