India's black pepper production is likely to decline due to erratic weather conditions like unseasonal rainfall and climate change, according to a report published by global consulting firm NXG World.
In 2025, it is poised to slip by 20% to 46,000 tonnes, compared to last year's output of 55,000 tonnes, according to the report.
However, India alone is not facing the issue of less output. Major producers like Vietnam and Sri Lanka are also producing less, thereby worsening the global supply crunch.
Due to the global shortfall in production of pepper, it is expected that prices in key markets will remain high. As a result, competition for quality Indian black pepper will intensify.
Farmers Struggling
The decline in production, coupled with supply constraints are pushing prices of the spice to record levels. While this may work to the advantage of traders, farmers are struggling with market inefficiencies, according to the report.
Southern states dominate the production of pepper, with Karnataka producing bulk of the spice at 60%. Kerala's contribution stands at 30%, while Tamil Nadu and other regions make up for the rest, it said.
However, despite being the largest producer, Karnataka faces several challenges. Due to an unorganised market and lack of direct procurement channels, farmers from Karnataka have to often rely on intermediaries in Kerala to sell their produce. As a result, they earn less profits compared to producers from other states, it added.
What works for Kerala is that it has established trading networks and institutional buyers. As a result, its farmers have better market access, the report said.
Call For Fair Pricing
Organised trade and fair pricing is crucial for the industry's long-term stability. Industry stakeholders are demanding for structural reforms to strengthen direct trade channels and ensure fair pricing for farmers.
Establishing organised procurement systems in Karnataka and other key pepper-growing regions could help farmers access better prices and reduce dependency on middlemen.
As India navigates these challenges, exporters and traders are closely monitoring market trends.
While high prices may benefit traders, sustaining production amid climate uncertainties and market inefficiencies remains a pressing concern for the long-term stability of India's black pepper industry.
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