George Joseph / Kochi December 16, 2009
High prices, rising consumption in the country give Vietnam the edge.

India is losing out to Vietnam in black pepper exports. According to the Vietnam Pepper Association (VPA), the country exported 7.5 times more than India this year. It exported 128,000 tonnes during January-November compared with 17,150 tonnes exported by India.

Vietnam’s exports during the period increased 43 per cent while that of India dipped 23 per cent. The main reason for this sharp fall in exports is the high prices offered by India in the past two-three years. It is losing its traditional markets like the US and the Europe because of this. The Indian MG-1 grade is quoted at $250 a tonne higher than in other international markets.

Exports by Vietnam to US and Europe increased substantially this year whereas India continued the downward trend. Earlier, global economic turmoil had been attributed for the setback in exports, but Vietnam’s commendable performance rules out this theory.

Rising domestic consumption is the main reason for the high prices in India. The average annual domestic consumption is around 40,000 tonnes against an average annual production of 55,000 tonnes. Vietnam which has the highest global output of 120,000 tonnes is consuming only 3,500 tonnes annually. It is interesting to note that Vietnam imported 10,000 tonnes of pepper for re-export this year mainly from Brazil, Cambodia and India.

Meanwhile, production in Vietnam for the next season, which begins by February is projected at 110,000 tonnes, lower by 8-9 per cent compared with the last season. According to VPA crop of around 1,000 hectares had been damaged due to typhoon Ketsana.

Initial estimates indicate that India will have marginally higher production this time at around 55,000 tonnes

From The Business Standard...