Spice Board recommends ban on cheap pepper imports as prices fall

From Rs 450 per kg 2 months back, pepper prices dropped to Rs 400 a kg on Wednesday

A few months after cheap pepper imports from Vietnam came under the scanner of the Food Safety and Standards Authority of India (FSSAI) for suspected contamination, the Spice Board has recommended a ban on the imports over quality concerns. The development comes at a time when cheap imports have brought down the pepper price to Rs 400 a kg, from Rs 650 a kg about a year ago. 

A B Rema Shree, director (research and development), Spice Board, said the board had recommended a ban on pepper imported from Vietnam as its quality had been a major concern. “It’s a policy decision, so the government needs to take a final decision,” the official added.

Earlier, the FSSAI instructed various nodal agencies and its offices across the country to check pepper imports into the country. The authority suspected that pepper coming in from Vietnam, through Sri Lanka, might be contaminated. Pepper has been a key intercrop for coffee growers. 

Three months ago, the Multi Commodity Exchange (MCX) launched trading in Malabar Garbled Black Pepper futures contract. It was expected this would bring some stability in prices, but it did not help as cheap imports were a major problem, say growers.

Pepper prices dropped to Rs 400 a kg on Wednesday from Rs 450 a kg two months ago and Rs 600-650 a kg a year ago. Imported pepper was available at Rs 350 a kg.
 

Anuj Gupta , head - research (commodities and currencies) at Angel Broking, said Indian black pepper prices on futures exchange continued to shrink with rising imports from Vietnam routed through Sri Lanka.  

The October futures for delivery in the National Commodity and Derivatives Exchange Limited (NCDEX) fell nearly 6.2 per cent from last week’s high to Rs 47,240 a quintal on Tuesday.

Rohan Colaco, former executive committee member at Karnataka Planters Association and a leading planter, said it was clear that imports were hurting local pepper prices.

As pepper was an income balancer due to hard times in coffee plantation, the price drop had made survival of growers difficult, he added.

According to market sources, Vietnam exported 3,000 tonnes of pepper to Sri Lanka in July, and another 2,000 tonnes in August. Most of this has come to India. Imported pepper has more takers as it is cheaper. Import from Sri Lanka carries a duty of 8 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 is in the range of 2-2.2 lakh tonnes, while in India it’s dropping.

Spice Board data show that in 2012-13, pepper production was 65,000 tonnes, which dropped to 55,500 in 2016-17, mainly due to industrialisation in pepper-growing areas, unfavourable weather conditions, among other factors. Karnataka has now overtaken Kerala to become the largest cultivator of pepper.
 

India’s domestic demand for pepper is on the rise, increasing at four per cent per annum.