KOCHI: Pepper exporters, especially those who import the product and re-export after making value addition, are miffed at a recent notification by the Directorate General of Foreign Trade (DGFT). The notification, which All India Spice Exporters Forum (AISEF) termed as ‘unrea- sonable’, has fixed minimum import price (MIP) of pepper at Rs 500 per kg.
“This notification is going to have a heavy damage on pepper products export. Anyone procuring pepper at the global market price will face penalty of 70 per cent duty on differential price and surcharge. It may be noted that the MIP at global level stands at Rs 220 per kg,” said Prakash Namboodiri, chairman, All India Spice Exporters Forum.
“The notification will practically ban the entry of pepper in all forms from outside. Some of the 100 per cent EOU (export oriented units) and advance licence holders whose shipment has hit the Indian shores in the past two weeks have been slapped with notices of the penalty of Rs 250,000- 270,000 for not providing Rs 500 as per the new notification. The government has not even exempted 100 per cent EOUs in SEZ’s, other EOUs and companies working under advance licences within the purview of the notification,’’
Namboodiri noted.
He cautioned that products from EOUs may not find their way to global market if the notification is enforced. According to him, the move may not help farmers because pepper imported by EOUs is exported 100 per cent and not entering the local market. “Hence, there is no issue of import affecting the price of pepper in the domestic market,” he added.
Explaining the reason why pepper prices in India are staying high, Namboodiri noted that production in India is only 400 kg per acre while in other producing countries it is more than 2 mt per acre. Also, Indian consumption is 60,000 mt per annum compared with 5,000-8,000 per annum in other producing countries.
“Companies should be allowed to import, do value additions and re-export the goods at the prevailing market prices; which earn foreign currency and create jobs for the country,” he added.
Meanwhile, Spices Board chairman A Jayathilak clarified that DGFT notification was on the basis of a proposal by the Spices Board. Actually, the issue of poor quality was brought to the notice of the Board by exporters themselves. The restriction in MIP of pepper was introduced in an effort to ensure quality. Globally, the pepper price came down because of low quality. The Spices Board wants quality pepper to be exported for which we have to ensure quality of pepper imported,” Jayathilak added.