Farmers hit by sharp decline in pepper prices

Cheaper imports from Vietnam via Sri Lanka, duty-free, blamed for distress

A drastic fall in the price of black pepper and low production owing to climate vagaries are the major concerns of farmers in Kerala and Karnataka, the two major pepper producing States in the country.

Black pepper prices have crashed from ₹760 a kg in 2017 to ₹490 a kg and then to ₹290 a kg.

The spot price of pepper in Kerala’s Wayanad and Karnataka’s Coorg markets on Wednesday was ₹285 a kg as against ₹390 a kg during the corresponding period last year.

The cheaper commodity from Vietnam continues to flood the market through Sri Lanka, aided by a low-duty structure under the ASEAN (Association of South-East Nations) trade agreement, SAFTA (South Asian Free Trade Area) and ISFTA (Indo-Sri Lanka Free Trade Agreement). Under SAFTA, India could import 2,500 tonnes of pepper a year from Sri Lanka without duty, and above the quota, a duty of 8% would be imposed as per the ISFTA, Mr. Abdu said.

However, direct pepper import from Vietnam attracts a duty of 52% under the ASEAN trade agreement.

Though the Union Ministry of Commerce and Industry had fixed the minimum import price (MIP) for pepper at ₹500 a kg in December 2017 to protect the pepper farmers in the country, it is now being widely flouted by some pepper importers with the support of unscrupulous Sri Lankan pepper exporters, violating RBI and FEMA regulations, said Kishore Shamji Kuruwa, the Cochin Chapter head of the Indian Pepper and Spice Traders, Farmers, Producers and Planters Consortium (IPSTPC).

While pepper prices in the Indian market are hovering around ₹290 a kg, Mr. Kuruva wondered why importers were procuring the produce at ₹500 a kg MIP plus 8% import duty from other countries. As many as 1,600 tonnes of pepper were imported by India in August and September this fiscal for domestic use.

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