Farm gate sales of pepper by primary market dealers, at terminal market rates, seem to have made an impact on arrivals to Kochi trade, on Thursday.
Normally, crop arrivals would have gone up by 70-80 tonnes during mid-February, but have dwindled in the recent period purely due to farm gate sales. Kishore Shamji of Kishore Spices said Tamil Nadu-based dealers from Gudalurand Erode were active in such transactions and they had started procuring Karnataka pepper via Wayanad primary market as well.
However, the Kochi price was up by ₹1 per kg due to lower arrivals; it realised an average price of ₹314 for ungarbled. MG1 garbled grades fetched ₹334 while new pepper was quoted at ₹304.
According to Shamji, domestic demand continues to be sluggish due to the availability of Sri Lankan pepper, imported duty-free under the ISFTA. Traders with unutilised licence have started importing at MIP because of the inactiveness of Indian authorities in such trade, he added.
The primary market dealers also raised concern over the possible flow of Sri Lankan pepper into the domestic market, as the new crop for 2020 in the island nation is close to harvest, by mid-March or early April. With the crash in pepper rates, the price parity of Sri Lankan pepper with the Indian one is now ₹250 per kg. The traders there are also trying to make a case with Indian authorities to dump their crop in Indian markets.
According to Shamji, the emerging situation may undermine the interests of Indian pepper farmers across Kerala, Tamil Nadu, Karnataka, Andhra Pradesh and the North-East. The farming community, he said, also urged both the Commerce Ministry (DGFT) and the Finance Minister to not heed the request of Sri Lankan authorities, as doing so posed a threat to Indian pepper farmers.