NATIONALMULTICOMMODITY

EXCHANGEOFINDIALIMITED

ReportonBlackPepper

4thFloorH.K.House,
B/hJivabhaiChambers,AshramRoad,
Ahmedabad,Gujarat380009INDIA
Phone:917940086039Fax:917940086040
Email:contact@nmce.comURL:www.nmce.com

BlackPepper

TableofContents

Introduction .................................................................................................................................. 3
Description.................................................................................................................................... 3
History ........................................................................................................................................... 3
HowtoSelectandStore .............................................................................................................. 4
Harvesting..................................................................................................................................... 4
PepperGrowingArea ................................................................................................................. 4
IndianNamesofPepper ............................................................................................................. 6
Varieties......................................................................................................................................... 6
DomesticdemandsupplytrendofPepper .............................................................................. 7
Consumption ................................................................................................................................ 8
Export............................................................................................................................................. 8
Import ............................................................................................................................................ 9
ImportantmarketsofPepper ................................................................................................... 10
Internationalscenario ................................................................................................................ 10
PepperPrice ................................................................................................................................ 11

BlackPepper
Introduction

Black pepper is the dried, mature but unripe berry (fruit) of Piper nigrum, a
branchingvineorclimbing,perennialshrub.Blackpepperisthemostimportant
spice of India and world due to its daytoday use. It is therefore rightly
consideredasthekingofspices.

TradinginPepperfutureswasfirstintroducedbyNMCEinApril2003.

Description

Black pepper comes from the berries of the pepper plant. Black pepper, green
pepper and white peppercorns are actually the same fruit (Piper nigrum); the
difference in their color is a reflection of varying stages of development and
processingmethods.

Black peppercorns are made by picking the pepper berries when they are half
ripe and just about to turn red. They are then left to dry which causes them to
shrivel and become dark in color. Alternatively, green peppercorns are picked
while still unripe and green in color, while white peppercorns are picked when
very ripe and subsequently soaked in brine to remove their dark outer shell
leavingjustthewhitepepperseed.

Black pepper is the most pungent and flavorful of all types of peppers and it is
availableaswholeorcrackedpeppercornsorgroundintopowder.

History

NativetoIndia,pepperhasplayedaveryimportantrolethroughouthistoryand
hasbeenaprizedspicesinceancienttimes.SinceancientGreece,pepperhasheld
suchhighprestigethatitwasnotonlyusedasaseasoningbutasacurrencyand
asacredoffering.Pepperwasusedtobothhonorthegodsandtopaytaxesand
ransoms. During the fall of ancient Rome, the invading barbarians were even
honored by being given black pepper. Additionally, in the Middle Ages the
wealthofamanwasoftentimesmeasuredbyhisstockpileofpepper.

The reason that pepper was so cherished is that it served important culinary
purposes. Not only could its pungency spice up otherwise bland foods, but it

BlackPepper
coulddisguiseafoodslackoffreshness,thelatterbeinganespeciallyimportant
qualityinthetimesbeforeefficientmeansofpreservation.
Pepper became an important spice that catalyzed much of the spice trade. This
not only led to exploration of many undiscovered lands, but also to the
developmentofmajormerchantcitiesinEuropeandtheMiddleEast.
Today,themajorcommercialproducersofpepperareIndiaandIndonesia.

HowtoSelectandStore
Blackpeppershouldbekeptinatightlysealedglasscontainerinacool,darkand
dryplace.Wholepeppercornswillkeepalmostindefinitely,whilegroundpepper
will stay fresh for about three months. Pepper can also be frozen although this
willmakeitsflavormorepronounced.

Harvesting
In plains the harvesting season extends from November to January and in hills
fromJanuarytoMarch.ButinKerala(havingproductionshareof96%inIndia)
plants flower in the month of MayJune. The crop takes about 68 months from
floweringtoharvest.

PepperGrowingArea
ItisoneofthemostancientcropscultivatedinIndia.Itprobablyoriginatedinthe
hillsofSouthWesternIndiai.e.fromNorthKanaratoKanyakumari.Itismostly
foundinhotandmoistpartsofSouthernIndia.Keralaalonecontributesabout96
percentofthetotalproductioninIndia,nextcomesKarnatakawith3.5percent.
TherestiscontributedbyTamilNadu,PondicherryandAndaman&Nicobar.
Keralaaloneaccountsfor94percentofthetotalareaand96percentofthetotal
production of pepper in India. Even though pepper is cultivated throughout
Kerala,Calicut,Cannanore,KottayamandIdukkidistrictsaccountfor67%ofthe
totalpepperarea.
In Karnataka, Kodagu, North Kanara, South Kanara and Shimoga are major
centers of pepper production. Likewise in Tamil Nadu, Kanyakumari, Nilgiris
andMaheinPondicherryaretheothermajorcentersofpepperproduction.Black
pepperisalsogrowninsomepartsofOrissa,AndhraPradeshandNorthEastern
region. But now pepper cultivation has spread to some parts of Goa and
Maharashtraalso.

