The Hindu Business Line : Little impact likely on Kerala move to procure pepper

THE Kerala Government's decision to procure pepper in a bid to help the growers is unlikely to yield the desired results unless its imports from Sri Lanka is curbed, according to trading sources here.

"We have a strong domestic market and as the internal prices remain at higher levels, imported pepper from Sri Lanka would flood the markets", Mr Kishor Shamji, President, India Pepper and Spice Trade Association (IPSTA) told Business Line. He said IPSTA appreciated the Government's decision but at the same time, there should be a foolproof mechanism to stop pepper imports.

The State Cabinet on Friday decided to procure pepper, coffee and arecanut from the growers. The procurement price and the agency, which would procure these, would be decided soon by a high level committee.

Production in Sri Lanka is in full swing now and it is estimated to produce 9,000 tonnes of pepper. Sri Lanka claims that its domestic market absorbs about 5,000 tonnes of pepper. But its exports often exceeded the exportable surplus. Pepper of other origin also enters the Indian market as the produce of Sri Lanka, traders allege.

According to them, the landed cost of Sri Lankan pepper at the current offered price is Rs 67 a kg c.i.f . Even interior places like Jalgaon, Gwalior, Pune, Nagpur, Jaipur, Indore etc get the imported pepper. The price of the domestic pepper including transportation cost and taxes is Rs72 a kg.

Mr Kishor Shamji urged the State Government to "try its level best to restrict the imports to 50 per cent of that country's exportable surplus for use by the oleoresin industry, besides reducing the purchase tax to 2 per cent from 4.6 per cent". In that case, he claimed, "genuine dealers doing interstate business can move out pepper from the State and compete with imported pepper".

Import of pepper has been rising substantially in recent years. Imports during January - June have gone up by 2,562.60 tonne to 7,749.97 tonne compared to the same period last year.

The exports have started showing a decline recent years. Export of pepper from the country, which stood at 21,203 tonne in 2002 fell to 14,088 tonne in 2003. As against the exports of 6,754 tonne in Jan - Jun 2004 the imports stood at 7,749.97 tonnes.

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