Indian pepper has suffered a sharp erosion in domestic prices as unrestricted dumping of Vietnamese pepper — via Nepal and Sri Lanka — has gained momentum in the last couple of years, planters said.

The Indian spice that commanded a price as high as ₹694 per kg in 2016-17 had been hovering in the ₹350-400 range in the last couple of years before it declined further to ₹322 at the start of November.

Karnataka Planters Association Chairman Shirish Vijayendra said: “In recent years, there has been a surge in Vietnam’s pepper exports to India via Nepal. Something that started with just 48 tonnes in 2015 has reached 5,930 tonnes in 2019, which clearly suggests the plausibility of routing pepper through Nepal.” Under the FTA, Sri Lanka can export up to 2,500 tonnes per year at zero duty, while the duty is 8% under the SAARC agreement and 50% under the ASEAN pact.

“Since most pepper-producing countries are in the ASEAN region, there is a possibility that pepper [from those] countries, including Vietnam, is routed through Sri Lanka and Nepal for availing of lower import duty,” said M.P. Cherian, VP, UPASI.

‘Rein in misuse’

Plantation body representatives urged the Centre take quick measures to curb misuse of imports.

“We also want the government to restrict pepper imports through designated ports, prohibiting EOUs and units in SEZs from selling black pepper in the domestic market; and fixing a higher minimum value-addition requirement for re-exports,” added Mr. Vijayendra.

According to pepper farmers in Karnataka, Kerala and Tamil Nadu, the harvesting cost of pepper will be 10% to 15% higher this year as most migrant workers are away due to the pandemic, and there would be a scramble for locally-available labour during the pepper-picking season.

India produces 61,000 tonnes of black pepper and Karnataka accounts for half of the production, followed by Kerala at 20,000 tonnes, as per the Spices Board of India.