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G K Nair

KOCHI, May 5

PEPPER prices recovered on Monday after sharp fall during the weekend by over Rs 500 a quintal. Ready pepper prices fell by Rs 500, while futures slid by Rs 525 to Rs 885 on increased availability and lack of demand both from domestic and foreign market during the weekend.

The spot prices on Monday were MG 1 Rs 7,300 and un-garbled Rs 6,900 per quintal as against Rs 7,800 and Rs 7,400 last week. Futures prices on Monday were May Rs 7,025 as against Rs 7,525 last week. June Rs 7,215 (Rs 7,775), July Rs 7,300 (Rs 8,025), Aug Rs 7,450 (Rs 8,180), Sep Rs 7,550 (Rs 8375) and Oct Rs 7,725 (Rs 8,575)

Market sources here told Business Line that increased availability of pepper in the market had been caused by "heavy imports from Sri Lanka as well as duty free imports from Vietnam for re-export with positive value- addition entering the domestic market illegally due to inadequate monitoring by Director-General of Foreign Trade as well as Customs and Central Excise". This has led the local prices for pepper to crash heavily hurting the farming community in particular and the economy of Kerala in general.

Pepper imports into the country have jumped five-fold as an after effect of heavy imports. The world pepper exports had declined by 13 per cent whereas exports of pepper by Sri Lanka had increased 600 per cent in the first quarter of 2003 and the "major imports of Sri Lankan pepper is to India and, therefore, the Indian domestic prices have crashed".

They said the importers were holding back the market. The sources alleged that pepper imported for positive value addition i.e., cleaning and grading, and re-export were shipped out as MG 1 at a premium price. When a certain quantity of MG1 is mixed and that much quantity of pepper of foreign origin imported at low prices would be available for sale in the domestic market at a price higher than that of the landed price, they alleged.

When contacted, Mr S. Kannan, Director, Marketing, Spices Board said incidences of pepper imported from other origin being re-exported as Indian black pepper MG 1 had come to the notice of the Board.

"A particular instance of a consignment declared as Indian pepper MG1 though it was evidently a case of re-export of pepper imported from elsewhere", had come to notice, he said.

Indian pepper has a premium position in the world market over those of other origin due to its intrinsic quality. "The identity of our product is being destroyed through such unscrupulous activities," he said.

So as to check such activities the Board has advised the Customs authorities "not to pass bills containing mis-declaration of the nature described above". Those who import pepper would have to satisfy the Customs authorities about fulfilment of their export obligations, he said.

Availability is expected to go up when the schools re-open in June in Kerala as the farmers will start selling their produce. This would result in some kind of selling pressure in the market. Besides, Malaysian pepper would also hit the markets from mid-May. Given this situation the buyers overseas have adopted a wait and watch approach anticipating a further drop in the prices.

Meanwhile, the domestic demand in the country is met through the illegal route evading tax. "The Government policies are responsible for this predicament", they said.

The pepper prices in the international markets are declining with Vietnam offering at $1,200 per tonne, Brazil $1,400, Malaysia $1,450, Indonesia $1,500 and India $1,550.

Apart from pepper and cardamom, chilli and turmeric are also being imported in large quantity from China, Thailand, Burma and Vietnam for re-exporting duty free under the advance licence scheme. "All these imports will hamper domestic producers badly," they alleged.

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