Kerala: Exporters call to roll back minimum import price on pepper

Kochi: India will lose its status as the global centre of processed spice and spice products soon if the Union Government fails to withdraw the minimum import price (MIP) imposed on pepper to the country, says All India Spices Exporters Forum (AISEF). A notification issued by Director General of Foreign Trade on December 6, 2017 has stipulated a minimum of Rs 500/kg for all pepper imported to the country has dealt a severe blow to the processor exporters, said Prakash Namboodiri, chairman AISEF.

The processing and export of value-added pepper products have been hit by the decision and going forward, the situation will worsen, he said. “The DGFT notification has made the processing and exporting industry unable to compete internationally as the raw material price had become unaffordable”, he said. It is roughly estimated that the export industry has directly or indirectly lost business worth Rs 50-75 crore in the last 3 months itself, AISEF statement said.

As per the MIP the cost of importing black pepper will be in the range of $ 7,875 per tonne as against the global market price of $3,500-3,600, he added. The MIP is also against the Make in India project of the Union Government, he said. The processor-exporter needed to get the raw material at a competitive rate to compete in the international market, he pointed out. 

According to the estimates, value-added products account for nearly 60 percent of the spice exports from the country. “The spice export has gone up to $ 2.6 billion in 2016-17 from the levels of $ 500 million in 2010 and value added products played a major role in the increase”, Namboodiri said.  The MIP is not conducive to sustain such a high growth, he added.   

 The MIP on pepper import will have a cascading impact on other spices as most international buyers look for a basket of spices for their requirement, said Philip Kuruvila, Senior Advisor Sustainable Spices Initiative and Jojan Malayil CEO of Bafna Enterprises, a spices exporter. He said. The MIP is unlikely to boost the income of local pepper farmers as the fall in demand from the exporters keep the market subdued, they added. Terming that the present downtrend in pepper prices as part of a five-year commodity cycle, the AISEF statement said after five years of bull market,  five years of bear market is observed for the past five decades.