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G.K. Nair

With Vietnam offering pepper at competitive prices, much of the market hold has been lost.

Kochi , May 4

PEPPER exports dropped to below 15,000 tonnes in 2004-05, lowest ever in the last 45 years of the history of the country's spices exports.

Continuous fall in exports of pepper to the US, once the main market for the commodity, has led to the decline, according to official sources. Shipments of pepper to the US in 2003-04 was a meagre 5,766 tonnes as against 9,656 tonnes in 2002-03. In 2001-02 it was 11,265 tonnes while in 2000-01 it was 10,851 tonnes. When the exports from Vietnam fell in 1999-2000, the exports increased to 24,475 tonnes.

The total exports of pepper last fiscal stood at 14,150 tonnes valued at Rs 121.40 crore as against 16,635 tonnes worth Rs 142.77 crore in 2003-04.

Ever since Vietnam emerged as a major producer and supplier of black pepper, India lost its prime position in the world market of the commodity, the sources said. The highest-ever exports in the recent past were in 1999-00 when the shipments stood at 42,824 tonnes valued at Rs 885.28 crore, when the supply from other origins fell sharply on crop failure.

The highest ever value realisation was also in that year ever since the country started exporting pepper in 1949-50.

On the decline in exports to the US, Mr Kishor Shamji, President, India Pepper and Spice Trade Association (IPSTA), told Business Line that the overseas markets "are just going by the prices and not by the quality of the product". He said Vietnam has been offering pepper at a competitive price and hence, much of the markets had been lost to it. The exports in recent years have been fully confined to certain select markets such as Canada, Belgium, Australia and Japan, where the consumers still preferred Indian MG1, he said. Even the imports from Vietnam by India were increasing, he said.

Due to huge domestic demand, the prices of Indian pepper remained at higher levels making it uncompetitive in the international market. "Our parity at present is $1,550 a tonne as against $1,375- $1,450 offered by Vietnam". Even at the difference of $100-150 a tonne between the Indian price and that of other origins, consumers in selectmarkets were ready to buy MG 1, he added.

Exports from Vietnam have been on the increase. As against 74,635 tonnes valued at $105.98 million in 2003 Vietnam exported 98,494 tonnes worth $133.72 million in 2004. According to reports, Vietnam has targeted to make 40 per cent of its exports comprising high quality products.

The Vietnamese Pepper Association reported to have been encouraging its members to meet the demand by further investing in processing machinery.

It had been actively engaged in sending trade delegations to consuming countries in the Europe and West Asia as part of its efforts to increase exports to these markets.

Meanwhile, imports of pepper into India have been moving up substantially to touch 17,000 tonnes in 2004-05 from around 14,000 tonnes the year before. In fact, the imports had crossed the exports.

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