Despite a smart performance of the spices export during 2008-09, export of pepper dropped sharply both in volume and value. In the last financial year, pepper exports declined to 25,250 tonnes valued at Rs 413.74 crore against 35,000 tonnes valued at Rs 519.50 crore, registering a fall of 28 per cent in volume and 20 per cent in value.
Global economic turmoil is said to be a major reason for the fall in exports, but except India, all other leading producing countries like Vietnam, have performed well during the last year. In a press release issued by the Spices Board, US imports had declined to 55,000 tonnes in 2008 against an average import of about 60,000 tonnes a year. The release also cited that due to the economic slowdown, major US companies are keeping low inventories resulting in low import volumes.
The high price in India is the main reason for poor pepper exports. Consistently, for 10-12 months, the Indian price tags were higher by $300-$400 a tonne over Vietnam, Indonesia and Brazil, the three leading pepper suppliers of the world.
The sharp rise in the average freight on board (FoB) value was also a reason for the setback in exports. The average FoB price increased to Rs 163.86 a kg against Rs 148.43 in 2007-08, Rs 106.50 in 2006-07 and Rs 86.94 in 2005-06.
Compared to Vietnam, the average price is higher by Rs 40 a kg which made all the difference in the exports’ performance. Despite the economic turmoil, Vietnam’s exports increased to 53,692 tonnes in January-May period this year against 48,000 tonnes in the same period last year.
The higher price tags in India are mainly because of the stagnant production of around 50,000 tonnes and the wide demand in the domestic market. India consumes more than 50 per cent of its total production while Vietnam, which produces double than India, consumes only 10 per cent of its production.
The Indian pepper exports were 35,000 tonnes valued at Rs 519.50 crore in 2007-08 against 28,750 tonnes valued at Rs 306.20 crore in 2006-07, registering a growth of 22 per cent in quantity and 70 per cent in value. The WTO compatible subsidy for domestic transportation as well as freight subsidy helped to achieve the all-time high exports.
The Spices Board had set a target for 35,000 tonnes valued at Rs 520 crore for 2008-09, but the actual figures were lower by 28 per cent in quantity and 20 per cent in value. Interestingly, pepper had the poorest performance as ginger registered 25 per cent drop and chilli fell 10 per cent.
Contribution of pepper to the export kitty has also dropped this year. On the value front, contribution has been almost static at 8 per cent while volume-wise it dropped to 5 per cent from 12 per cent in 2007-08.
US topped the list of Indian pepper imports at 10,050 tonnes accounting for 40 per cent of the total exports, followed by the UK (1,475 tonnes), Italy (1,290 tonnes), Canada (1,265 tonnes) and Germany with 1,200 tonnes.
Source : Business Line