Reiterating their demand for withdrawing MIP (minimum import price) notification on pepper imports, the spice export industry maintains that the continuing situation is going have a cascading impact on other spice exports from India.

According to Prakash Namboodiri, Chairman, All India Spices Exporters Forum, pepper is always exported in combination with other processed spices out of India and rarely in isolation. Customers will prefer to buy the entire basket of the spices comprising pepper, turmeric, paprika from a single source. “Already we have seen pepper exporters in Vietnam trying to source chillies from China to create a basket,” he said.

It is roughly estimated that the export industry has directly or indirectly lost business worth ₹50-75 crore in the last three months due to policy changes, forcing customers to move directly to the origin where it is available cheaper, he said.

The emerging situation has made the Indian spice industry uncompetitive in the international markets. “If we import pepper at a high price of ₹500/kg, our export obligation would neither be achievable nor will the global customers buy from India at over 40 per cent of the international market prices,” he said.

He cited the instance of the government banning export of CTC tea during 1977-78 that led to importers change their blends from Indian tea to East African and till this date, the loss has not been bridged.

It may be recalled that the Centre, as per DGFT notification, had fixed MIP on all forms of pepper at ₹500/kg ($7,875/tonne) when the global market prices are $3,500-3,600/tonne cif India. According to exporters, the government imposed MIP without any consultation under the guise of protecting local farmer interests, which had resulted in the ban on entry of pepper in all forms.

However, the exporters forum pointed out pepper price is based purely on global demand and supply. India this year is expected to produce close to 70,000 tonnes which will have an impact on prices, added to the bumper crop from Vietnam.

Quoting Spices Board figures, they said pepper imports last year was 23,500 tonnes valued at around ₹625 crore, besides smuggling of the commodity into India from Nepal, Bhutan, Bangladesh, and Pakistan across the border.

Seeking a congenial environment for doing business, the forum urged the government to exempt the pepper sourced from other origins for re-export under the EOU, SEZ and ALA from the purview of the notification as well as restrict any imports through the FTA and direct imports by unregistered traders.

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