: Short supply and rising demand combined with possible speculation are likely to keep pepper prices high over the next three months, beginning September through November, says a market analysis by the Agricultural Market Intelligence Centre (AMIC) of the Kerala Agricultural University, Department of Agricultural Economics.
Low pepper production within India and abroad during the beginning of the current season was indicated by the Market Intelligence Centre early this year. A reassessment of the price situation has been made in view of the record price fetched by pepper early this year.
The price of ungarbled pepper over the last 17 years has been taken into consideration in projecting the price over the next three months, the AMIC report said. The price level indicated by the study is between Rs.305 and Rs.325 a kg.
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Price of pepper is affected by production in Vietnam during the first half of the season and the production in Indonesia affects prices in the second half of the season.
There are reports that Vietnam has liquidated the bulk — around 65,000 tonnes, of its current year's production, estimated to be 1 lakh tonnes. Indonesian production has been lower and production in Brazil too has not been encouraging owing to climatic conditions, the report said.
On the other hand, demand for pepper will be buoyed by the impending festival season that includes Deepavali, Dussera and Durga Puja. The onset of winter will also see rising demand in the North Indian market.
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The report also pointed to small farmers having already liquidated their stocks when the price ruled high. The current stocks are being held by big farmers, traders and exporters. Uncertainty in the financial and stock market is driving investors into commodities, which, in turn, might lead to speculation in pepper too.