The prices of pepper have risen by another Rs 80 per kg in the past 10 days, an unprecedented pace, say growers. This follows the announcement of a minimum import price (MIP) for import, announced early this month. Right after, domestic pepper rose 10-12 per cent to Rs 420 a kg on December 12.
Rohan Colaco, former executive committee member, Karnataka Planters' Association, and a major grower, says the price of black pepper is Rs 500 a kg at most physical terminals. Two weeks earlier, it was Rs 380 a kg.
There is good demand and there seems a supply squeeze, with about 40 per cent of farmers keeping back produce (the other 60-odd per cent have sold) in the expectation of the price touching Rs 600 a kg.
The commerce ministry had approved the Spices Board's proposal for fixing pepper's CIF (cost, insurance, freight) value at Rs 500 per kg as MIP, to protect the interest of growers. "In recent times, a decline in the domestic price due to cheaper import from other countries has been a major concern among growers. Prices have gone down by nearly 35 per cent in one year and resulted in hardship for growers," said a commerce ministry official on the rationale.
India's demand has been increasing at around four per cent annually. It is currently estimated at 60,000 tonnes a year. Domestic production in the coming season is estimated at 65,000-70,000 tonnes. Vietnam's is estimated at 170,000-190,000 tonnes.