Financial Daily from THE HINDU group of publications
Saturday, Nov 30, 2002
Agri-Biz & Commodities
Spices & Condiments
Spices Board steps in to check cardamom, pepper imports
KOCHI, Nov. 29
CALL it by any name grower-friendly measure or a non-tariff barrier. But the fact is the Government has embarked on a move to check sharp fall in the prices of spices due to rising imports.
Through the Spices Board, the Government has introduced a mechanism under which imported consignments will not be released by the Customs if the invoices are suspected to be undervalued.
The board has begun sending the weekly average auction prices of cardamom and the average prices of pepper put out by the Indian Pepper and Spices Trading Association (IPSTA) to the Customs authorities to assess the value of the spices that are being imported.
The decision to check imports this way has been taken following reports of large-scale imports of pepper and cardamom. This had led to sharp fall in the domestic prices of these commodities.
Denying that the spices imports have had any impact, Mr K. Kannan, Director, Marketing, Spices Board told Business Line that so far, only 150 tonnes of cardamom had been imported. Of this 86 tonnes have been detained by the Customs authorities as the consignments have been found to be undervalued.
If the landing price of the imported spices is found to be lower than the reference price sent by the board, the consignment is not released, according to Mr Kannan.
The Customs authorities have the freedom to assess the value and ``they need not have to go by the invoice price'', he said. ``What we want is that the landed cost of imported pepper and cardamom should be at par with the domestic price,'' he said.
The Customs authorities will henceforth assess the value of imported pepper and cardamom on the basis of the domestic prices, provided by the board. ``Such a decision has been taken as a precautionary measure and so far it has been successful to arrest the arrival of these products in the domestic market,'' Mr Kannan said.
Pepper imports are generally done by the oleoresin industry, Ayurvedic and Siddha drug manufacturers and spices processing and exporting establishments for value-addition and re-export.
Till date, the board has not received any report of the imported pepper being diverted to the domestic market.
The measures have not been challenged by the importers either, though some have expressed their displeasure to the board officials over telephone.
Pepper market sources said during April-October 2002, about 12,625.49 tonnes of pepper were imported into the country by extractors and re-exporters and re-sellers. Of this 5,854.22 tonnes was by the oleoresin industry, while 6,771.27 tonnes by re-exporters.
Due to anomalies in the Exim policy, there is every possibility that some of the imported pepper has entered the domestic market, they allege.
The oleoresin industry imports light pepper and hence there is no threat from that sector. The units importing pepper for grinding and crushing and for producing masala mix etc. are also unlikely to sell the pepper in the domestic market. But units which import for ``simple value-addition, could exploit the loopholes and anomalies in the import-export policy,'' the sources fear.
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