Centre to restart advance licensing for pepper

The Centre will restart issuing advance licences to import black pepper shortly.

"After considering our problems positively, the Union government has decided to reintroduce advance licence scheme. It is only a matter of time," said a top official of an export oriented unit.

He said top officials in the commerce ministry and Directorate General of Foreign Trade (DGFT) had been convinced of the problem and have assured that the matter would be considered seriously.

The ban on advance licences has resulted in acute shortage of raw material and export-oriented units of oleoresin, pepper oil and other pepper-based products are on the verge of closure, sources said.

"At present, we have raw materials for use till month-end. After that, our units will have to be closed down. We had informed the matter in detail to the ministry of commerce," he said.

"We expect the government's decision within a couple of weeks. Incidentally, India is the largest exporter of oleoresins and oil, and enjoys a market share of around 95 per cent globally," he said.

Cancor, Plant Lipids, Synthite, AVT Natural Products and A K Flavours are the major players in the segment.

Meanwhile, the government is expected to announce an export incentive scheme for black pepper within a few days.

According to S Kannan, director (marketing), Spices Board, the commerce and finance ministries have agreed the scheme in principle. The Kerala government had procured black pepper at a price of Rs 75 per Kg when the market price was hovering around Rs 65.

The Kerala State Co-operative Marketing Federation (Marketfed), the nodal agency for procurement, had procured 4,800 tonne black pepper during March and April.

The government's plan was to export the commodity. But in the existing global market situation, the exports will only bring about huge loss to the government since the average global price is at Rs 55 per kg.

The Centre had taken the decision out of political pressure from Kerala chief minister Oommen Chandy.

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Imports to the rescue

• India is the largest exporter of oleoresins and oil, and enjoys a market share of around 95 per cent globally
• Therefore, the ban on advance licences has resulted in acute shortage of raw material and export-oriented units of oleoresin, pepper oil and other pepper-based products are on the verge of closure
• Many export-oriented units, at present, have raw materials for use till only the month-end