Lok Sabha Question No. 1955 (UNSTARRED), answered on 2019-07-03
Subject: Import and Production of Pepper
Ministry: COMMERCE AND INDUSTRY
Asked by: Shobha Karandlaje

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

(DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 1955 TO BE ANSWERED ON 3 rd JULY, 2019

## IMPORT AND PRODUCTION OF PEPPER

## 1955. KUMARI SHOBHA KARANDLAJE:

Will the Minister of COMMERCE & INDUSTRY ( वा�ण�य एवं उ�योग मं�ी ) be pleased to state:

- (a) whether  the  Government  had  imposed  a  Minimum  Import  Price  (MIP)  on  Pepper  to  protect domestic pepper growers:
- (b) if so, whether it has made any positive impact on domestic pepper growers and if so, the details thereof;
- (c) whether rising imports and illegal entry of pepper had taken its toll on the average pepper price in India and if so, the details thereof;
- (d) whether  domestic  production  is  likely  to  drop  below  50,000  tonnes  against  a  consumption  of 65,000 tonnes during the year 2018-19 and if so, the details thereof;
- (e) whether the Government proposes to remove black pepper from the South Asian Free Trade Area (SAFTA) and India Sri Lanka Free Trade Agreement (ISFTA) import lists in order to aid domestic growers, if so, the details thereof and if not, the reasons therefor ; and
- (f) the steps being taken to stop cheaper imports from Bangladesh, Bhutan, Nepal, Sri Lanka and Vietnam  and  the  corrective  measures  taken  to  protect  the  interests  of  pepper  growers  in  the country?

ANSWER okf.kT; ,oa m|ksx ea=h ( Jh ih;w'k xks;y ) THE MINISTER OF  COMMERCE AND INDUSTRY (SHRI PIYUSH GOYAL)

(a) & (b): In order to reduce the import of pepper and to stabilize the domestic price of pepper, Government had fixed the CIF value of Rs.500/- per kg. as the Minimum Import Price for Black Pepper vide Notification of Directorate General  of  Foreign Trade  (DGFT)  dated  6/12/2017. Subsequently,  an  amendment  was  brought  in  the  Minimum Import Price (MIP) notification by  making import of  pepper at or above Rs.500/- per kg. free and import below Rs.500/- per kg prohibited vide DGFT Notification dated 21/3/2018.

The details of import of pepper into India during the last three years and the current year are given below;

| Year           |   Quantity (MT) |   Value (Rs.Lakhs) |
|----------------|-----------------|--------------------|
| 2015-16        |           19365 |             116296 |
| 2016-17        |           20265 |             111590 |
| 2017-18        |           29650 |             109084 |
| 2018-19 (Est.) |           24950 |              77991 |

(Est: Estimate.    Source: DGCI&S Kolkata/DLI from Customs

Imposing of Minimum Import Price for black pepper has helped to arrest steep fall of pepper prices and reduce imports. The estimated import of pepper into India in the year 2018-19 was 24950 Metric Tons as compared to 29650 Metric Tons in the year 2017-18, registering a decline of 15.9%.

- (c) Rising imports coupled with increased global production of pepper   have resulted in fall in the price of pepper in the domestic market. The price of black pepper has been showing declining trend since the year 2017-18. The average price of black pepper during 2016 -17 in domestic market was Rs. 694.77 per kg, which has declined to Rs.378.21 per kg during 2018-19.

The average domestic price of pepper during the last 4 years is given below:

| Year    |   Average domestic price of pepper (MG1) at Cochin (Rs/Kg) |
|---------|------------------------------------------------------------|
| 2015-16 |                                                     655.22 |
| 2016-17 |                                                     694.77 |
| 2017-18 |                                                     473.73 |
| 2018-19 |                                                     378.21 |

Source: Indian Pepper and Spice Trade Association, Cochin

- (d) The domestic production of pepper during 2018-19 is estimated to be less i.e.  62144 tons  compared to the pepper  production of  70878 tons during the year 2017-18  as all districts of Kerala and five districts of  Karnataka were affected by heavy rain, flood and landslide, which damaged plantations   resulting in low production during 2018-19.  The details of annual consumption and production of pepper in the country during the last three years and the current year are given below;

| Year        |   Production (MT) |   Domestic Consumption (MT) |
|-------------|-------------------|-----------------------------|
| 2015-16     |             73555 |                       50000 |
| 2016-17     |             62080 |                       55000 |
| 2017-18     |             70878 |                       58000 |
| 2018-19 (*) |             62144 |                       58000 |

(*) Projection

Source : Production : Directorate of Arecanut  and Spices Development,    Calicut, Kerala. Consumption: International Pepper Community, IPC, Jakarta

- (e)   India enjoys trade surplus in SAARC region. Any decision to review or otherwise the terms of SAFTA and ISFTA is dependent upon the bilateral views of the parties to these agreements . No decision has been taken on the issue of review of SAFTA and ISFTA as yet.
- (f)     India is not importing pepper from Bangladesh, Bhutan  &  Nepal. The various steps taken up by the Government to curb import of pepper from Sri Lanka and Vietnam include, inter-alia, the following:
1. The Union Government Vide Directorate General of Foreign Trade (DGFT) Notification dated 6/12/2017 fixed Rs.500/- per kg as  the Minimum Import Price for black pepper.
2. Subsequently, an amendment was brought in the Minimum Import Price (MIP) notification by making import of pepper at or  above Rs.500/- per kilogram free and import below Rs.500/ per kg prohibited vide DGFT Notification dated 21/3/2018.
3. To prevent improper import of  pepper from  other  countries taking advantage of preferential access under the  India-Sri  Lanka  Free  Trade  Agreement  (ISLFTA)  and Agreement  on  South Asian  Free  Trade Area (SAFTA),  Sri  Lankan Authorities  were  requested  to  exercise  extreme  care  and  diligence in  issuing  the Certificate  of  Origin.  On  our  request,  SriLanka  has  introduced  a  new  procedure  to  prevent  misuse  of Certificates  of  Origin  for  third-country  black  pepper  shipments  destined  to  India.  While  issuing  such Certificates of Origins, relevant authorities in Sri Lanka are also cross verifying information on exports of pepper obtained from different sources in Sri Lanka, to ascertain the genuineness of exports. Sri Lanka has also put in place a mechanism under which access has been given to Indian authorities to examine the scanned copies of Certificates of Origin issued for black pepper exports under ISFLTA and SAFTA .
4. Sri Lanka has temporarily suspended import of spices including pepper and areca nuts through the Entreport Trade and Commercial Hub Operations to prevent these spices being re-shipped from Sri Lanka to India as Sri Lankan products.
5. Sri Lanka has also agreed to facilitate the visit of a technical team to examine the existing procedures in Sri Lanka  for  issuing  Certificate  of  Origin  and  the  new  mechanism  set  up  by  Sri  Lanka  for  verification  of authenticity  of  certificates  issued  for  black  pepper  shipments  exported  by  Sri  Lanka  under  ISFTA  and SAFTA.
6. Instruction has been issued to authorized officers of Food Safety and Standards Authority of India (FSSAI) and  field  formations  of  Customs  to  be  vigilant  at  the  point  of  entry  in  the  ports  in  order  to  address  the possibility of entry of inferior quality pepper from various countries.

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