Farming Import Spices

Domestic pepper prices begun to feel burden due to cheaper imports from Vietnam

Domestic pepper prices begun to feel burden due to cheaper imports from Vietnam
Image: Pixabay

Domestic pepper prices have begun to feel a burden due to cheaper imports from Vietnam.

Domestic pepper prices have begun to feel the burden of cheaper imports, particularly from Vietnam over the Myanmar border, with a ₹22 decline in the last three weeks.

Prices have dropped by 5% and are presently hovering in the ₹490-495 per kilogramme area for ungarbled types at the Kochi terminal market.

Kishore Shamji, a pepper merchant in Kochi, blamed the price drop on the availability of Vietnam pepper in the Indian market from the Indo-Myanmar border, where authorities have permitted barter trading. Singaporeans are the financiers of this pepper trade, financing shipments of both Vietnamese and Brazilian peppers that found their way to India over the border. It is also claimed that the imports are taking place under false pretences, such as using paper trash instead of pepper for dunnage in packaging, he said.

Also Read | Kerala High Court stayed DGFT to set Minimum Import Price of pepper at ₹500.

MNCs purchase through local agents

According to Shamji, a large amount of this imported pepper is now available in large amounts through ICDs in the major consuming markets of Delhi, Mumbai, and Jaipur. This has had a significant impact on domestic demand, and many multinationals are obtaining raw materials through their local agents, according to Shamji, who added that traders in Delhi are selling these pepper for ₹495 per kg.

The availability of imported pepper has also impacted domestic pepper arrivals into the terminal market for daily trade, as seen by the offered quantity, which has dropped to 25-30 tonnes, including Sri Lankan pepper held by investors. There are also rumours of Sri Lankan pepper being available on the market, albeit prices have plummeted to $5,600 per tonne from $5,800. Prices are projected to fall further as the harvest in the neighbouring country approaches, according to Shamji.

Pleading for restrictions

Shamji believes that if imports had not been present, domestic prices would have risen, particularly with the advent of monsoon season, when demand often increases.

‘In the last three years, the domestic pepper producers group has made many requests to the Union Government to establish curbs on unlawful border imports. But nothing has happened so far, and instead, the Directorate General of Foreign Trade (DGFT) has set a minimum import price (MIP) for imported pepper at ₹500 per kg, which is being flouted,’ Shamji noted.

In Karnataka, pepper prices have dropped by almost 10% in the last few days. ‘From approximately ₹540 levels a few days ago, pepper prices have suddenly dropped to ₹480 levels,’ said BS Jayaram, a Chikmagalur grower. This decrease is primarily due to cheaper imported Vietnamese pepper in the domestic market.

‘We expected prices to rise more because the crop in Karnataka was smaller this year, but cheaper imports will put pressure on pricing,’ he said.

Also Read | Indonesia suspended import of agri produce from India due to COA issue.

Effects of the heatwave

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

According to trade sources, the recently harvested pepper crop is expected to be approximately 55,000 tonnes, up from 40,000-to 45,000 tonnes last year.

The Central Arecanut and Cocoa Marketing and Processing Co-operative Ltd have petitioned the External Affairs Ministry to limit arecanut and pepper imports over the Indo-Myanmar border.

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