Black pepper (Piper nigrum) is a flowering vine in the family Piperaceae. Hot and pungent black pepper is one of the most popular spices in the world. The fruit, when dried, is approximately 5 mm in diameter. Black pepper is used for both its flavour and medicinal properties. In India harvesting starts from December and extends till March whereas the arrivals in the physical markets start from February.
Scenario Of Pepper
World pepper production is around 2.6 MT to 3.1 MT per year. Vietnam is the world's largest producer and exporter of pepper, producing almost one-third of the world's Pepper crop. Other major producers include India (19%), Brazil (13%), Indonesia (9%), Malaysia (8%), Sri Lanka (6%), China (6%), and Thailand (4%). India produces about 50.000 MT of pepper every year with Kerala & Karnataka accounting to more than 95% of the domestic production. Indian pepper is traded at a premium in international markets owing to its superior quality.
Future Prospects Of Pepper
Black pepper is consumed throughout the world more than any other spice. The major importing nations like USA, EU are creating higher demand every year, thus there is increased international competition. Indian origin pepper is considered to be of best quality which attracts these importers. Also, India is the largest consumer. Developments in the spice industry in India have further increased the domestic demand.
Factor Influencing Prices Of Pepper
Pepper futures contract was launched on April 2004 and since then this contract has witnessed considerable volatility. Using futures platform producers can minimize their price risk .Wide range of Market participants ensure good price discovery. With ever increasing export demand, exporters can insure themselves against price risk. Good stocks of Pepper provide good arbitrage opportunities to the various market participants. Being amongst the most liquid contract speculators can easily enter or exit the market. Thus the Pepper contract provides space for every investor category.
Scenario Of Pepper
World pepper production is around 2.6 MT to 3.1 MT per year. Vietnam is the world's largest producer and exporter of pepper, producing almost one-third of the world's Pepper crop. Other major producers include India (19%), Brazil (13%), Indonesia (9%), Malaysia (8%), Sri Lanka (6%), China (6%), and Thailand (4%). India produces about 50.000 MT of pepper every year with Kerala & Karnataka accounting to more than 95% of the domestic production. Indian pepper is traded at a premium in international markets owing to its superior quality.
Future Prospects Of Pepper
Black pepper is consumed throughout the world more than any other spice. The major importing nations like USA, EU are creating higher demand every year, thus there is increased international competition. Indian origin pepper is considered to be of best quality which attracts these importers. Also, India is the largest consumer. Developments in the spice industry in India have further increased the domestic demand.
Factor Influencing Prices Of Pepper
- Domestic Fundamentals
- World production & Exports
- International trading price
- Domestic and Export demand
- Year ending stocks and stocks-to-consumption ratio
- Sowing and Harvesting of all producing nations
- Climatic conditions
- Government policies with regard to imports and exports
- Soil Moisture and Rainfall
Pepper futures contract was launched on April 2004 and since then this contract has witnessed considerable volatility. Using futures platform producers can minimize their price risk .Wide range of Market participants ensure good price discovery. With ever increasing export demand, exporters can insure themselves against price risk. Good stocks of Pepper provide good arbitrage opportunities to the various market participants. Being amongst the most liquid contract speculators can easily enter or exit the market. Thus the Pepper contract provides space for every investor category.
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