Spices board buys black pepper at premium to spot

The Indian Spices Board is buying organic black pepper from farmers at a premium of Rs 30 per kilogram over the price in the spot market here, for its 'Flavourit' brand of spices.

"Our thrust on promoting organic pepper is to counter the threat posed by Vietnamese pepper to Indian exports," chairman C J Jose said on Tuesday.

Vietnam is currently the world's largest producer and exporter of black pepper. The average price differential between Vietnamese and Indian pepper is in the range of $400 per tonne, with Indian pepper being more expensive. 
 

The rate card Prices of various spices under the Flavourit brand
	Quantity	Delivery in India (in Rs)	Overseas (in US$)
(Variety)
Organic black pepper	250 grams	135.00	15.50
(MG1)
Organic black pepper	250 grams	175.00	16.50
(TGEB)
Small cardamom	250 grams	295.00	18.50
Vanilla beans	100 grams	925.00	39.50
Organic vanilla beans	100 grams	1,060.00	49.00

"As against the average price of $1,250-1,300 per tonne for Vietnamese black pepper, Indian exports of pepper are priced at $1700 per tonne. We need to find our niche to make up this difference and sustain overseas demand for Indian pepper," Jose said.

The Spices Board is procuring organic black pepper at Rs 120 per kilogram. Spot price of organic black pepper in Kochi was quoted at Rs 90 per kg today. Kerala produces about 100 tonne of organic black pepper annually, traders said.

"Demand for organic black pepper comes primarily form Italy and Germany, and it is used mainly for medicinal purposes," said Alex Mathew, a Kochi-based trader.

"Promotion of organic cultivation (of spices) is going to be a very important activity of the board," Jose said.

The food industry is growing at about 2-3 per cent, globally. However, the organic segment of this industry is growing at 20-30 per cent.

"It (organic segment) may appear as a miniscule part of the global food industry now. However, if the current momentum is maintained, the market for organic products is set to grow manifold," he added.

The Spices Board launched organic black pepper, small cardamom and vanilla beans under its Flavourit brand last month.

"With Flavourit, we are targeting the premium segments of the Indian and overseas markets. In fact, we are in talks with some strategic marketing consultants in Germany and San Francisco, U.S.A. for marketing our products there", Jose said.

IDBI Bank, HDFC Bank, UTI Bank and Citibank, and Indian Postal Department are partners in the marketing of Flavourit brand of spices, he said.

The Spices Board is also planning to launch vanilla extracts and other spices under the Flavourit brand going forward, he added.