BLACK PEPPER PRICES TO SOFTEN SOON ON SRI LANKAN IMPORT

, 20/02/2016, 09:50 GMT+7

BLACK PEPPER PRICES TO SOFTEN SOON ON SRI LANKAN IMPORT

BLACK PEPPER PRICES TO SOFTEN SOON ON SRI LANKAN IMPORT

The sharp rise in black pepper prices is likely to moderate soon, in light of the increase in supply. This is not because of a rise in local production, but thanks to import, especially from Sri Lanka. Dealers from Delhi, Mumbai, Bengaluru, Chennai and Kochi  are importing around 750 tonnes from Sri Lanka at eight per cent duty. This is over and above the duty-free quota of import. The shipment is likely to reach various ports soon, said market sources.

The importing price is $9,500-9,750 a tonne against the Indian offer of $11,400.

According to the trade pact with Sri Lanka, 2,500 tonnes can be imported duty-free and 22 suppliers had got the licences for duty-free import. Roughly 350 tonnes of these had already reached the Indian market, especially in Delhi, Mumbai, Chennai and Bengaluru. Apart from this, more parcels of pepper, which was seized earlier on alleged mineral oil content, will be released in the next few weeks. Six-hundred tonnes were already released. This is for the first time that a major chunk of the 6,400 tonnes of stock, sealed in December 2012, is being released.

This was made possible after a Kolkata-based food testing laboratory okayed 1,500 tonnes.

The commodity’s local supply will be ensured through import and this is likely to moderate the prices, said Kishore Shyamji, a leading trader. He said the market would not collapse, but the incessant increase for the past month might be arrested. It is the local festival demand in north India that helped the market rise. Stock-holding for the winter season is active now. There is also robust demand is from the grinding industry.

The pepper market will be on a tight mode mainly because of local demand. Local growers are not immediately selling the produce as they expect further increase in prices.

Since a sharp fall in production is expected in the next season, buying interests were active during past couple of months, said Shyamji.

The Indian stuff has lost its sheen in global as India offers the highest price across all origins.

Vietnam now offers $9,800 a tonne, Indonesia $9,700-9,800 and Brazil offers $9,500. Overseas buyers were not considering India, except the ones who have special preference for Malabar grade pepper. Currently, the Indian market is driven by local demand only.

Meanwhile, the latest projections indicate a total output in the range of 50,000 tonnes this season.

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