During 1998-99, pepper export was 35,100 tonnes valued at Rs 635 crore compared to the previous year when the exports stood at 36,719 MT at Rs 487 crore. Even though there was a decrease of 2 per cent in quantity, the value of exports were 30 per cent higher, due to high unit value realisation.

Consistent uptrend in the prices of pepper in the last six to seven years have proved to be a bonanza for the pepper growers. Black pepper is currently being referred to as the `black gold' in the market as can be seen from the fact that from a price of Rs 29 per kg in 1992-93 and Rs 41 per kg in the year 1993-94, the price has shot up to a whopping Rs 200 per kg during 1999. The production of pepper during 1998-99 stood at 70,000 MT.

Even on taking an average annual production of60,000 MT of pepper and with a modest estimate at the rate of Rs 150 per kg means that pepper sector has received Rs 3,600 crore in the last four years.

However, with new emerging pepper markets such as Vietnam, China and others, India needs to adopt a cautious approach in order to sustain its commanding share in the international market.

A recent study on the market potential of black and white pepper, recommended that in order to sustain the country's position in the global market vis-a-vis the increasing competition, the central and state agricultural ministries should evolve specific long-term export-oriented production plans, with sufficient outlays. The study conducted by OTS Nambiar of the Spices Board along with RK Menon of Tata Tea Ltd, was presented before the pepper industry during the recent spices workshop held in Kochi. This step is a must, as it is increasingly being felt that pepper had not been getting adequate attention from the state governments.

Besides evolving long-term exportplans, it is also suggested that special care must be taken to ensure uninterrupted pepper supply to the importing countries. This would help to prevent the buyer from seeking this commodity from other new emerging players.

It has been pointed out in the study that unlike other countries where there is no domestic market force, in India exportable surplus is affected due to domestic market pressures. Recent de-railing of pepper exports in December 1998 to March 1999, where interruption in arrivals dislocated and reduced the exports of pepper from India, reflected a dicey situation.

"We can get high price as per supply demand forces, but at no point of time, supply should be blocked as this will affect our credibility and the country will loose its commanding position as a credible supply source in the global pepper trade, driving our local buyers towards other pepper producing countries," says the study. Therefore a focussed approach should be adopted to ensure uninterrupted supplies at prevailing prices,apart from ensuring quality at all levels, from picking to exporting. The study also suggests that the production of pepper should be increased in the country through modernisation, disease management and large scale organised farming, with sharp focus on value addition.

As per the study, India was one of the major players in the international pepper trade and were the price settlers. However, with the emergence of more and more new comers in this scene, the market has become hectic and the price has also started fluctuating. The international price has been on the steady increase from 0.73 cents in 1993-94 to $2.50 in 1998-99. The current ruling price of pepper in the international market is $2.50 per kg compared to Rs 200 per kg in the domestic market. The prices even touched Rs 220 a kg during 1998-99.

According to the study, the short run prospects for pepper were quite colourful and bright with the prevailing high prices which are expected to continue for some more time. The industry cannot afford tobe complacent, as in the long run, things may not be that rosy, adds the study. By the year 2001, due to extensive and modernised production measures adopted by major pepper producing countries, supply position may register steep increase without corresponding growth in demand, which may pull down prices of pepper.

Moreover, emerging strong players like Vietnam and China have their inherent advantages as being new entrants they have virgin land which is more fertile and productive with less chances of diseases. Also the fact that these countries have monocrop and organised large scale farming, these factors would lead to higher productivity.

It is worthwhile to note that in seven months from January 1999 to July 1999, Vietnam has exported 27,600 tonnes, up 300 per cent from the same period in 1998. In value terms, Vietnam earned an estimated $108 millions from pepper exports in January-July period as against $39.6 millions in the same period last year.

Vietnam production has increased from 6,100 MT in1988 to 25,000 MT during 1997. Their domestic consumption is estimated to be a mere 1,500 MT annually and the remaining quantity of around 23,500 MT is available as export surplus.

Therefore in order to sustain its leadership in pepper, India must concentrate on new modern ways of increasing productivity with a sharp focus on quality.