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Entry of cheap Vietnam pepper hits domestic prices

Kochi: The ongoing harvest season and the influx of cheaper Vietnam pepper through Sri Lanka have pushed down black pepper prices in India by nearly 20 per cent in a year.

The prices have declined to around Rs 324 per kg from around Rs 390 per kg a year ago and may fall even further. “But in the past few days, arrivals have slackened and prices may not fall below Rs 300 per kg level,’’ said Kishor Shamji, a major exporter.

Prices have plunged in the past few months as large quantities of cheaper Vietnam pepper were being imported into the country through Sri Lanka with certificate of origin from the latter taking advantage of the lower import duty structure and circumventing the Rs 500 minimum import price fixed by India.

Expressing concern over the rising import, exporters had taken up the matter with the Centre with a request to tighten the monitoring of the imports. But so far, no concrete action has been taken, according to the exporters. “The traders have changed the mode of import. Instead of huge quantities, they are unloading 2-3 tonnes in different ports in South India and taking them in small lots by road to interior places in Kerala and Tamil Nadu and selling at Rs 280-290 per kg,’’ Shamji said. As a result, the volume of pepper import into the country has gone up in the current year. “Apart from the 16,000 tonnes normally imported by value-added exporters, another 25,000 tonnes must have come into the country,’’ said Jojan Malayil, CEO of Bafna Enterprises, an exporter.

Though pepper production in India is calculated to be around 60,000 tonnes, the actual quantity is expected to be less. Production in Karnataka and Kerala were hit by inclement weather. “At the current level of prices, growers may prefer to hold on to the stock and release them gradually,’’ Jojan Malayil said. Farmers in Vietnam, the largest pepper producer, have also started going for staggered sales as prices are below cost of production.

As a result, the Indian pepper export is likely to fall from 16,840 tonnes of 2017-18, which itself was one of the lowest in the recent times.