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Commodity
PEPPER
Description | Overview | History | Cultivation pattern | Pepper producing countries | Indian pepper market | Major trading centers | Contract specifications
Description

Pepper is a fruit-like unripe berry that is obtained from a plant namely, Piper Nigrum (A perennial shrub having spikes of white flower and dark green leaves). These unripe but mature berries are collected and dried in the sun to get the black pepper. It is the earliest of the spices that are known to the world today. Pepper word is derived from a Latin word ‘piper’ but the origin of this word comes from a Sanskrit word ‘pippali’ which means pepper only. Pepper is also and rightly known as the 'king of spices’ as its usage makes it the most essential spice in the world.

Overview

As mentioned above, pepper is said to be the ‘king of spices’ because its usage round the world is more than any of the spices present. It is also the oldest one. The production of pepper is dependent upon the hot and moist weather conditions and the pepper crop needs these sorts of conditions to prosper. That is why it is produced in countries having this type of climate.

The topmost pepper producing countries forms part of the International Pepper Community Countries (IPC) covering about 85% of the pepper world’s trade. The world’s total production was recorded at 3.25 lakhs tons in 2003. The pepper exports fluctuates around 2.25 lakhs tons and the major export share is held by Vietnam with 85 thousand tons. The table below shows the major exporters of pepper in the world: -

Countries

Exports (thousand tons)

Vietnam

82

Indonesia

57

Brazil

37.9

Malaysia

18.5

India

17.2

Earlier, India was leading the list of the pepper producing countries but after 1999, Vietnam took the lead as it put more area under pepper production. The world’s total pepper demand was about 2.2 lakh tons in 2001-02.

  Pepper was the one of the first crops that was cultivated in India. It is usually found in the southern and southwestern regions of Indian subcontinent. India’s pepper production constitutes 26% to the world’s pepper production. Kerala holds the biggest share in India’s total pepper production contributing to a staggering 96%. The remaining production is contributed by Karnataka, Tamil Nadu, Pondichery and Andaman & Nicobar.

 

History

Pepper has a long history that is 4000 years old and it moves back to even before 410A.D. It had been continuously used as a medicine for various ailments such as fever, digestive problems and stomach aches. Pepper has a quality that it helps in cooling down the body as it activates perspiration. The monks also used it because it was said to boost their endurance during their long treks. It was also used by the Chinese to cure Cholera and Malaria.

Pepper has always been a valuable commodity and has been used as a mode of payment. It was used to pay rent in England. Taxes could also be paid through pepper in the ancient times. Pepper was much used by the Romans too. It was considered that fine cookery was incomplete without the use of pepper. Until 18th century, the Portuguese dominated the pepper trade as they discovered the sea route to India and they used this route for taking pepper to their country. In India, pepper was known even before Alexander marched in the country.

The last part of the 20th century has shown a high increase in pepper production as new plantations were found out in major pepper producing countries of the world.

 

Cultivation pattern


As already discussed previously, the pepper plant needs a hot and humid weather and also it needs a good rainfall and partial shades to prosper. The pepper plant has lifetime of around 40 years and starts producing the berries after 2-5 years. The pepper crop is grown as a mixed crop in India. The productivity of pepper in India is low as compared to the other pepper producing countries. This one of the reasons for India’s losing grip of the pepper production to other countries.

  The sowing period of pepper plants in India is generally May-June. The crop sown in May-June is harvested from December to February. The harvesting period may alter depending upon the geographical location i.e. in hilly areas it may start from January and can extend up to March and in plains the harvesting period may start from November up to January.

  Harvesting periods of pepper crop out side India is also different from the harvesting period in India. June-July is the harvesting period in Sarawak (Malaysia), August- September in Brazil, July-September in Lampung (Indonesia).

 

Pepper producing countries

 

  • Vietnam (85000 tons)
  • Indonesia (67000 tons)
  • India (65000 tons)
  • Brazil (35000 tons)
  • Malaysia (22000 tons)
  • Sri Lanka (12750 tons)
  • Thailand
  • China

Before 1999, India was the leading pepper producing country and Indonesia was on the second place. But 1999, Vietnam took the lead from India by putting more land under cultivation and increased its production to 8.5 lakh tons. Now Vietnam has become the leading exporter of pepper also with an amount of 82 lakh tons leaving India far behind. One of the reasons for this change is the low productivity of pepper in India i.e. 306 Kg per hectare as compared to that of Thailand that is about 4000 Kg per hectare.

Production of pepper in India

India had been producing pepper for a very long time. India contributes to about 20% of the world’s pepper production and the area under pepper production is about 2.25 lakh hectares.

Pepper is found in southern and southwestern regions of India. Kerala is leading pepper-producing state in India contributing to around 96% of the total production followed by Karnataka. The major districts of Kerala, which are indulged in pepper production, are Calicut, Cannanore, Kottayam and Idukki. The major districts, which are indulged in pepper production in Karnataka, are Kodagu, North Kanara, South Kanara and Shimoga. Following are the states other than Kerala and Karnataka in which pepper is being produced

  • Maharashtra
  • Goa
  • Madhya Pradesh
  • Andhra Pradesh
  • West Bengal
  • Orissa
  • Assam
  • Tripura
  • Meghalaya
  • Arunachal Pradesh
  • Mizoram
  • Nagaland
  • Manipur
  • Pondicherry
  • Andaman and Nicobar Islands
Indian pepper market

India has been the oldest pepper producing countries and one of the biggest markets of the premium grade of pepper. Pepper in India mostly gets harvested at the beginning of the year only. Kerala is the leading pepper producing state in India.

But in the current scenario the production of pepper in India has reduced drastically. As compared to the production of 80000 tons of pepper in 2002, the production has fell to 65000 tons in 2003. As a result, the exports of pepper from India also felt a downfall from 24914 tons in 2002 to 17200 tons in 2003. This was just 8% of the total exports in the world. The last 40 years didn’t get to see such a low quantity of exports. Also, the % export of total production in India is declined 31% in 2002 to 26% in 2003. The table below shows the trend of exports in India from 1991 to 2005

Years

Indian Exports (tons)

1991

13031

1992

11389

1993

20792

1994

48661

1995

37005

1996

25821

1997

47624

1998

35842

1999

34293

2000

36314

2001

18798

2002

17374

2003

21609

2004

16635

2005

14150

  Market Influencing Factors

  • The production and exports of other pepper producing countries even though the grade India produces is the premium grade.
  • Year ending stocks
  • Stocks - consumption ratio
  • Annual production weather during the year.
  • Holdings by the producers
  • Import – Export policy of the government
  • Large scale imports from Sri Lanka and then again exporting the same to Sri Lanka

 

Major trading centers of pepper

 

  • New York
  • Singapore
  • Rotterdam
  • Lampung - Indonesia (primary international grades
  • Sarawak – Malaysia (primary international grades
  • Vietnam (primary international grades
  • Kochi - India (malabar grade)

  In India, pepper is traded at

  • Cochin
  • Alleppey
  • Calicut
  • Nedumangad
  • Konni
  • Adoor
  • Pala
  • Alwaye
  • Thodupuzha
  • Chalakudy
  • Badagara
  • Cannanore
  • Tellicherry
  • Kanjangad
  • Kasaradod
  • Mumbai.
Also, pepper is traded in Indian commodity exchanges namely, National Commodity & Derivatives Exchange ltd, Multi Commodity Exchange of India ltd,  National Multi Commodity Exchange of India ltd and India Pepper & Spice Trade Association.

 

Future contract specifications of pepper in various commodity exchanges
 
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