Indian producers smarting over rise in pepper imports from Sri Lanka

Monday, 20 July 2020 00:15 - - {{hitsCtrl.values.hits}}

(NIE) KOCHI: Imports of pepper from Sri Lanka for domestic use have shot up to 717 tons in the January to June period, of which nearly 50% or 372 tons came in the month of June. According to the data compiled by the Kerala chapter of the Indian Pepper and Spice Traders, Growers, Planters Consortium; in the first six months of 2019 (January-June), imports were 408 tons, which means this year there has been a significant growth of 56% in the same period.

The consortium said that ever since the bilateral agreement signed between India and Sri Lanka under the SAARC pact, pepper imports from Sri Lanka have been growing at a fast clip. Total imports of pepper under various heads including for domestic use shot up from 14,559 tons in 2014-15 to 27557 tons in 2018-19, a jump of 89.28%, said Indian Pepper and Spice Traders, Growers, Planters Consortium Kerala Coordinator Kishor Shamji, in a letter to Spices Board Secretary D. Sathiyan.

For the first six months of this calendar year, the total imports shot up from 10,836 tons to 11,055 tons. “The rising imports are also the major reason for the fall in domestic pepper prices from Rs 700/kg in 2013 to Rs 300/kg now,” Shamji told The New Indian Express.

To protect domestic pepper farmers, the general import duty for the commodity is fixed at a high 70%.

However, as per the agreement with Sri Lanka, the pepper coming from the island nation has a concessional duty of only 8%. Shamji said pepper from Vietnam is being routed through Sri Lanka to India to escape the high duty structure. Though a minimum import price of Rs. 500/kg is fixed to curb imports from Sri Lanka, Shamji said this has not curbed the dumping of pepper from the neighbouring country.

“The farming community is apprehensive as to why the imports are taking place at Rs. 500/kg minimum import price and paying 8% import duty as well as social welfare cess of 10% on import duty and 5% GST too,” said the letter to the Spices Board. “We suspect a gross violation of the FEMA (Foreign Exchange Management Act) by importers,” said Shamji.

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