Business Other News 25 Nov 2019 Imports putting pres ...

Imports putting pressure on domestic pepper prices

DECCAN CHRONICLE. | RITWIK MUKHERJEE
Published Nov 25, 2019, 2:10 am IST
Updated Nov 25, 2019, 2:10 am IST
The Spices Board put the projected volume at a marginally higher level. The board, in its report submitted at the IPC meeting, pointed out that the Indian pepper production is likely to end with 48,000 tonne this year (2019-20) compared with 4.94,200 tonne of world production.
 The Spices Board put the projected volume at a marginally higher level. The board, in its report submitted at the IPC meeting, pointed out that the Indian pepper production is likely to end with 48,000 tonne this year (2019-20) compared with 4.94,200 tonne of world production.

Kolkata: In a little over two months from now, the harvesting of pepper will begin in India. February is the normal time for pepper harvesting. However, the pepper output is projected to see a sharp fall of 30 per cent this time round. In 2018-19, India harvested 64,000 tonne of pepper but it is estimated to dip to around 45,000 tonne in 2019-20. In the year 2017-18, pepper production stood at 70,878 tonne.

Karnataka accounts for nearly 50 per cent of the domestic pepper production and is followed by Kerala and Tamil Nadu and the steep drop in pepper production during the current crop is mainly due to erratic climatic conditions in the growing regions in south India. The excess rainfall in August and September damaged the crop heavily.

The Spices Board put the projected volume at a marginally higher level. The board, in its report submitted at the IPC meeting, pointed out that the Indian pepper production is likely to end with 48,000 tonne this year (2019-20) compared with 4.94,200 tonne of world production. The board has also projected around 60,000 tonne of black pepper production and an import of 12,000 tonne for 2020.

Quite interestingly, this sharp fall in pepper production is expected to take its toll on domestic coffee production as well. This is because, pepper is normally grown as an inter-crop with coffee and arecanut in Karnataka, Kerala and Tamil Nadu. The coffee production is set to fall by 15-20 per cent this year.

The United Planters Association of Southern India (Upasi) pointed out that despite lower production this year, the prices of pepper have crashed to the range of Rs 319 per kg compared to around Rs 700 per kg four years ago. And Upasi attributed the drop in prices to import of the commodity from Sri Lanka and Vietnam. India imported nearly 11,000 tonne of pepper from Sri Lanka, which exports around 80 per cent of its produce.

Significantly, Sri Lanka has actually been dumping its produce in India by making use of the Indo-Sri Lanka free trade agreement. Sri Lanka  can export up to 2,500 tonne duty-free and the balance by paying a mere 8 per cent import duty. Sri Lanka allegedly imports pepper from Vietnam and re-exports to India because direct imports from Vietnam into India attracts 50 per cent import duty. The pepper imports have shown further increase of 700 tonne in October as well as duty free imports for value addition and re-exports stood at 1,300 tonne. These imported pepper from SAFTA and ISFTA at an minimum import price of Rs 500 per kg is continuing when local prices in Sri Lanka is Rs 275 per kg and Indian price stood at Rs 325.

Analysts are of the view that it is because of this heavy imports, India failed to see any upward movement in prices of pepper although the domestic output was low last year. This year, a similar situation is expected with an even lower domestic production, analysts said.

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