Minimum import price fails to save pepper

KOZHIKODE: The minimum import price (MIP) on pepper fixed by the Union commerce ministry as Rs 500 did not help price stabilisation. It is hovering around Rs 350, a steep fall from Rs 670 per kg in December 2016. It was Rs 375 in December last year.  Though the import from Sri Lanka under the Indo Sri Lanka Free Trade Agreement was restricted after imposing MIP, the Vietnam pepper is flooding the market through Nepal with reduced trade barriers, according to market sources.

Anil Kottaram, a trader in Wayanad, said Vietnam was on a selling spree as the actual production of the country was much more than the projected production which was around 1,75,000 tonnes. "The free import to Nepal through India is the major threat to the pepper price," he told DC.  "The pepper trucks to Nepal get diverted midway to the markets in Bihar and New Delhi, hitting at the price of domestic pepper. You can buy pepper for Rs 220, Free On Board (FOB) price in Dubai."

Meanwhile, farmers' organisations allege that soon after the Karnataka elections the NDA regime green signalled the import license for 78 pepper processing companies for value addition. These companies can import up to 30,000  tonnes annually. The duty on spices imported to India from Sri Lanka is only 8.5 percent while the same to Nepal is free under SAFTA (South Asian Free Trade Area) agreement.  Market experts expect a slight improvement only in August-September which would last for  a few days.