The imposition of Minimum Import Price on black pepper have put growers and spice exporters at loggerheads, trading charges on price decline and over invoicing of imports.

Last week growers in Karnataka staged a protest before a spice exporting company in Bengaluru, alleging over invoicing of imports.

Over priced

The uncontrolled fall in domestic prices from ₹550/kg to ₹330 in a year, happened after the MIP was notified at ₹500/kg, Vishwanath K K, Coordinator, Consortium of Black Pepper Growers Organisation said. He alleged that importers are using loopholes in the notification and importing pepper through land borders and seaports by over invoicing after displaying import price close to ₹500/kg. The current price in Vietnam is around ₹190/kg and the only way for traders to import is by over invoicing, he felt.

Paper trail ok

However, the Kochi Customs Commissioner, Sumit Kumar said that the import documents like Bill of Entry, Country of Origin Certificate submitted by spice exporters are in order. “There is no proof that pepper imports have been over invoiced”, he told Business Line. The Commissioner also pointed out that pepper imports by EOUs in Kochi has come down in the last one month due to MIP notification. On the charges of Vietnam pepper being diverted through Sri Lanka, he said “it is difficult to differentiate the country of origin by looking into the commodity”.

According to Vishwanath, Indian black pepper is most sought after in the world market and the best quality is fetches only ₹330-340/kg, forcing farmers to hold huge volume of unsold stock. Growers are ready to offer quality pepper at the rate of ₹500/kg. “What is forcing these traders to import at a high price? he wondered.

Cheap imports

Agreeing that cheap imported pepper was available in the North Indian market smuggled through Nepal and Myanmar, Prakash Namboodiri, Chairman of All India Spices Exporters Forum called for efforts to plug the loopholes. Production has far exceeded demand and the prices drop further as Vietnam is likely to reap a bigger harvest, he said.

Quoting American Spice Trade Association Convention and European Spice Association Conference, he said India's production may rise to 92,000 tonnes in 2018-19 crop season. For the present, genuine exporters who import solely for re-exports may be pushed to the brink. Indian pepper exports was less than 10,000 tonnes per year over the last five years, while global consumption was 450,000 tonnes.

The average global consumer is used to Vietnam pepper. Exporters facilitate value addition through processing and packaging black pepper of all origins for global customers as per their requirement, Namboodiri said.

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