India likely to become a net importer of pepper

India is likely to become a net importer of pepper — the spice that lured Vasco Da Gama to the Malabar Coast — if the present neglect of the crop is allowed to continue, according to farmers/traders.

Black pepper prices have registered a sharp fall in the last seven weeks. The MG 1 price, which was at ₹50,400 a quintal on August 19, was at ₹44,600 on September 25, down by ₹5,800 a quintal and ₹58/kg.

“The decline could be attributed to availability of cheap imported pepper in the consuming markets as well as in the producing centres all over Kerala and Karnataka. Large imports of the spice are being carried out at Nava Sheva, Chennai and the Bangalore ICD,” Kishor Shamji, a veteran exporter/dealer, told BusinessLine.

The Centre he said, has fixed 70 per cent import duty on black pepper to protect the interest of domestic farmers. However, the Indo-Sri Lankan pact permits import of 2,500 tonnes of pepper from Sri Lanka without any duty.

The SAFTA agreement of SAARC countries permits pepper import from Sri Lanka at a concessional rate of 8 per cent only, under which any quantity of pepper can be imported, he said.

Taking advantage of this concession, many unscrupulous importers are indulging in importing Vietnamese pepper, for which import duty is 54 per cent under the ASEAN agreement, via Sri Lanka by just paying only 8 per cent duty.

Besides, to get a a Certificate of Origin from Sri Lankan authorities, they pay $1,000 a tonne to the Sri Lankan agency. This is a clear breach of trust between the two governments, he alleged. This phenomenon has led to the fall in domestic prices.

According to Sunil Kumar, a major grower from Sakhleshpur, Karnataka, if the pepper growers’ interests are not protected at this juncture there will be no other alternative except to switch over to other crops such as cocoa, nutmeg, fruits, etc. Such a scenario would steer the nation to become a net importer of pepper.

Panicky pepper farmers in Karnataka, Kerala, Tamil Nadu and Andhra Pradesh have made several representations to the Union Government, Commerce Ministry and the Spices Board and a response is still awaited, Chikamagaluru and Sakhleshpur-based farmers told BusinessLine.

Some oral instructions, they said, are understood to have been given to the Indian Customs not to permit any import of pepper from Sri Lanka below the minimum import price of $6,000 a tonne for the purpose of duty calculation.

Notwithstanding this, it is widely alleged that one can import pepper through the Chennai port and Tiruchi ICD by paying duty at lower purchase price. Thus, evasion of the import duty at the cost of growers, apart from inflicting a heavy loss to the Exchequer, is also taking place, they said.

The stakeholders strongly recommend that all the importers should mention in their sale bill the origin of the pepper sold in the domestic market.

It is also recommended that instead of the mandatory submission of a quarterly statement for imports and exports by importers and exporters to the Spices Board, it be made every month.

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