The supply of pepper has seen a dramatic increase over the last ten years. While prices have fallen over the last three years, the market has absorbed the supply of pepper 

Global Scenario

• The global production of pepper fluctuates between 3-3.5 lakh tons tons, with a production of 3.25 lakh tons recorded in 2003. 
• Vietnam (85000 tons), Indonesia (67000 tons), India (65000 tons), Brazil (35000 tons), Malaysia (22000 tons), Sri Lanka (12750 tons), Thailand, China are the major producers of pepper in the World. 
• Vietnam's sudden increase in production has resulted in the global production, increasing to 3-3.5 lakh tons from 1.9-2 lakh tons in the late nineties. Vietnam is the world's largest producer and exporter of pepper in the world now. 
• The global exports of pepper are around 2-2.5 lakh tons, with 2.29 lakh tons being exported in 2003. 
• The major exporters of pepper are Vietnam (82000 tons), Indonesia (57000 tons), Brazil (37940 tons), Malaysia (18500 tons) and India (17200 tons).

Major World Markets

• New York, Singapore and Rotterdam are major international trading centers for pepper. The primary international grades and their markets are Lampung at Panjang (Indonesia), Sarawak at Kuching (Malaysia), Vietnam at HCM City (Vietnam). However, Malabar grade of pepper from India traded at Kochi, Kerala is considered to be the premium grade of pepper and rules above the international grades.

Indian Scenario

• India harvests most of its pepper at the beginning of the year. During 2003, production of pepper in India was reported to be 65,000 tons against 80,000 tons in 2002. 
• Kerala accounts for 90% of India's pepper production. The other producers are Karnataka and Tamil Nadu. 
• During 2003, Indian exports of pepper amounted to 17,200 tons, registering a 31% fall compared to exports of 24,914 tons in 2002. The export in 2003 was the lowest quantity of pepper exported from India during the last four decades. This quantity was only 64% of the average export over the last five years. In terms of export share, India contributed only 8% to total producing country exports in 2003, a fall from the 14% of average share during last five years. 
• Developments in the spice industry in India have significantly affected exports. During 2003, export of whole pepper from India was only 26% of the total production, against 31% during 2002. The main market for Malabar black was United States, which traditionally imported around 50% of India's exports, followed by Canada, Netherlands and Italy. However, during 2003, only 30% of India's export was shipped to the United States. 

Major Indian Markets

• Kochi, Sulthan Bathery in Kerala are the major primary markets. Nagpur, Indore and Delhi have recently developed as the major up country markets for pepper.

Monthly Price Volatility of MG1 Pepper at Kochi (1998-2003)

Markets Influencing Factors

• Indian pepper is at a premium against all the international grades. However, the production and exports of pepper from other locations has a profound influence on Indian pepper prices too. 
• Weather and the annual production of a year. 
• Year ending stocks and stocks-to-consumption.
• Indian pepper arrives in the market in the beginning of the year. However, distress selling is not witnessed in pepper and the producers hold back the stock in anticipation of better prices.
• Government policies with regard to imports and exports.
• Traders allege large-scale imports of pepper from Sri Lanka and re-export from India as a major price depressing factor and Government has been asked to take measures to stop this practice.