Agri Business

Pepper growers want Sri Lankan free trade pact quota scrapped

GK Nair Kochi | Updated on February 19, 2018 Published on February 19, 2018

Minimum Import Price fails to curb inflow of cheap, inferior quality spice

The Consortium of Pepper Growers Organisation, Karnataka, Kerala and Tamil Nadu has urged the Centre to levy 54 per cent duty on imports from Sri Lanka under SAFTA and scrap the Indo-Sri Lankan Free Trade Agreement quantity of 2,500 tonnes.

To substantiate its demand, the Consortium pointed out “pepper production in Sri Lanka has increased substantially from the days of implementation of these trade agreements and other origin pepper is entering the country with Certificate of Origin issued by Sri Lankan authorities.”

Dumping of cheap pepper into the country inspite of the government fixing the minimum import price (MIP) is going on unabated and hence, the consortium has requested all Customs Commissioners to take stringent measures including with-holding of all clearances and re-inspection of all pepper imports post MIP.

MIP doesn’t help

“In fact, the very purpose of fixing MIP is to safeguard the interests of black pepper growers. As of now, we have to say that fixing of MIP has not come to the rescue of the farmers. It’s disappointing to see our own officers are defeating the system. Due to this in just one month (January 2018) our estimate is that the farmers have already lost ₹60-100 crore,” Konkodi Padmanabha, Convener, and KK Vishwanath, Co-Ordinator of the Consortium, told BusinessLine.

“We have also requested the DGFT to withhold all subsidies, duty refund, etc., of these importers,” they said.

“During January alone, 2,212 tonnes of pepper have been imported. It demonstrates that the entire efforts by the Indian pepper farmers consortium jointly undertaken by Karnataka, Tamil Nadu and Kerala have been watered down,” Kishor Shamji Kuruva, Head of the Consortium’s Kerala Chapter, said.

Port data

Data from various ports (Cochin Sea Port, Mundra Sea Port, Nava Sheva Sea Port, Chennai Sea Port and Bangalore ICD as well as Tughlakabad ICD) show a total of 2,212 tonnes of pepper have been imported in January.

This includes light pepper for oleoresin extraction and EOUs and units in the SEZ exempted from the ambit of MIP, while import from Sri Lanka for domestic market appears to have been totally sabotaged. The Customs have collected duty on MIP of ₹500/kg at 8 per cent which works to around ₹40-41 a kg. In many cases, the purchase prices are much lower than the MIP, sources said.

Going through the statistics of imports through Bangalore ICD, it appears import of pepper at Bangalore and Nava Sheva from Sri Lanka for domestic use have been charged duty at the MIP, while the prices in the import invoices are much below the MIP.

Furthermore, it is alleged widely that the present imports from and via Sri Lanka are suspected to be of Vietnam origin.

Quality checks bypassed

Therefore, one could easily arrive at the conjecture that the material imported at Bangalore ICD, as well as Chennai and Mundra, have not been tested for origin or presence of any pesticide residue.

Meanwhile, imports at Nava Sheva indicate shipping in of Brazilian pepper, nearly 100 tonnes, at higher duty of 70 per cent but MIP has not been followed since the value of Brazilian pepper appears in the statistics below ₹250/kg.

Internationally, it is feared Brazilian pepper has a contamination of salmonella bacteria requiring further sterilisation if it enters the domestic market.

Taking into consideration the quality and under voicing issues, the domestic industry is at stake when the pepper harvesting for 2018 crop is round the corner.

Published on February 19, 2018
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