The Hindu Business Line : Kerala pepper procurement makes no impact on prices

PEPPER procurement by the Kerala Government which commenced last week does not seem to have made any impact on the prices as instead of pushing it up, prices have shown a declining trend.

The spot prices dropped by Rs 400 a quintal compared to that on January 8 last, while the fall in futures prices ranged between Rs 200 - Rs 400 a quintal. As against the prices on January 15, both spot and futures declined on Monday.

Spot prices on Monday were MG 1 Rs 6,900 and un-garbled Rs 6,600 a quintal compared to Rs 7,300 and Rs 7,000 on January 8 and Rs 7,000 and Rs 6,700 on January 15 respectively.

Futures prices on Monday were February Rs 7,076 as against Rs 7,460 on January 8, March Rs 7,192 (Rs 7,583), April Rs 7,429 (Rs 7,710), May Rs 7,359 (Rs 7,637) and June Rs 7,855 (Rs 8,151) and July - to be opened.

There was more selling pressure. Investors who were buying spot and selling futures have almost stopped buying spot as the premium disappeared, Mr Kishor Shamji, President, India Pepper and Spice Trade Association, told Business Line on Monday. The bull speculators were now liquidating futures, he said.

If indigenous pepper were to be made competitive with imported and "tax evaded" pepper in the domestic market, the Kerala Government should reduce purchase tax from 4 per cent to 2 per cent, besides putting pressure on the Centre to do away with the C Form and F Form requirement. Existence of this condition has made tax evasion rampant, he alleged.

Sri Lanka has reduced its pepper price to $1,450 a tonne from $1,550 and is likely to be brought further down, he saidFrom the overseas market there is virtually no demand.

As against our parity of $1,675 - $1,700 a tonne Indonesia was offering at $1,400, while Brazil at $1,350 - $1,375 a tonne.

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