India: Black pepper prices ease despite lower arrivals

• Kochi spot prices fall 0.4% w-o-w even as arrivals drop by 17%
• Oct futures remain unchanged, Dec contract declines by 0.8%

India’s black pepper market remained stable to weak during the week ended September 25, with Kochi spot prices easing despite lower arrivals. Spot prices declined to INR 723/kg from INR 726/kg on 18 September, while October futures remained unchanged at INR 730/kg. December futures fell 0.8% to INR 734/kg from INR 740/kg.

Lower arrivals offer limited price support

Kochi pepper arrivals fell 17.3% w-o-w to 700 tonnes (t) from 846 t. The decline in fresh supply could normally provide support to spot prices, but the marginal fall in prices indicates that buying interest remains insufficient to absorb the available supply at higher levels.

The combination of lower arrivals and weaker spot prices suggests that market participants remain cautious, with demand yet to show a meaningful improvement.

Futures indicate subdued buying interest

October futures were unchanged at INR 730/kg, while December futures declined to INR 734/kg. Open interest in October increased marginally to 74 t from 73 t, up 1.4%, alongside an unchanged price.

The increase in open interest points to some fresh positioning, although the price and open-interest combination alone does not establish the direction of market sentiment. December open interest remained at zero.

Stocks remain stable

Pepper stocks at Kochi remained unchanged at 35 t during the week. Stable inventories despite lower arrivals provide some supply-side support to the market. However, the decline in December futures and marginal easing in spot prices indicate that this support has not translated into stronger buying momentum.

Outlook

Black pepper prices are likely to remain largely stable with a weak undertone in the near term. Lower arrivals and stable stocks could limit downside pressure, while subdued demand and weaker deferred-month futures may cap any recovery. A sustained price improvement will depend on stronger buying interest and improved demand absorption.