Pepper prices under pressure as imports flood markets

V.Sajeev Kumar |Vishwanath Kulkarni | Updated on: Jun 01, 2022

Black pepper grain in the bowl on the table in the kitchen. Healthy eating and lifestyle. | Photo Credit: FotoDuets

Rates have dropped five per cent over the past three weeks

Domestic prices of pepper have started bearing the brunt of cheaper imports, especially from Vietnam through Myanmar border, witnessing a drop of ₹22 over the past three weeks.

Prices have registered a five per cent drop and are now hovering in the range of ₹490-495 per kg for ungarbled varieties in the Kochi terminal market.

Kishore Shamji, a pepper trader in Kochi, attributed the decline in prices to the availability of Vietnam pepper in the Indian market from the Indo-Myanmar border where the authorities have allowed barter trading. Financiers of this pepper trade are from Singapore, facilitating shipments of both Vietnam and Brazilian stuff which made its inroads to India by road through the border. It is also alleged that the imports are happening under misdeclarations as paper waste in place of pepper which is used for dunnage in packaging, he said.

MNCs buying to local agents

Shamji said a lot of this imported pepper is now available in good quantities in the big consuming markets of Delhi, Mumbai, and Jaipur through ICDs. This has considerably affected the demand in the domestic market and many multinationals are procuring the raw material through their local agents, Shamji said, adding that traders in Delhi are offering these pepper at ₹495 a kg.

The availability of imported pepper has also affected arrivals of domestic pepper into the terminal market for daily trading, which is evident from the offered quantity that declined to 25-30 tonnes including Sri Lankan pepper held by investors. There are also reports of the availability of Sri Lankan pepper in the market, though its prices have dropped to $5,600 per tonne from $5,800. It is expected that there will be a further drop in prices as the harvest in the neighboring country is round the corner, Shamji said.

Pleading for curbs

If the imports have not been there, Shamji said that the domestic prices might have gone up, especially with the onset of monsoon where the demand picks up normally.

“We at the domestic pepper growers association have made several representations to the Union Government in the past three years to put restrictions on illegal imports through the border. But nothing has materialized so far and instead, the DGFT has put a minimum import price (MIP) at ₹500 per kg for imported pepper, which is flouted,” Shamji added.

In Karnataka, the pepper prices have come down by around 10 per cent over the past few days. “From around ₹540 levels, a few days ago pepper prices have now come down to ₹480 levels,” said BS Jayaram, a grower in Chikmagalur. This decline is mainly on account of cheaper imported pepper in the domestic market from Vietnam. “We were expecting the prices to go up further as the crop was lower this year in Karnataka, but with these cheaper imports there will be pressure on prices,” he said.

Heatwave impact

KK Vishwanath, Co-ordinator, Consortium of Black Pepper Growers Organisation, said the reduced off-take from northern markets due to the heatwave has also influenced the domestic prices, which have turned volatile in recent weeks.

According to the trade sources, the recently harvested pepper crop is likely to be around 55,000 tonnes compared with around 40,000-45,000 tonnes produced last year.

The Central Arecanut and Cocoa Marketing and Processing Co-operative Ltd has recently urged the External Affairs Ministry to restrict the import of arecanut and pepper through the Indo-Myanmar border.

Published on June 01, 2022
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