The Hindu Business Line : Pepper prices down on increased availability

INCREASED availability of imported pepper in the domestic market, coupled with reported suspension of procurement by the Kerala Government agency, has pushed pepper prices down both in spot and futures in the terminal market here.

According to statistics, black pepper imports through Kochi port during January - February this year were 2,880 tonnes, against 1,249.87 tonnes and 513.70 tonnes during the same period in 2004 and 2003 respectively. Total imports in January - December 2004 increased 4,029.54 tonnes to 15,923.87 tonnes, from 11,877.65 tonnes in 2003. Imports by extractors stood at 8,897.27 tonnes (4,973.09 tonnes). Meanwhile, re-exporters imported 7,027.63 tonnes of black pepper in 2004, compared to 6,936.27 tonnes in 2003.

Market sources alleged that despite the cancellation of advance licence facility by the Union Commerce Minister, imports in January and February 2005 doubled from that in the same months in 2004 and 2003. According to the sources, a good portion of imported pepper is entering the domestic market.

Increased availability of imported pepper has, in fact, defeated the very purpose of the Kerala Government's market intervention exercise under which it is said to have procured 4,200 tonnes at Rs 75 a kg. However, the reported suspension of procurement in recent weeks for want of funds has a affected the market, as growers started liquidating their produce in the local market by creating a selling pressure.

Upcountry buyers, confused over the implementation procedure of VAT, are keeping away from the market. All these factors have of late contributed to the decline in black pepper prices.

In the spot market on Monday, ungarbled pepper was sold at Rs 5,300 - 6,300 a quintal, against Rs 5,700 - 6,700 on April 4, while garbled was at Rs 6,800 a quintal against Rs 7,000 last Monday.

The futures have also shown a declining trend. The prices quoted for future deliveries on Monday: April Rs 6,896 a quintal against Rs 7,223 on April 4, May Rs 6,995 (Rs 7,327), June Rs 7,017 (Rs 7,350), July Rs 6,831 (Rs 7,155), August Rs 7,272 (Rs 7,617) and September Rs 7,375 (Rs 7,725).

Import from neighbouring countries under FTA is also definitely affecting adversely domestic prices because of the lucrative profit, sources alleged.

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