Industry concerned over increase in cheaper Sri Lanka pepper imports

India's spice industry has raised concerns over increase in black pepper imports from Sri Lanka since August despite local prices in the neighbouring country falling below the minimum import price (MIP) fixed by the Indian government.
According to the Kerala chapter of the Indian Pepper and Spice Traders, Growers, Planters Consortium, large volumes of Sri Lankan pepper started arriving from August. This happened at a time when pepper prices in Sri Lanka crashed to $2,800 from $3,800 per tonne, while the MIP in India was $7,000 per tonne (Rs 500 per kg).

"Around 700 tonnes have moved from Sri Lanka to India at the MIP and more consignments will arrive in September, taking the total to more than 1,000 tonnes," said Kishor Shamji, coordinator of the Kerala chapter.

The consortium has written to Finance Minister Nirmala Sitharaman to probe the misuse of MIP to siphon off funds to the extent of over $4,000 per tonne, which could be a violation of the Foreign Exchange Management Act. Thus the purpose of the MIP imposed by India to protect the interests of pepper farmers is being defeated, said Shamji. In Sri Lanka, pepper prices are about Rs 200 per kg, which is much lower than the Rs 300-325 per kg rates seen in India. "The Indian customs authorities check whether the import invoice is at MIP. They do not have to look at the market value of the material in question, at the market value of the exporting countries or in Indian," said Shamji.