Pepper plunges as Kerala halts buying

The price of garbled pepper has crashed to Rs 6,700 a quintal from Rs 7,000 a few days ago.

Traders said the world pepper market is already in a difficult situation due to low prices and oversupply.

"The declaration by the state chief minister Oomen Chandy to stop pepper procurement operations has made matters worse," he said.

A section of exporters here believe that the price might settle at Rs 6,000 a quintal in the short term.

The state government's decision came about because the export of black pepper is a loss-making exercise for it and the Union government has refused to provide any incentives in the matter despite specific requests.

The Kerala State Co-operative Marketing Federation, the procuring agency, had bought 4,800 tonne of pepper for exports till date this year, sources said.

Pepper has crashed globally with leading exporter Vietnam slashing prices to $1,180 for 500 gm/litre, $1,250 for 550 gm and $1,330 for ASTA grade.

Exporters said European and US buyers are purchasing only in small quantities and this had affected prices significantly, especially during the harvesting season in India and Vietnam.

The futures contract for May has gone down to Rs 6,640 today from Rs 6,825. All other contracts have also moved into negative territory.