Few months after the Food Safety and Standards Authority of India (Fssai) found that pepper imports from Vietnam may be contaminated, the Spice Board has said that it has recommended a ban on cheap imports. The development comes at a time when cheap imports have brought down pepper prices to Rs 400 a kg.
A B Rema Shree, director (research and development) at Spice Board, said that the quality of imported pepper has been a major issue and the board has recommended for a ban. "It's a policy decision, so the government needs to take a final decision," Shree said.
Fssai has instructed various nodal agencies and its offices across the country to check the import of pepper into the country. The authority felt that pepper coming from Vietnam, through Sri Lanka, may be contaminated.
Pepper prices continue to see a downward trend as cheap imports from Vietnam, through Sri Lanka, are flooding the market. Prices for pepper, which has been the intercrop and profitable crop for coffee growers, dropped to Rs 400 a kg from Rs 650 a kg.
Three months back, the Multi Commodity Exchange (MCX) had launched trading in Malabar Garbled Black Pepper futures contract. It was expected that this would bring some stability in pricing but it did not help as the major problem is cheap imports, say growers.
Pepper prices dropped to Rs 400 a kg on Wednesday, from Rs 450 per kg two months back and from Rs 600-650 a kg a year ago. Imported pepper is available at Rs 350 per kg.
Anuj Gupta, deputy vice-president of research (commodities and currencies) at Angel Broking, said, "Indian black pepper prices on futures exchange continue to shrink with rising imports from Vietnam routed through Sri Lanka."
The October futures for delivery in the National Commodity and Derivatives Exchange (NCDEX) fell nearly 6.2 per cent from last week's high to close at Rs 47,240 per quintal on Tuesday.
Rohan Colaco, a former executive committee member of the Karnataka Planters Association and a leading planter in Karnataka, said it is clear that imports are hurting local pepper prices, which have been spiralling down in a manner unexpected by growers.
As pepper is an income balancer due to hard times in coffee plantation, this is acting as a double whammy and survival is difficult for growers, he added.
According to market sources, Vietnam exported 3,000 tonnes of pepper in July to Sri Lanka. Another 2,000 tonnes were exported in August. Most of these exports to Sri Lanka subsequently come to India. Imported pepper has more takers as it is cheaper. Imports from Sri Lanka carry a duty of eight per cent under the Saarc agreement, compared with 70 per cent from other countries.
Vietnam has been increasing its pepper output in the past few years. Its production this year, according to unofficial calculations, is in the range of 200,000-220,000 tonne, while production in India is dropping.
Spice Board data show that in 2012-13, pepper production stood at 65,000 tonnes, which dropped to 55,500 tonnes in 2016-17, mainly due to industrialisation in pepper growing areas and unfavourable weather conditions, among other factors, in Kerala. Karnataka has now overtaken Kerala to become the largest pepper cultivation state.
India’s domestic demand for pepper is on the increase at around four per cent per annum. Currently, the demand is estimated at 60,000 tonnes per annum.