India: Black pepper market remains range-bound in August as arrivals cap gains

• Spot prices stay stable despite firm underlying sentiment
• Forward contracts gain as buyers anticipate stronger demand

India’s black pepper market remained largely range-bound in August as firm farmer holding and expectations of stronger demand balanced uneven arrivals and competition from imported pepper. Kochi spot prices moved between INR 717-722/kg during the month, ending at INR 720/kg on 28-Aug, unchanged from 7-Aug.

Arrivals fluctuate through the month

Kochi arrivals averaged around 694 tonnes/week in August. Arrivals declined from 745 tonnes in the first reported week to 685 tonnes, before falling to 558 tonnes on 21-Aug. A sharp recovery to 788 tonnes in the final week increased nearby availability and restricted further gains. Kochi stocks also rose to 15 tonnes by 28-Aug from 10 tonnes a week earlier.

Despite the late-month supply improvement, farmer selling remained relatively tight in Kerala, providing a floor to prices. Market participants indicated that growers were reluctant to release larger volumes at prevailing levels.

Forward market signals firmer undertone

The futures market showed comparatively stronger sentiment. October futures rose INR 8/kg, or 1.1%, to INR 731/kg, while December gained INR 5/kg, or 0.7%, to INR 730/kg. Open interest shifted from the expiring August contract towards later maturities, with October OI at 103 and December at 34 by month-end.

The firmer forward curve suggests participants expect demand to improve beyond the immediate period, particularly with restocking ahead of the year-end holiday season.

Outlook

The market is likely to enter September with a firm but range-bound bias. Improving domestic and export demand could support prices, while higher arrivals, rising stocks and availability of imported pepper from origins including Sri Lanka, Vietnam and Indonesia may cap the upside.

The key variables will be Kochi arrivals, farmer selling, import availability and the pace of domestic and export buying. A sustained price breakout will require demand to strengthen faster than supply.