The Hindu Business Line : Marketfed awaits Kerala's approval to procure pepper

THE Kerala State Cooperative Marketing Federation (Marketfed) has sent a proposal to the State Government for procurement of pepper, cardamom and arecanut, following the Chief Minister's recent announcement that the Government would intervene in the market to arrest the fall in the prices of these commodities.

However, the Government has yet to approve the proposal, an official source at Marketfed told Business Line. He said it might procure the commodities at a higher price i.e., Rs 5-10 above the ruling market prices to ensure the farmers of a comparatively better price.

Already pepper and cardamom prices are ruling at lower levels in the terminal as well as the open market. The main reason attributed to the fall in pepper prices is the imports under FTA, which trading sources claimed, is flooding the domestic market. At the same time some of the exporters said that the Indian pepper remained uncompetitive in the international market in terms of price.

Meanwhile, traders also expressed apprehension that in the event of unrestricted imports of Sri Lankan pepper and that of other origins via the Island neighbour as its produce at low prices were allowed then the very purpose of the procurement would be defeated.

On the other hand, there could also be chances that the procurement agency might be buying the pepper imported at low prices.

Welcoming the Government's decision to intervene in the market, Mr Kishor Shamji, President, India Pepper and Spice Trade Association (IPSTA), said the efforts would be fruitful if the Government took some action to put a cap on the quantity of pepper imported under FTA from Sri Lanka. Add to this, if the Government reduced the taxes the indigenous pepper would become competitive with that of imported in the domestic market.

If the market price remained much below the procurement price then the procurement agency would land up in heavy losses, market observers pointed out.

In fact, the growers are holding back their produce anticipating that the Government would commence procurement. This has resulted in thin arrivals at the terminal market. Consequent lack of selling pressure even after the commencement of the harvesting season had helped the domestic prices to recover last week after falling below the Rs 60 barrier a kg, in the previous week, trading sources said.

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