Heavy arrivals of imported pepper from Sri Lanka have capped the domestic pepper price in India, says the Indian Pepper and Spices Traders, Growers and Planters’ Consortium.

Pepper prices touched a record high of ₹532 per kg earlier this month, before declining on heavy arrival of imported Sri Lankan pepper. Traders pointed out that increased availability of imported pepper in many consuming markets has led to a drop in domestic prices, which closed at ₹515 in Kochi on Tuesday.

The pepper shipments came at minimum import price of ₹500 per kg with 8 per cent import duty under SAFTA and 2 per cent Social Welfare Cess and ₹10 expenditure with import cost working out to ₹560 per kg.

According to the consortium Kerala coordinator Kishor Shamji, the import of black pepper for domestic use under South Asian Free Trade Agreement (SAFTA) for November 2021 registered a record high of 1,814 tonnes (including 39 tonnes without duty under Indo-Sri Lanka Free Trade Agreement (ISFTA)). A year ago, it was 454 tonnes while in November 2019 it stood at 230 tonnes. This is a record high in the last three years, he said.

The total import of black pepper from Sri Lanka during January-November 2021 was 8,961 tonnes - more than double from 4,017 tonnes from a year ago. During the same period in 2019, it was 3,144 tonnes.

Mumbai Nava Sheva had the highest quantity of 946 tonnes followed by KLPPL Panki, Kanpur at 313 tonnes. Chennai registered an import quantity of 264 tonnes while Mundra port received 179 tonnes.

Shamji alleged mostly hawala and money laundering could be involved or importer not remitting the actual over invoiced price which is only meant for Customs clearance and payment of duty to Customs at ₹500 per kg basis since normal duty for domestic use is 70 per cent and under ASEAN it is 50 per cent.

He also alleged that if the importers do not remit the invoiced value declared in the Bill of Entry it becomes a high violation of FEMA rules.

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