BlackPepper
Pepper State-wise Production (in MT) in 2006-07

Tamil Nadu
851
Andaman &
Karnataka
1%
Nicobar
2,360
40
3%
0%

Kerala
87,605
96%
Source: Spices Board

There has been a change in the production trend among states and the rising
interest towards pepper production also in states other than Kerala. Though
production has gone up in Kerala, its contribution has fallen a bit from 98% in
199596 to96%in 200203.In200607 Keralas sharein the productionwas96%.
Theproductionin200203inAndamanandNicobarishigherthantheprevious
years,yetitislessthan1%oftotaldomesticproduction.TheshareofTamilNadu
isunchangedat1%,butthatofKarnatakahasgoneupfrom1%to3%in200607,
withthesimultaneousriseinareaundercultivationandproductivity.

PepperProductionin200607
State
Area(inha) Production(inMT)
Kerala
237,998
87,605
Karnataka
10,690
2,360
TamilNadu
3,745
851
Andaman&Nicobar
697
40
Total
253,130
90,856

Other major pepper producing countries are Indonesia, Malaysia, Brazil,

Thailand,SriLankaandVietnam.

BlackPepper
IndianNamesofPepper

1HindiKalimirch
2SanskritMarichaushana,hopusha
3PunjabiKalimirch
4MarathiAle
5BengaliKalaMirch,Golmarich
6TeluguMiriyalu
7TamilMilagu
8GujaratiKalamari,Kalomirch
9KannadaKaremenasu
10KashmiriMarutis
11MalayalamKurumulaku,Nallamulaku
12OriyaGolmaricha
13UrduKalimirch,Siahmirch

Varieties

TherearedifferentvarietiesofBlackpepperandtheirnamesareoriginatedfrom
the localities where they grown or from ports through which they are being
exported, e.g. Malabar, Alleppey (Kerala), Lampang, Saigon and Singapore.
Majority of the cultivated varieties are monoecious i.e. male and female flowers
found in the same spike. Peppers differ slightly in their physical and chemical
characteristics;colour,size,shape,flavourandbite.

Black pepper is more aromatic than the other varieties of pepper. It is native to
Malabar and has been grown here for more than 2000 years. The best Black
PepperisconsideredtobeTelicherryandLampong.Themostpopularvarieties
from India are Malabar Garbled and Tellichery Black. Tellichery and Alleppey
peppersarelarge,attractive,darkreddishbrowntoblack,veryaromaticandare
among the best. Same in case of the Malabar Garbled (MGI), which alone
accountsfornearly90%ofthetotalexportsfromIndia.

BlackPepper
DomesticdemandsupplytrendofPepper
Productiontrend
Pepper Production Trend in India
100000
90856
90000
78370

80000

Production (in MT)

70000

63670

70660

72430

2003

2004

61460

60000
50000
40000
30000
20000
10000
0
2001

2002

2005

2006 P
Source: Spices Board

Production has been rising from a range of 48,000 tons to 66,000 tons few years
ago to 70,251 MT in 199596, 70,617 MT in 199899, 70,6660 MT in 200203 and
90,856MTin200506.Sincetheyear199900theareaunderPeppercultivationin
Indiahasshownarisingtrendalso.Areaunderpeppercultivationhasincreased
from1,71,000hectaresin1990to2,23,086hectaresin200203and2,53,130hectares
in200506.

Productivity
Yieldvarieswidelyindifferentareasanddependsonseveralfactorssuchassoil
fertility, availability of irrigation facilities, type and quality of manure, climate,
typeofvariety,ageofvine,etc.InIndia,generallyyieldvariesfrom110kgto355
kg per hectare (average 275 kg only). When compared with other countries
(Malaysia4,130kg,Brazil3,400kg)averageyieldinIndiaisveryless.Onereason
foritslowproductivityinIndiaisthatitisgrownmostlybysmallfarmersalong
withothercropsonsmallholdings,whereasinothercountrieslikeMalaysiaand
Brazil it is grown as a pure crop. The productivity is also low because of the
continueduseofoldcultivationmethodsandshortageofwellrootedcuttingsof
highyieldingvarieties,adventofpestsanddiseaseslikeslowwilt,wilt,littleleaf
and quick wilt. Of these, quick wilt is the most harmful disease, which spreads

BlackPepper
rapidlydestroyingalargenumberofvines,estimatedatabout20percentofthe
totalcropalmosteveryyearinthecountry.

Consumption
The difference between production and exports (along with stocks at the
beginning of a year) forms domestic consumption. The domestic consumption
consists of pepper for culinary usage, grinding, extraction of oil and oleoresins,
pharmaceutical companies etc. Traditionally Indians are fond of spices. The
cumulative domestic consumption in producing countries shows a rising trend
with108,763tonsin2001,1,15,985tonsin2002and1,24,450tonsin2003.Onthe
otherhand,thecumulativestockcarryoverwas74886tonsin2001whichroseto
82361tonsin2002andagainfellto76745tonsin2003.
InIndia,thedomesticconsumptionofblackpepperwas52000tonsin2002which
rose to 58,000 tons in 2003. This shows that the consumption is increasing in
various sectors in India. Radical increase in domestic consumption is attributed
by extensive use of pepper in drug and pharmaceutical industry; and in food
processingindustry.

