A sharp fall in the price of black pepper, coupled with low production of the spice, has put farmers in Kerala, Tamil Nadu and Karnataka the three major pepper producing States in the country in a problem .
Black pepper prices crashed from ₹760 a kg in 2017 to ₹600 a kg and then to ₹500 a kg.
The spot price of pepper in Wayanad, a major pepper-producing region in Kerala, on Tuesday, was ₹300-₹310 as against ₹500 during the corresponding period last year, said M.C. Abdu of Ideal Spices, a pepper dealer in Wayanad.
The influx of imported pepper from Vietnam via Sri Lanka was the major reason for the fall in prices in the Indian market.
The cheaper pepper from Vietnam continues to flood the market through Sri Lanka, aided by a low-duty structure under South Asian Free Trade Area (SAFTA) pact and Indo-Sri Lanka Free Trade Agreement (ISFTA).
Under ISFTA, India could import 2,500 tonnes of pepper a year from Sri Lanka without duty, and above the quota, a duty of 8% would be imposed as per the SAFTA. But direct pepper imports from Vietnam attract a duty of 52% under the ASEAN trade agreement.
According to data with the Spices Board, the total production of pepper in the country during the last fiscal was about 55,000 tonnes, including 20,000 tonnes from Kerala, 10,000 tonnes from Tamil Nadu, and the remaining from Karnataka.
