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The surge in pepper imports during the first half of the current year seems to have vindicated the stand of domestic growers, who had expressed intense concern over the alarming rise in the shipments of the spice into the country.
The available statistics reveal that imports during January-June touched 11,055 tonnes compared to 10,836 tonnes in the corresponding period of the previous year. Of this, 6,300 tonnes by extractors, 4,000 tonnes by EOUs for re-export with positive value-addition were permitted.
However, the import of pepper in general and for domestic use in particular at an MIP (minimum import price) of ₹500 per kg stood at 717 tonnes vis-a-vis 408 tonnes in the corresponding period of the previous year, said growers.
The pepper farming community, over a period of time, has been requesting the government to take effective steps to curb such shipments as this imported pepper was getting diverted to the domestic market, according to them.
Prices dip
Of late, pepper prices have started showing a declining trend since June 20, dropping by ₹15 per kg in the last fortnight, said Kishore Shamji, Coordinator, Indian Pepper and Spice Traders, Growers, Planters Consortium-Kerala Chapter.
The farming community is apprehensive as to why such imports are taking place despite MIP of ₹500/kg by paying 8 per cent import duty, 10 per cent social welfare cess and 5 per cent GST when the local price is prevailing at ₹300 a kg.
He alleged that there was a mismatch between the invoice at Customs and invoice at the buyers’ bank. There are even instances of leakage of Vietnam pepper into the domestic market for which the import duty is 50 per cent.
Unregistered traders
Geemon Korah, Director and CEO of Kochi-based Kancor, a natural ingredient manufacturer, has emphasised the need for import, add value and re-export all spices as India is the global spice processing hub.
“What is critical is to check the import of black pepper through unregistered traders and as direct import into India by non-advance license and EOU. Advance license users and EOUs are very well-tracked, export-import norms fixed and material balance checks done. There is no way this can be misused. This business is critical to ensure raw material availability from all countries and ensure the value add industry maintains its global leadership”, he told BusinessLine.
“If the farmers and the government fear imports are being leaked into the country and thereby affecting domestic prices, a very simple but mandatory rule is to permit only Spices Board registered traders and processors, to import pepper into India. This will ensure the complete traceability of each lot that comes in after proper testing at the Spices Board. It will also be simple to implement,” he adds.
Moreover, the Indian extraction industry imports only immature light berries, which fetch the farmers fewer returns. It is an advantage for farmers that the industry did not source this material in India. It is important, therefore, to continue importing this so that the farmers can harvest the mature berries and earn a higher income, he said.
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