Low-quality pepper imports disrupt Kerala market, leave traders in a bind

Kalpetta: Despite a steep decline in pepper production, prices continue to drop, drawing attention to the unchecked import of low-quality black pepper. Initially intended for export as value-added products, this imported pepper is now being diverted into the domestic market, further driving prices down, according to market sources.

Pepper imports used to control prices
It is alleged that some unscrupulous players are importing low-quality pepper to deliberately prevent prices from rising. In June, when pepper prices surpassed Rs 700 per kilogram, an influx of 5,085 tons of imported pepper flooded the market, driving prices down to Rs 640 per kilogram despite no increase in local supply. By August, pepper prices had dropped by Rs 14 per kilogram. The current market price is Rs 646 per kilogram for ungarbled pepper and Rs 666 for garbled. (Garbled pepper is a type of Malabar pepper that is black in colour, nearly globular, and has a wrinkled surface.)

Trade forum data shows that 4,405 metric tons of pepper were imported from Sri Lanka, 597 from Vietnam, 36 from Brazil, 27 from Ecuador, and 20 from Madagascar. Under the Free Trade Agreement with Sri Lanka, up to 2,500 tons can be imported duty-free, with an 8 per cent duty imposed on quantities exceeding this limit.

Many traders, who had stockpiled large amounts of pepper in anticipation of rising prices, are now facing heavy losses. Anil Kottaram, a trader in Sulthan Bathery, Wayanad, told Onmanorama that despite this being a period when pepper prices typically rise, they remain low due to increased imports. "The forecast for the current year (2024-2025) suggests a 20-30 per cent drop in production due to heavy rains," he said. "Even with the festival season approaching, there are no signs of market improvement." This trend of ‘import-driven price drops’ began in 2014 when the price of pepper exceeded Rs 750 per kilogram in July, market players noted.

Kishore Shamji, director of the India Pepper and Spice Trade Association (IPSTA) and a pepper trade expert, remarked that even in Wayanad, once known for being Kerala's pepper hub, the supply has dwindled. "Unregulated imports have killed the market," he said. "Without local growers producing pepper, we have nothing to sell. I export only Indian pepper, and now I barely export anything—just one or two consignments every two or three months," he added.

Surge in imports spells trouble for traders and farmers
India's pepper import-export ratio has become increasingly concerning in recent years, with imports far exceeding exports. High imports lead to monetary loss, while high exports bring revenue, industry sources pointed out.

According to the International Pepper Community, India produced 68,500 metric tons of pepper in 2022, while imports stood at 43,224 metric tons, and exports totalled only 5,427 metric tons (7.92 per cent of total production). By contrast, Vietnam produced 1,63,000 metric tons and exported 2,01,995 metric tons, more than its production, while importing only 36,682 metric tons. In 2013, India imported just 15,919 metric tons of pepper, with production at 63,000 metric tons. This rose to 23,068 metric tons by 2014.

Farmers and trade associations report a steady decline in pepper production in India. Last season, production surpassed 70,000 metric tons, but this year's forecast predicts a 15-20 per cent drop.

In Wayanad, where production has been declining for years, farmers are particularly affected by the falling prices. The Pulpally-Mullankolly region, once known as Wayanad's 'pepper basket,' has seen production plummet over the past two decades.

Justus Thomas, a farmer from Perikkalloor near Pulpally, expressed his concerns: "The future of pepper here looks bleak. We no longer rely on pepper for our livelihood. My father harvested 100 quintals (10,000 kilograms) in the 1990s, but last year I only harvested 1 quintal, just 1 per cent of what my family once produced." He added, "Out of 100 plants we sow, fewer than 10 survive. We're willing to work hard, but the prices don't reflect the effort."

Supporting the farmers' concerns, data from the Directorate of Arecanut and Spices Development in Kozhikode indicates a significant decline in land used for pepper cultivation. The area under cultivation in Wayanad dropped from 20,955 hectares in 2005-2006 (with 13,897 tons of production) to 10,307 hectares in 2019-2020 (with 3,594 tons of production). According to the District Agriculture Office in Wayanad, pepper production in 2023-2024 was only 3,249.72 metric tons over 9,718 hectares.