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Pepper is one of the oldest spices known in India and believed to have originated from Indian sub-continent. It is scientifically known as Piper nigrum. Pepper is also known to be one of the earliest commodities to be traded across the countries. Apart from India, pepper is produced in Brazil, Sri Lanka and Vietnam.
Economically Important Products:
Dried ripe berries are used as a spice for seasoning either in powdered form or as whole.
Essential oils and oleoresins extracted from black pepper are used in the preparation of piperazine, which in turn used for medicinal purposes. 
Climate and Cultivation
Pepper is a perennial crop and has lifetime of around 40 years. It starts producing the berries from 2-5 years of planting. It requires a hot & humid weather with a good rainfall. Pepper needs partial shades to prosper and hence it is grown as mixed crop.
Crop calendar: It’s a perennial crop usually sown in May – Jun
World Scenario
World pepper production has stagnated around 3.5 million tons in the past decade. Vietnam is the largest producer of pepper in the world accounting for about 35% of total world production followed by India and Indonesia with about 16% share each.
Vietnam is the only country whose production has been rising during the past 10 years while other producing countries witnessed either a fall or stagnation in output. Production in India has also been declining steadily from 6.5 lakh tons in 2003 to about 4.3 lakh tons in 2012.
Vietnam is the largest exporter of pepper in the world accounting for nearly half of the total pepper exports in the world followed by Indonesia, Brazil and India. However, India and Indonesia are the largest importers of pepper followed by Malaysia and China.
Domestic Scenario
India has been home for spices but pepper production as well as consumption has been declining steadily during the past 10 years. Output dipped from about 90 thousand tons in 2005-06 to about 42 thousand tons in 2011-12. Further, it is expected to dip below 40 thousand tons in 2013-14.   
Apart from production consumption of pepper also declined steadily during the past decade. As per the data published by the International Pepper Community, domestic consumption of pepper declined to about 42.5 thousand tons in 2011-12 from more than 60 million tons in the early 2000s.
State-wise production
Pepper production in India is largely concentrated in the southern states. Kerala used to be the largest producer of pepper in India but its output has declined steadily during the late 2000s. It has declined steadily from about 45 thousand tons in mid-2000s to about 16 thousand tons in 2011-12. But at the same time, output from Karnataka and Tamil Nadu has been rising steadily. Nevertheless, the overall production in the country has declined significantly over the past decade.
Major Markets
Spot markets:
Cochin, Alleppey, Calicut, Coorg, Tellicherry, Kasaradod, Mumbai, Delhi
Futures markets:
NMCE and India Pepper & Spice Trade Association, Kochi (IPSTA)
External Trade
India exports as well as imports pepper. Pepper exports from India include whole black, white and green pepper, ground pepper, pepper oil and oleoresin. Whole black pepper forms the major part of exports followed by ground pepper and oleoresin.
India imports mainly whole pepper and apparently re-exports the products like ground pepper and oleoresin. 
Major export destinations: US, UK, Germany, Australia, Canada, Netherlands, Spain other European countries.
Major import sources: Sri Lanka, Indonesia, Vietnam, Brazil and Madagascar
Factors Influencing Prices
  • Supply side factors: Domestic output expectations, crop condition, acreage etc., Output expectations in major producing countries
  • Demand side factors: domestic and international demand expectations.
  • Trade & tariffs: Imposition of trade restrictions and tariff changes by the major exporting and importing countries.
  • Policy changes: Any change in government policies that may affect production and trade in India as well as other major producing and consuming countries.
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