Pepper import price: growers see no results, exporters want levy nixed

The pepper growers consortium has urged the Union Commerce Ministry to act claiming that the Minimum Import Price (MIP) for pepper imposed on December 6, 2017 has failed to achieve the desired results. In contrast, the All India Spices Exporters Forum (AISEF) has demanded the reversal of the MIP.

Pepper growers and traders are of the opinion that most of the re-export and value-addition units meet their raw material requirements with imported pepper, which is cheap.

Indigenous farmers are affected even as of growers in other origins gain as around 20,000 tonnes of pepper are imported annually.

This raw material is imported duty-free and re-exported after value-addition (minimum 15 per cent), the exporter gets an incentive of five per cent for each shipment. Besides, the importer is given 120 days for adding value and re-exporting which becomes advantageous for the unit, said Kishor Shamji, an exporter.

Nine out of 10 extraction units are concentrated in South India, mainly Kerala. This sector imports pepper from Sri Lanka, Indonesia and Vietnam as well as Brazil duty-free for oil extraction, grinding, sterilisation under advance licence.

The Consortium of Pepper Growers Organisation, which got the MIP of ₹500/kg imposed, in its memorandum on Monday to the Commerce Minister said, “In-spite of the best efforts by the Union Commerce Ministry still some more loose ends have to be tightened.”

KK Vishwanath, Co-Ordinator of the Consortium, said, “We have confirmed information of black pepper being imported under MIP at ₹500 from Sri Lanka and sold in the domestic market at ₹430. We have requested DRI and ED to look into this.”

To curb illegal imports, the Ministry must formulate a mechanism in arriving at the volumes which can be allowed to be imported from Sri Lanka.

Vietnamese pepper is available at $2,200/tonne as it is unable to ship it directly to EU markets because of high presence of chemical residues.

Hence, the pepper comes into India. Re-export of pesticide residue contaminated pepper, as a result of contaminated imports, will cause irremediable damage to the brand value of Indian Origin Pepper in the global market.

Meanwhile, spot prices fell further today by ₹300 a quintal to ₹42,100 (ungarbled) and ₹44,100 (garbled). Export prices were at $7,100 a tonne c&f for Europe and $7,350 for the US.