The production of pepper in India for the fiscal year 2016-17 is estimated to be 55,500 MT, which is sharply higher than the 48,500 MT produced in fiscal year 2015-16. The pepper production in India has gone up over the last 5 years despite the area under cultivation falling consistently. That indicates a much higher acreage for the crop. Domestic consumption of pepper has been stable around 51,000 MT, which will be largely met through domestic production itself. Most of the pepper that India imports from countries like Vietnam, Indonesia and Sri Lanka tends to get exported to the US and Western Europe. In fact, the US, UK, EU and Canada together account for 95% of the total pepper exports from India.

Pepper prices are determined by a variety of factors. Currently, the demand and supply of pepper are mostly matched and hence price disruptions are not too many. Also it is a perennial crop and hence issues of storage and seasonality are not as critical as in case of other crops. The big trigger could be a sharp growth in demand. Countries like India are increasingly seeing acceptance of pepper in the culinary habits. It is believed that Chinese demand for pepper could also gradually pick up and that could be a positive trigger for prices.