It was a roller coaster ride for agri commodities, especially spices, in 2020. Prices of spices which were shooting through the roof for last three months, have seen a correction in the last fortnight and are now virtually at the same level as in last year.
However, the immunity-boosting properties of certain spices such as pepper, cardamom and tea during the Covid-19 pandemic have turned out to be a blessing for better price realisation, that too in the later part of the year, for farmers.
Prashant Bhansali, President of UPASI (United Planters’ Association of Southern India), said that the plantation sector is facing many structural issues such as high cost of production due to increase in wages, input costs, acute shortage of workers, climate change etc, and that there is a need for a focussed research that delivers technological advances in production, productivity, agronomical practices and post-harvest technology.
Cardamom – gains flavour
The average price of cardamom that farmers received in the August-October period was ₹1,573.96/kg (down from about ₹3,800-4,000/kg in the beginning of the year).
This rallied to ₹1,820.76/ per kg by mid-December. Traders are bullish on the current rising trend as the sector has reached the fag end of the harvest season. Besides, crop failure in Guatemala — the largest producer of cardamom — due to tropical storms and floods has caused Indian prices to surge. This may lead to supply pressure in the market, which would aid domestic prices.
Similarly, there has been a good upcountry demand after opening up of the markets in the last couple of months. Despite the recent rally, prices have plunged over the last year – when they ruled at ₹3,100-3,400/kg.
Pepper – not so hot
The latest price as on December 14 at Kochi market was ₹354/kg for garbled and ₹334/kg for ungarbled pepper, which is slightly higher than the price realised a couple of months ago. Beginning of the year, prices were around ₹344-349/kg. Nishant R Gujrer, Chairman, UPASI Spices Committee, said that pepper prices in the short-term would-be range bound at the current levels as there is an increase in demand for pepper, given its immunity boosting properties.
In the medium- to long-term, there could be gains in pepper prices as new planting and replanting activity were subdued in the last few years due to low prices. This should exert supply pressure and, in turn, aid price stability.
Global pepper production in 2019-20 was 5,91,946 tonnes, while domestic production was at 61,000 tonnes. The global production would be lower in the current year due to unfavourable weather, while domestic production is expected to be around last year’s levels.