Export

Highest export in the last decade was reported in 1994; approximately 94% of
totalpepperproductionwasexported.ThepepperexportfromIndia,from1991,
shows a downward trend. With 13031 MT exports in 1991, it went up to the
highestat48661MTin1994andthenwitnessedalmostacontinuousdeclineupto
14148MTin2005,excepttheyear1997whenitreached47,624MT.Asaresultof
this interestingly,thestockcarryoverwas 30,866tons and30,666tons in 2002&
2003 respectively because of stagnation of International demand for Indian
pepper.

Exportsincreasedto17,363MTin2006and28,750MTin2007and35,000MTin
2008. The Government provided export subsidy during 2007 in order to
encourageexports.

BlackPepper
Pepper Export from India

60000
48661

Export (in MT)

50000
40000

47624
35842 36314
34293

37005

28750

30000

25821
21609
18798
17374 16635 17363
14148

20792

20000

35000

13031
11389

10000

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

Source: CMIE, DGCI&S, Calcutta /Shipping bills/ Exporters' returns

Import

TheimportofpepperintoIndiahasbeenincreasinggraduallyfrom1,472MTin
1991 to 17,725 MT in 2005. As per the current Foreign Trade policy, there is no
quantitative restriction on import of spices into India. The tariff for imports has
alsobeensteadilybroughtdown.UnderthebilateralagreementwithSriLanka,
dutyfreeimportofspicesispermitted.Dutyfreeimportsarepossibleforvalue
additionandreexport.TraditionallyIndiahasbeenanexporterofpepper.India
hasamoreorlessstableproductionof55,00065,000MTofpepperduring1992
2002.Sinceproductionhasstabilizedanddomesticdemandisincreasing,import
ofpepperhasincreasedconsiderablyafter2000.Accordingtotherecentstatistics
releasedbytheSpiceBoardofIndia,17,725MTpepperisexpectedtobeimported
in 200405 which is3,391 MTmore than theprevious year import. Import trend
forlast15yearsisgiveninthegraphbelow:

BlackPepper
Pepper Import from India
20000
17725
16870

18000

15392
14334

16000

Import (in MT)

14000
12000
10000
8000
6016 6325
6000
3535

4000
2000 1472

2163

2413 2186 2292 2153

1686

3129

858

0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
E
E
Source: CMIE, DGCI&S, Kolkata, DLI from Custom

ImportantmarketsofPepper

Pepper is mostly produced in South India and therefore almost all important
marketsarelocatedinSouthIndia.MajormarketsofpepperinIndiaareCochin,
Alleppey, Calicut ,Nedumangad, Konni, Adoor, Pala, Alwaye, Thodupuzha,
Chalakudy, Badagara, Cannanore, Tellicherry, Kanjangad, Kasaradod and
Mumbai.

Internationalscenario
Till 1999 India was the main producer and exporter of Pepper in the world
followedbyIndonesia.1999onwardsVietnamemergedasthetopproducingand
exportingcountry.Thisshiftinproductionisduetobringinginlargenumberof
hectaresunderpeppercultivation.AccordingtoInternationalPepperCommunity
Vietnamexported98,484tonsofpepperin2004,anincreaseofalmost32%over
the74,635tonsexportedin2003.BesidesVietnam;IndonesiaandBrazilareother
importantproducersandexportersofpepper.In2000Indiaexported36,314tons
ofpepper.ItsimportantmarketwasUSA,UKandotherEuropeancountriesand
Arab countries. During these years export destination has also seen a change.
Today Germany is the hot destination for pepper followed by USA and Saudi
Arabia.

10

BlackPepper
PepperPrice
Pepper price variations are influenced by many factors like international prices,
domestic production and consumption; and export import policies. Data
availableforlasttenyearsvisualizesseachangeinaveragepricesofthekingof
spices.InJanuary2001averagepepperpricewasRs.12892perquintalwhichfell
toRs.6394perquintalinFebruary2002.Highfluctuationinpricescontinuedtill
March 2003. However, high volatility in pepper prices in Indian market got
restricted after the launch of futures trading of pepper in the country. From
February 2003 to February 2005 pepper price had fallen by Rs.2000 per quintal.
Main reason for international price fall in pepper is its higher production and
supply from Vietnam. In 1999, 30,000 tons of pepper was produced in Vietnam
which increased sharply to 85,000 tons in 2003 which is 30% of global pepper
production. In 2003 Vietnam exported 75,000 tons out of its total production
whichcontributed40%ofglobaltrade.Theaveragemonthlypepperpricefallto
themarkofRs.6,055perquintalinDecember2004wasresultofdutyfreeimport
policy. In the interest of pepper planters, the Central Government recently
imposedheavyimportdutyonpepperbutthecheapimportfromSriLankahas
continuedunderFreeTradeAgreementbetweenthetwocountrieswhichhave
causedanadverseimpactonpepperpricesandpepperplanterscommunityasa
whole.

11