India's pepper exports may hit a 5-year low this fiscal
KOCHI: India's black pepper exports could hit a five-year low in the current fiscal amid consistently higher prices that have forced buyers to shun Indian shipments in favour of those from Vietnam and Brazil.
Exports shrunk 13% year-on-year to 3,900 tonnes in the quarter ended June. In FY17, pepper exports had plunged 37% to 17,600 tonnes.
Exporters said in the current year, shipments could drop further and may touch about 15,000 tonnes, close to the quantity exported five years ago.
“There is no demand for Indian pepper, which is priced at $7,000 per tonne compared with $4,000 of Vietnam and $3,500 of Brazil,“ said Jojan Malayil, CEO of Bafna Enterprises, a major exporter.
Vietnam, which is the world's largest producer, is estimated to have produced over 2 lakh tonnes of pepper this year. The country has exported 1.81 lakh tonnes in the nine months to Septem ber, according to a report by the International Pepper Community.
Cheaper pepper from Vietnam had made its way to India through Sri Lanka, taking advantage ge of the 8% duty under SAARC agreement as against 70% for other countries. This has pushed down Indian black pepper prices by 40% on-year to `420 per kg.“Indian growers are hoarding the stock as the prices are low,“ Malayil said. “As a result, the arrivals are poor. The export of value-added pepper is happening on imported pepper.“ As the monsoon has been normal, pepper output may not dip next year. With a good carryover stock from the current year, prices could further decline, traders said.
Though Indian pepper production is forecast to be around 50,000 tonnes, much of it have not come to the market. Even the National Commodity and Derivatives Exchange (Ncdex) and Multi Commodity Exchange (MCX), which resumed futures trade in black pepper after a gap of over four years in July, are struggling to get sufficient participation due to poor arrivals.