Lankan spice exporters request India to remove MIP on pepper

Sri Lanka’s spice producers are requesting the Indian authorities to remove the minimum import price (MIP) on imported black pepper to India as Sri Lanka’s pepper exports to India have come into a halt, impacting the pepper prices in Sri Lanka adversely.

“Although the pepper production of the country has declined, our prices did not increase as they would have happened under the normal circumstances. 

In fact, the prices have actually come down to Rs.400-450 this year. This is a result of the unrealistic floor price imposed by the Indian authorities for pepper imports, at Indian Rs.500 per kg, which is roughly equivalent to Rs.1240,” Spices and Allied Products Producers’ and Traders’ Association Immediate Past Chairman Prins Gunasekera said.

He lamented that pepper exports to India have stopped due to the unrealistic price floor, which is a non-tariff barrier to trade. 

Sri Lankan pepper was allowed to be exported to India at zero duty for up to 2,500 tonnes, under the Indo-Sri Lanka Free Trade Agreement.

India imposed price controls as the Indian pepper producers claimed that cheap pepper imports from Vietnam are flowing into India through Sri Lanka. 

Primary Industries Minister Daya Gamage recently alleged that a pepper re-export racket from Vietnam had the backings of certain politicians. 

Considering the concerns of the local pepper producers, the government earlier this year imposed restrictions on pepper imports from Vietnam to curb the re-export racket.
“We hope this problem will be resolved soon, as we have already made representation to the Indian authorities,” Gunasekera said. 

Sri Lanka’s pepper prices have declined by over 29 percent year-on-year to Rs.585.84 in 2018, while pepper production declined by over 9,000 tonnes in the year. (NF)