Export cess withdrawal bill perks up black pepper

Introduction of the Bill to withdraw export cess for agricultural commodities helped black pepper market improve slightly in the opening hours on Wednesday,especially in the futures trading.

In early trade, prices increased by Rs 70 -85 per quintal but quoted lower in the fag end of the session.

Indian market now quotes $1,600 for a tonne while all other producing countries including Vietnam and Brazil quote $300 lower than India, which pinches the export market, traders said.

Indonesia has sold ASTA grade pepper to an Indian company at a price tag of $1,250 on free-on-board (FOB) basis, while the current Vietnam price is somewhere between $1,280 and 1,300.

Brazil is active in the global market with an offer price of $1,300 and Sri Lanka is ready to deliver at Mumbai for $1,340. Brazil renewed their interest to sell new crop positions despite the expectation of delayed harvest.

Traders said that this effected the local market, as import from Sri Lanka and other countries was a better option for traders in North India.

Price of Sarawak is at $1,550 and Ecuador ASTA is offered at $1,250.But growers of Kerala expect a fairly higher prices in anticipation of export subsidy which they expect soon.

It is quiet interesting that market is reacting to every good news and this has happened in the case of introduction of the bill in the parliament.

Spices Board chairman CJ Jose told Business Standard that there was no point in collecting export cess of 0.5 per cent as government spends more export promotion.

The total income from the cess is Rs 8-10 crore annually and maintenance of the accounts is a major concern of the board.

"It does not make sense in collecting the meager amount from the exporters and by abolishing the cess exporters will have some advantage." Jose added.