Subsidy boosts black pepper exports by 54% in six months
It appears that the provision of freight subsidy on this year's black pepper exports from the country has paid off. Riding on a Rs 7 per tonne freight subsidy, black pepper exports from India increased 54% to 13,825 tonne on an year-on-year basis ...
By Ratna Ganguli, TNN |
KOLKATA: It appears that the provision of freight subsidy on this year's black pepper exports from the country has paid off. Riding on a Rs 7 per tonne freight subsidy, black pepper exports from India increased 54% to 13,825 tonne on an year-on-year basis during April-October this year.
In the absence of central sop, black pepper exports were lower at 8,971 tonne in the previous corresponding period. Shrinking supplies of black pepper from Vietnam have also contributed to the increase in Indian exports during the past 10 months.
Since the subsidy is available only till March, 2007, and up to an export limit of 20,000 tonne, it has unleashed competition among exporters to individually bag as many contracts as possible of the subsidy-backed quota. In November, they have clinched contracts for 6,500 tonne from the overseas market, delivery for which has to be made within next February. Indian exporters have clinched the contract in the range of $2,800-$2,700 per tonne.
At these rates, Indian FOB (free-on-board) price of black pepper was slightly higher than the fair average quality (FAQ) grade of pepper coming from Vietnam. But American and European importers did not mind paying higher prices for Indian pepper which is largely of the superior ASTA-grade pepper, industry sources said.
Given the export commitment up to February next year, subsidy-covered exports are expected to touch its limit by that month. Though there's been a time lag of 2-3 months in getting the subsidy from the date of filing application for it, it has helped the country increase black pepper exports this year, a Kochi-based exporter said.
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Industry sources said claims on subsidy worth Rs 4.95 crore have been placed before the Spices Board on exports of 7,071 tonne, which was shipped till September. Of this, subsidy to the tune of Rs 2.56 crore has been recently released against exports of 4,751 tonne. Till October, the Spices Board has received applications on subsidy reimbursement against a cumulative export of 11,045 tonne.Anticipating that the quota on subsidy-covered exports has already been met, exporters are going slow on making any further commitments. One of the reasons is also the lack of buying support from Western buyers. After having sufficient stocks to meet the Christmas demand, they are expected to be back in the market after January next year, sources said.
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