Date:30/01/2006 URL: http://www.thehindubusinessline.com/2006/01/30/stories/2006013000460700.htm

Back Pepper continues to slide on weak demand, imports

G.K. Nair

Kochi , Jan. 29

PEPPER prices continued to slide on weak demand and alleged increased availability of the produce imported from Sri Lanka in the domestic market.

The spot prices on Saturday were MG 1 Rs 6,700 and Un-garbled Rs 6,300 a quintal, against Rs 6,800 and Rs 6,400 respectively the previous week.

Futures prices on Saturday were February Rs 6,721 (Rs 6,884); March Rs 6,900 (Rs 7,099); April Rs 7,134 (Rs 7,307); May Rs 7,107 (Rs 7,280); June Rs 7,443 (Rs 7,624); and July Rs 7,514 (Rs 7,696). "Domestic demand is there but much of it is met by imported catch crop of Sri Lanka," trading sources told Business Line.

According to them, Sri Lankan pepper is available at Rs 61 a kg in the country now. They are selling at $1,350-1,375 a tonne, against the Indian parity of $1,600 a tonne. Besides, those importing are selling futures also at premium, they alleged.

There is also demand from overseas, albeit thin.Vietnam is closed for the Chinese New Year. Indonesia was offering at $1,600-1,625 a tonne C&F, while Brazil at $1,575-1,600 C&F.

They added that the DGFT notification on January 23 on pepper imports under the advance licence system has led to pepper prices declining over the past 2-3 days. "The move is definitely at a wrong time when the harvesting season is round the corner and the transport subsidy for pepper exports exists," they alleged. The DGFT, vide the latest notification under the Foreign Trade Policy 2004-2009, had fixed the minimum value addition for pepper under advance licence at 15 per cent.

The downtrend in the prices seems to have made farmers to hold back their produce, resulting in poor arrivals at the terminal market.