Festival demand. Rising imports hit business prospects of domestically produced pepper 

Increased arrivals of imported pepper from other producing countries are reported to have hit the prospects of domestically produced commodities due to its doorstep availability at lower prices in consuming markets.

Traders pointed out that pepper rates in producing countries have started declining and are hovering in the range of $2,500-2,600/tonne in Brazil, $3,000 in Vietnam, and $5,000 in Sri Lanka. Of this, Brazilian and Vietnamese varieties are finding markets in India under mis-declaration either as cotton waste or paper waste, they alleged.

This imported stuff is available in all the consuming markets in the country at ₹490-495, while Indian prices are at ₹490. With GST and freight rates, it would come to around ₹515. According to traders, the offered quantities for daily trading in the terminal market have come down and on average, it is 10-12 tonnes. Of this, the majority is imported stuff.

Diwali demand

Kishore Shamji, President, Indian Pepper and Spice Traders Association (IPSTA) said domestic pepper prices are holding up because of festival demand in upcountry markets and are on the rise ahead of the Diwali season, especially from masala manufacturers.

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They usually keep more quantities as inventories to meet the rising demand. Since more firms have started masala production units, the demand is expected to go up. Indian domestic consumption is on the higher side with a monthly requirement of 5,500 tonnes.

Sri Lankan pepper arrivals are on the rise and importers have been permitted to ship 2,500 tonnes without duty under Indo-Sri Lankan FTA with a minimum import price of ₹500 per kg. There are reports that more than 400 importers have been issued licenses so far, Shamji said.

‘Need more effective steps’

With the starting of Brazilian production next month, the farming community fears that more consignments would find inroads in the domestic market.

Citing the concern raised by desiccated coconut powder manufacturers on the imports from Sri Lanka, Shamji said the authorities should take more effective steps to curb all such imported commodities for the benefit of the domestic farmers.

Pepper production in India is expected to go up by 10-15 per cent both in Kerala and Karnataka from the last year's figure of 50,000-55,000 tonnes, thanks to good rains this year.

However, there are reports that the area of cultivation in Kerala is shrinking and without much replanting due to farmers' shift to cardamom in the Idukki region as they are finding it more lucrative than pepper, Shamji said.