Declining pepper prices in Sri Lanka may prompt importers to approach Director General of Foreign Trade (DGFT) to issue licences for their pending applications.

The domestic farming community pointed out that importers are awaiting DGFT to release the import licences for 2020-21 for the Indo-Sri Lankan FTA duty free with MIP (minimum import price) conditions. However, they added that the Prime Minister’s “vocal for local” call might have restrained the Commerce Ministry from issuing the licences for the current year.

According to Kishore Shamji of Kishor Spices, the Sri Lankan pepper prices have dropped from $4,000 to $3,000 per tonne with the beginning of the harvest season and today, the rates are reported to be even slightly below $3,000.

Last year, despite the MIP conditions, almost the entire quantity of 2,500 tonnes was imported with the involvement of hawala transactions, money laundering or even double invoicing, he alleged.

This anomalies for permitting import duty free under bilateral agreements have impacted the Indian pepper farmers interest badly. Therefore, the farming community is hoping that the government will take a favourable view for supporting local farmers, he added.

Meanwhile, the arrivals to Kochi on Monday was limited with 8 tonnes and the prices continue to be steady at ₹305 for ungarbled varieties. Though more arrivals are expected to the terminal market prior to school opening, it appears that farmers are unwilling to part with their produce/stock at the current price levels. Karnataka has reported higher prices than Kerala, while the Vietnam prices which was hovering at $2,000 has moved up to $2,300, he said.

He also cited the shifting of processing facilities out of Kochi to Tamil Nadu and other areas of Kerala due to low labour cost and the availability of ready-made infrastructure for manufacturing as a contributing factor for limited arrivals of pepper to the terminal market.

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