Exporters call for lower minimum import price for pepper

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Kochi: India will soon lose its status as the world center for processed spices and spice products if the Union government does not remove the minimum import price (MIP) imposed on pepper in the country, according to the All India Spices Exporters Forum (AISEF). A notification issued by the Director General of Foreign Trade on December 6, 2017 stipulated a minimum of Rs 500 / kg for all pepper imported into the country dealt a severe blow to exporters of processors, said Prakash Namboodiri, chairman of the AISEF.

The processing and export of value-added pepper products have been affected by the decision and in the future the situation will worsen, he said. “The DGFT notification made the processing and export industry unable to compete internationally as the price of raw materials had become unaffordable,” he said. It is roughly estimated that the export industry has directly or indirectly lost business worth Rs 50-75 crore in the past 3 months, according to an AISEF statement.

According to the MIP, the cost of importing black pepper will be in the order of $ 7,875 per tonne compared to the world market price of $ 3,500 to $ 3,600, he added. The MIP is also against the Union government’s Make in India project, he said. The processor-exporter needed to obtain the raw material at a competitive price to be competitive in the international market, he stressed.

It is estimated that value-added products account for almost 60% of the country’s spice exports. “Spice exports increased to $ 2.6 billion in 2016-17 from levels of $ 500 million in 2010 and value-added products played a major role in the increase,” Namboodiri said. . The PIM is not conducive to sustaining such high growth, he added.

The MIP on importing pepper will have a cascading impact on other spices, as most international buyers look for a basket of spices for their needs, said Philip Kuruvila, Senior Advisor Sustainable Spices Initiative and Jojan Malayil CEO of Bafna Enterprises, an exporter of spices. He said. The MIP is unlikely to increase the income of local pepper producers, as falling demand from exporters keeps the market sluggish, they added. Calling the current downward trend in pepper prices as part of a five-year commodity cycle, the AISEF statement says that after five years of a bull market, five years of a bear market are seen over the course of the year. of the last five decades.


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