Light black pepper import allowed

The government allowed import of light black pepper under the advance licence scheme, a notification issued by the Directorate General of Foreign Trade said. However, the advance licence for the import of pepper has been banned.

Last month, spices exporters had urged the ministry of commerce to restore the facility of importing pepper under the advance licensing system.

Light black pepper is smaller and not a fully developed variety of pepper, which is used to extract pepper oil and other value-based products.

Oleoresin manufacturers use the light black pepper variety to manufacture various products, which are then exported.

India is the leading exporter of oleoresin and value-added pepper products in the world. Traders and industry said the light black pepper is around 30 per cent cheaper than fully grown pepper.

On Wednesday, spot garbled pepper prices were at Rs 6,350 per 100 kg, down Rs 50 from their previous close.

Meanwhile, black pepper prices are expected to be down following ministry of commerce allowing the import of light black pepper under the advanced licence scheme, traders said. Turmeric and cardamom prices are likely to remain flat, they said.

Opinions were divided on the impact of the decision to restore advance licence scheme for the import of light black pepper.

Sentiment may turn bearish in the short-term following the restoration of advanced licence scheme for the import of light black pepper, said Jojan Malayil, a trader.

"Speculators may liquidate their position following this and it may pull down the market for a while," he said.

However, some other traders said pepper prices are likely to make a slow and steady progress in the coming days.

"At the current level, the prices have almost bottomed out. From this level it can only make marginal gains'" said Krishnakumar Bhammer, a trader.

Pepper traders are also banking on the finance ministry approving a 210-million-rupee export incentive scheme for the commodity soon.

This would also help the prices to move up, he said.

"The scheme is expected to get the clearance soon. But I can't tell the exact date," said Spices Board chairman C S Jose.

Director General of Foreign Trade has allowed import of light black pepper, mainly used by the oleoresin industry under the advanced licence scheme.

June contract on National Multi Commodity Exchange of India has stabilised at the rate of Rs 6,000 per 100 kg, said another trader. Except for one day June contract prices remained the Rs 6,000 per 100 kg level, he said.

However, traders also cautioned against excessive speculation, as it would be difficult to sustain rise in prices in the long term.

On a week-on-week basis, the commodity has gained between Rs 50 to Rs 81 per 100 kg on spot and June contracts.