Spices Board advises traders to create a niche market

Value addition, organic farming and labelling ""these three mantras that is being preached by the Spices Board for boosting India's pepper trade seems to have fallen on the deaf ears of traders.

The country's pepper exports continue to head south with the figures having touched the lowest mark in 2004-2005 (April-March) since 1958-59's export of 11,671 tonne.

According to Spices Board data, total exports stood at 14,150 tonne at Rs 121 crore in 2004-05.

"Pepper export as such is difficult to sustain as we have lost competitive edge to other producing countries. We need to identify niche markets to retain our space," said C J Jose, chairman, Spices Board.

Vietnam has emerged as the leading producer and exporter of pepper in the world.

"We need not sit idle on this situation. We have to take innovative measures to regain our share in the market," he said.

Oleoresin extraction, organic pepper and labelling are the areas that would help us to stem the downslide, he said.

"India has already emerged as the key centre of oleoresin and spice oil extraction industries. Pepper is a major commodity used by extraction industries," he said.

"Organic pepper is another area that would help us to establish a niche market," he said. The board is willing to buy organic pepper at Rs 120 per kg compared to Rs 64 per kg for the normal garbled pepper, he added.

Malabar Grade-1 and Tellicherry Grade-1 still commands a premium from some buyers in Germany, Japan and even the US.

"This is a good opportunity to develop these labels into sustainable brands," said Kannan, director marketing, Spices Board.

Jojan Malayil, a pepper exporter, is however, not convinced by this argument.

"Market for organic pepper is very small. I think they have not developed a critical mass yet," he said.

Oleoresin market is also operating in a smaller trajectory compared to the pepper market, he said.

Some industry leaders also called for comprehensive long-term policies to boost the spice trade.

"We need to have a long-term perspective based on ground realities," said Sanjay Mariwala, a leading pepper exporter.

"We need to realise that we lost our position as the leading producer-exporter. We need to acknowledge that as an international commodity, the prices are shaped at the global level," he said.

Pepper exports from India are coming down since 1997-98, both in quantity and value.

In 2004-05, total exports were down to 14,150 tonnes, worth Rs 121 crore compared to 16,635 tonnes worth Rs 142 crore in 2003-2004.