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Global pepper prices are likely to recover in the near-term, with China emerging a leading importer of Vietnam black pepper after the US.
Earlier, Chinese used to import pepper through cross border trade and now it is officially using its customs frontiers.
Quoting figures from the Vietnam Pepper Association, sources in the trade said that Chinese imports have gone up considerably from 3,112 tonnes in 2015 to 14,510 tonnes in 2017 and in the first three months of 2018 the numbers have gone up to 6,979 tonnes.
China buying
However, the sources said the Chinese procurement will not impact prices on account of excess pepper production globally. But the situation can change if overall production is affected and the rates can be blown up to any extent, sources said adding that the global prices for quality pepper (machine cleaned) are now in the range of $3,000-3,250 per tonne (₹214/kg, which is equivalent to MG1 grade delivered at Kochi).
Earlier, China had a major interest in white pepper and now they have started concentrating on black pepper in the wake of rising domestic consumption.
Meanwhile, KK Vishwanath, Coordinator, Consortium of Pepper Growers Association, said that the MIP notification issued by the Commerce Ministry started impacting pepper imports which has come down to 1,300 tonnes last month from 6,000 tonnes earlier.
Higher supplies
Asked whether the emerging situation will help revive the prices in the domestic market, he said that it would take some time due to increased inflow of stock by Karnataka farmers. Farmers need funds to meet their loan repayments as well as to prepare for monsoon agriculture activities. There are challenging times ahead for these farmers – who are predominantly coffee and areca growers – both in terms of lower yields and commodity prices.
As import restrictions are in place, Vishwanath said it is natural to believe that domestic prices may improve. However, today farmers are aware of the international developments, trends and price movements in commodities. Pepper harvesting is about to complete in Karnataka and the domestic production this year would end up in a very conservative yield of 55,000 tonnes.
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