Import of pepper, earlier classified as 'free', is now 'prohibited'

But the import of pepper above Rs 500 per kg CIF will continue to be free

Nearly 3-4 months after announcing a minimum import price (MIP) for pepper, the government has now prohibited the import of the commodity below its CIF (cost, insurance, freight) value of Rs 500 per kg. The notification might stop the import of low-value pepper completely, said industry experts.
 
In an order issued in this regard, Director General of Foreign Trade (DGFT) Alok Vardhan Chaturvedi detailed the amendment to the import policy and policy condition for pepper.
 
Until now, the import had been free under the policy, but the amendment has now listed it under ‘prohibited’. However, the import of pepper above Rs 500 per kg CIF will continue to be free.
 
If MIP is less than Rs 500 a kg, import is prohibited. Earlier, this could have been adjusted by paying a fine.
 
Besides, imports under the advanced authorisation scheme is free and exempt from the MIP condition where import is for extraction of oleoresin or for re-export by the manufacturer-exporters only, subject to certain conditions.
 
Welcoming the government's decision, Konkodi Padmanabha, convenor, Consortium of Pepper Growers Organisation, said cheap-quality pepper, mainly from Vietnam, had been a major challenge to farmers, since it had brought down the price drastically from Rs 720 a kg over a year earlier to less than Rs 350 now.
 
He said while the domestic price of the pepper is around Rs 390 per kg today, imported domestic pepper is offered at even Rs 170 a kg. The cultivation cost comes to Rs 490-500 a kg, he noted.
 
“Imported pepper also has quality problems and it is not good for health,” he alleged.
 
Rohan Colaco, former executive committee member, KPA, added that if MIP was not met earlier, it could have been adjusted by paying a fine, now there are stringent import conditions; that is good for growers.
 
"Already, a lot of pepper has reportedly been imported. We have to wait and watch for the price direction in the next two months. I feel price will increase only after the Karnataka election. Right now, the price trend will be positive to slightly increased," he said.
 
The good income from pepper had cushioned the blow of low coffee prices. But with pepper prices crashing by 50 per cent, the future looked bleak, said a farmer from Kerala.
 
Industry experts also caution that low-value pepper might still find its way into the country using the provisions that allow the import of pepper below Rs 500 a kg for industrial purposes like preparation of oleoresin. The authorities should also be vigilant against any smuggling of low-value pepper from smaller countries, they said.
 
India’s domestic demand for pepper is increasing at around four per cent a year. Currently, the demand is estimated at 60,000 tonnes a year. So far, around 14,000 tonnes of pepper has been imported in 2017-18 and almost 50 per cent (7,000 tonnes) of that is from Vietnam, where pepper production in the coming season has been estimated at 170,000-190,000 tonnes. By comparison, India could produce 65,000-70,000 tonnes, according to market experts.