Exporters for restoring advance licence for pepper imports

Spices exporters have urged the ministry of commerce to reintroduce advance licensing for pepper imports.

They also sought the lifting of the ban on sale of pepper products in domestic tariff area by export-oriented units after they meet export obligations.

Oleoresin manufacturers have been sourcing pepper under advance license scheme for the past 20 years. The withdrawal of the facility would put this industry in a crisis, said Thomas Philip, chairman, All India Spices Exporters Forum Thursday.

India is the leading exporter of oleoresin and value added pepper products in the world.

Philip and Sanjay Mariwala, the forum's former president, have stated that there was no basis in reports that exporters are using imported pepper for trading in the domestic markets.

They said that the withdrawal of advance licences would destroy export-oriented units dealing in oleoresins and ground pepper.

They further said that an array of government agencies including Customs keep an eye on pepper imports.

"So it is not possible for an exporter to sell it in the domestic market. There may be a few incidents like that, but it is not the norm," they said.

The problem has come to the fore in the background of crashing domestic prices.

The fall in pepper prices have taken place in the backdrop of increasing world production, which has gone up from 254,000 tonne in 2000 to 340,000 tonne in 2004, and it is no way linked with pepper imports.

Also, Indian black pepper is less attractive to global buyers due to high prices and its resulting glut in the domestic market. This is the main reason for the recent fall in pepper prices. The unsold stock in the world market has grown from an estimated 58,000 tonne in 2000 to around 90,000 tonne in 2005, they explained.

While the export of black pepper is on a decline for the last three years, export of value-added products has increased gradually, they said.

They also said free imports allowed from Sri Lanka under the Indo-Sri Lanka Free Trade Agreement would also affect domestic prices.

Today, India alone accounts for 95 per cent of the world production of pepper oleoresin, with exports at 1,232 tonne which would have consumed 86,000 tonne of raw pepper.

India is also emerging as a major exporter of sterilised, milled, ground pepper with exports at 6,412 tonne in 2003-04. Philip further said that despite such good performance in terms of value addition, the Union government is unnecessarily penalising the exporting units.