An estimated 40,000 tonnes of pepper have landed in India through legal and illegal routes in 2017 and that, in turn, has hammered the prices of the indigenous produce by nearly 50 per cent forcing the Centre to fix a minimum import price of ₹500 a kg.
Indian imports normally hovered around 20,000 tonnes per annum in recent years, Spices Board sources said.
Imports of black pepper directly from Vietnam were at 16,281 tonnes during January-December 2017, while, according to trade, a total of around 36,000 tonnes arrived in India from Vietnam and Sri Lanka last year through legal and illegal routes.
In addition to direct imports from Vietnam, an estimated 3,000 tonnes of Vietnam pepper are believed to have arrived via Sri Lanka and this did not find a place in the official export figures of Sri Lanka. According to official sources, the island nation exported to India 13,500 tonnes of its pepper during January-October 2017. Besides, during November-December, it is estimated that 2,000 tonnes might have been shipped to India.
Even after imposing minimum import price, “it has been noticed that unscrupulous exporters from Sri Lanka as well as importers in India are continuing importing Sri Lankan pepper at ₹500 minimum import price and selling at ₹390/kg. However, upon media reports of such sales, they have changed modus operandi and are issuing bill for ₹500 for imported pepper and paying back to the buyer the difference amount in cash market,” said Kishor Shamji Kuruva, Kerala Chapter Head of Indian Pepper and Spice Traders, Farmers, Producers and Planters Consortium (IPSTFPC).
The Sri Lankan government, he said, has given additional facility to clear export consignments of pepper from Sri Lanka within 48 hours which used to be one week to 10 days minimum in the past. “Thus it is evident that Sri Lankan government is also hand in glove with its exporters to dump their excess at 8 per cent which fetches them $4,700-4,800.”
The other routes through which Vietnam pepper has landed in India are Papua New Guinea, Myanmar, Bangladesh and Nepal and estimated 4,000 tonnes have been smuggled into the country, he said.
As a result, the main consuming markets across the countryare dumped with cheap imported stuff and this phenomenon has pulled the pepper prices in the country to below ₹390 a kg, said Sunil Kumar, a farmer in Sakleshpur.
In fact, such a scenario was predicted by MS Swaminathan in his report way back in 2006.
“The actual threat faced by the domestic producers from cheap imports, originating in Vietnam, in particular, can be gauged by observing the tariff adjusted import parity prices. Import tariffs on pepper were bound at 100 per cent while the applied rate was 70 per cent,” Swaminathan says in his report.
Swaminathan has suggested a two-pronged strategy to protect Indian pepper farmers. The short-term strategy, he said, would entail imposing appropriate levels of tariff that effectively address the problem of cheap imports finding their way into India. In this regard, Vietnam poses the greatest threat since it has been found to be exporting pepper considerably below the international price. It is, therefore, imperative that adequate attention is given for protecting the interests of the pepper producers in India.
However, importers of pepper for value addition and re-export under advance license and duty free said the MIP which has been imposed in the name of protecting local farmer interests has practically resulted in a ban on the entry of pepper in all forms from outside. Consequently, “the exporters are in a deep crisis. They have requested the Centre to exempt the pepper Imported for re-export under the EOU, SEZ and Advance License Schemes, from the purview of the (MIP) notification,” Prakash Namboodiri, Chairman All India Spice Exporters Forum (AISEF) said.