Traders Seek Cap On Pepper Import From Sri Lanka

Kochi, March 30: | Updated: Mar 31 2003, 05:30am hrs
The Centres recent decision to allow 100 per cent waiver of import duty on Sri Lankan pepper, which was 90 per cent till recently, has raised a hornets nest in the market with fears of easy flow of cheap varieties of pepper not just from Lanka but from several other countries with Sri Lanka playing the conduit. Traders said that this should hit the commoditys prices here as already the concession offered under FTA had made several countries route their exports via Sri Lanka.

The Spices Board, which anticipated such a move, had requested the Centre to impose a cap on the importable quantity from Sri Lanka. A board meeting on Friday took cognizance of the issue and had decided to request the Centre to impose the cap.

According to board chairman CJ Jose, the zero-import duty was not matter for concern. There has to be a cap on imports at 50 per cent of the total Lankan production and a 100 per cent duty on the remainder. In the case of tea, persistent pressure on the Centre resulted in imposition of a 15-million kg cap for import. According to the Saarc agreement, there was a 90 per cent duty exemption for trade among Saarc countries. The duty on pepper import was 70 per cent. As per the new order of March 18, there is a 100 per cent duty exemption on pepper import.

There is the threat that with the new order, the domestic market will be flooded with Sri Lankan pepper and other cheaper varieties from other countries, routed through the island nation. However, IPSTA president Jojan Malayil felt that these concerns are unfounded. With the prices ruling low, there was no chance of imports.

Indian pepper import has been on the increase. From 6,328 tonne in 2001-02 and 3,633 in 2000-01, imports since April 2002 till February this year have gone up to 15,108 tonne. The contribution of Sri Lanka and Vietnam was the highest. There has been a massive rise in imports from Sri Lanka alone giving rise to fears that things would be worse, hitting farmers and traders hard. Of the total 15,108 tonne of imports, over 14,450 tonne landed at Cochin port. Exports from Lanka showed a 154 per cent jump during last year. Pepper export was 3,161 tonne in 2001 and metrically rose to 8,000 tonne in 2002.

The sudden rise in production and exports there is a reason to believe that more pepper would come into India via Colombo, pepper traders assert. There was no way to ensure that the pepper imported from Sri Lanka for re-export did not get into the domestic market, they added, accusing the oleoresin industry for this.

Following the drought, pepper production in India was likely to go down by at least 25 per cent. A strong domestic market for the commodity and cheap imports from Sri Lanka would spell disaster for the sector, they said. To add to the problem, is the move for import of turmeric, dry ginger and nutmeg.