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Indian pepper farmers benifits Snatched Away By Importers and Exporters

The consortium of pepper growers in Kerala and Karnataka demand again restrictions on pepper imports.

Import from other countries doubled to 1,000 tonnes in September from the previous month.

The Kerala chapter of Indian Pepper and Spice Traders, Growers, Planters Consortium said that shipments are mostly Vietnam pepper coming from Sri Lanka after fake value addition. The imports are happening uninterruptedly despite the MIP levy of ₹500/kg and is affecting domestic growers, said Kishor Shamji, coordinator of the consortium.

He pointed out that such imports had crossed 1,500 tonnes in October and it is likely to cross 2,500 tonnes soon.

Domestic production is likely to drop below 50,000 tonnes against a consumption of 65,000 tonnes.

“This mismatch has been taken advantage by the Sri Lankan exporters by importing Vietnam pepper with certificate of origin from Sri Lanka, thus snatching away the benefit of Indian pepper farmers”

Several Indian importers are violating the FEMA rules by producing wrong purchase invoices to overcome MIP restrictions.

The Karnataka based Consortium of Black Pepper Growers said that many firms are resorting to over invoicing. There are at least three organisations which have imported nearly 60 per cent of the total quantity of imports by paying higher than MIP, Vishwanath KK, coordinator of the consortium said.

The rising imports had taken its toll on the average pepper price, which dropped from a high of ₹720/kg to ₹350 over the last 18 months.

In a memorandum to the Commerce Minister, both the growers’ organisations suggested a staggered levy of duty.

At present, import duty on pepper from Sri Lanka under the South Asian Free Trade Agreement (SAFTA) is 8 per cent; nil duty under Indo Sri Lankan free trade agreement (ISFTA); and 52 per cent on stocks from Association of South East Asian Nations.

India is allowed to import 2,500 tonnes under ISFTA without duty. The first 2,500 tonnes from Sri Lanka could be duty free and 8 per cent levied on the next 2,500 tonnes. Anything above this should be charged at 52 per cent, the coordinators of the consortium said. They also urged that imports could be channelled through Kochi and Mumbai ports. In addition, to certificate of origin, the shipping bills need to be endorsed by Sri Lankan customs to stop exporters switching Vietnamese containers, they said.

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