The rise in global pepper prices has brought a level of parity between domestic and imported pepper costs in India, potentially slowing down imports, particularly from Vietnam. With international prices increasing to around $4,400 per tonne, the landed cost of Vietnamese pepper now closely aligns with India's domestic prices, around ₹515-520 per kg. This change may reduce imports and, given the high domestic crop yield, could enable India to export pepper if current price trends continue.
Domestic pepper prices in India have been shielded from cheaper imports by a minimum import price set in 2018. The global price increase for black pepper is attributed to decreased production due to adverse weather and a shift in farmers' preference for other cash crops. Indian black pepper, known for its superior quality, competes favorably in the global market, fetching prices as high as $6,500 per tonne, in contrast to lower prices from other major producers like Vietnam and Brazil.
The ongoing harvest in India's major pepper-producing regions is expected to result in higher production compared to the previous year, with market arrivals increasing. However, the escalating crisis in the Red Sea, leading to higher freight costs, is adversely affecting India’s pepper exports, especially to Gulf countries, while Brazilian pepper benefits in the US market due to direct, quicker shipping routes that bypass the troubled Red Sea area.