Rs 75 crore loss due to MIP on black pepper 

13 March, 2018

Black peppers exporters suffered  loss of Rs 75 crore in the last three months following the levy of minimum import price of Rs 500 per kg on black pepper from last December, the spice industry predicts around 50% drop in pepper exports from the country in the current fiscal if it is not withdrawn immediately. 

“Exporters with contracts to export pepper would have to default because they cannot import pepper at a high price of Rs 500 per kg as the global customers will not buy it at over 40% of the international prices,’’ forum chairman Prakash Namboodiri said. 
The All India Spices Exporters Forum said the MIP had a cascading effect on the other spices as value added pepper is mostly exported in combination with the other processed spices. Indian business has become unviable which could result in closure of business and loss of employment and forex earnings, it said. 

The forum has asked for exempting the value added exporters from the purview of the notification, restricting pepper imports through FTA and by unregistered traders and control smuggling of pepper from the neighbouring countries. 

As MIP has been made applicable to value added exporters in SEZs, EOUs and those operating under the advance licence agreement, India could lose its position as the global spices processing hub, it is pointed out. “ Already pepper exporters in Vietnam (the largest producer) are trying to source chillies from China to create a basket of spices for export,’’ he said. 

Though the MIP was imposed to protect domestic farmers, it has been counter-productive according to the exporters. The pepper prices after rising for a few days have dropped. “ The Indian pepper price fell from Rs 428 per kg at the time of MIP levy to Rs 390 at present,’’ Namboodiri said adding that pepper price is based on global demand and supply. Vietnam pepper which is usually imported for value addition has become cheaper during the time moving down from Rs 225 to Rs 210 per kg. 

“The pepper imported for value addition and export is tightly monitored by customs and hardly leaks into the domestic market and the government should clamp on the activities of unscrupulous traders who indulge in the activity,’’ said Philip Kuruvila former chairman of the forum. 

India exported 17600 tonnes of pepper last year . As per the indication given by the exporters it could fall below 10,000 tonnes if the MIP remains. 

Leave a Reply

Your email address will not be published. Required fields are marked *