The Hindu Business Line : Lankan pepper marketed under domestic brand?

MARKETING of Sri Lankan pepper as a produce from Kodagu under a popular brand name, allegedly by a Karnataka-based company, in the north Indian markets has weakened domestic demand.

According to market sources, 25 containers of Sri Lankan pepper have arrived at the Chennai port during the past two months. As a result, most of the north Indian markets are flooded with the imported stuff, they alleged. Normally, before the beginning of Navaratri festival, there is good demand from the grinding industry and wholesalers. However, this year, so far, such demand has not picked up.

"After the monsoon, before the commencing of the festival season, the grinding industry gets activated resulting in increased demand for pepper. An estimated 50 per cent of the demand is from this segment. But, they seem to have been supplied with imported pepper," sources told Business Line.

Despite weak demand, the market has slightly shown an upward trend following reports of a possible announcement of export subsidy for pepper.

The Kerala Government's intervention by procuring 4,800 tonnes of pepper, to arrest the price fall, had turned out to be futile so far in the absence of an effective and proper mechanism to restrict duty-free imports from Sri Lanka, they said. As a result, the current monthly domestic demand of around 3,000 tonnes is being met by the Sri Lankan supply.

Announcing a subsidy after the grinding industry and wholesalers had procured large quantity of imported pepper might not benefit the growers, sources pointed out. Therefore, if the subsidy were made available without further delay, an estimated 10,000 to 12,000 tonnes of unsold stock with the exchanges would get absorbed, besides creating a positive impact on the domestic price, they claimed. The next crop is expected to arrive in the market from November, they pointed out.

In the international market, buyers in Europe and the US buy and stock pepper before the beginning of winter. In fact, as a prelude "enquiries from overseas buyers are now floating but, unfortunately, wrong signals are going out from here. Our own sellers are driving them away indicating that the prices might drop after the subsidy is announced," they alleged.

The spot prices of MG 1 and un-garbled pepper on Wednesday remained at the weekend level of Rs 6,450 and Rs 6,050 a quintal respectively.

The futures contract were October Rs 6,475 as against Rs 6,509 during the weekend. November Rs 6,698 (Rs 6,632), December Rs 6,757 (Rs 6,816), January Rs 6,744 (Rs 6,830), February Rs 6,871 9 (Rs 6,960) and March Rs 6,990 (Rs 7,080) a quintal.

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