Financial Times

Drought affects pepper exports
By Iromi Perera
Pepper exports to India have fallen in recent years due to drought and other production factors. In 2002 Sri Lanka exported 5905 tonnes of pepper to India but in 2003 the amount declined to 5838 tonnes, despite zero tariff being introduced on spices on March 18, 2003. This year too pepper production has declined owing to the drought and bad weather conditions prevailing and therefore, only 1800 tonnes have been exported to India from January to June.

Pepper exporters also dismissed fears expressed by Indian producers that cheap imports of Sri Lankan pepper was affecting their market. Several associations including the All India Spice Exporters' Forum and the India Pepper and Spice Trade Association have demanded the government of India fix a cap or impose duty on pepper imports from Sri Lanka. These associations claim that cheap varieties of pepper were flowing into the Indian markets from Sri Lanka.

Gulam Chatoor, immediate past president of the Spices and Allied Products Producers' and Traders Association (SAPTTA) dismissed these claims as false and said that the reason Sri Lankan pepper is cheap in India is because zero tariff is imposed on spices under the Indo-Sri Lanka Free Trade Agreement. He also said that Indian traders need not fear that Sri Lankan pepper exports were a threat to the domestic market. The quantity of Sri Lankan pepper that is exported into the Indian market is around three per cent of average annual Indian production.

According to Chatoor, SAPPTA, together with Customs, have worked out strict measures in order to prevent pepper not originating from Sri Lanka, to be exported to India. A Sri Lankan certificate of origin is needed to be able to export and so far, there have been no complaints from Indian government officials about pepper originating from other countries, arriving in India from Sri Lanka. He added that after the introduction of the tariff in 2003, there has been no surge in Sri Lankan pepper imports into India, which clearly indicates that pepper is not re-exported from Sri Lanka into India.

Sri Lanka exported 5838 tonnes of pepper in 2003, out of which, 3000 tonnes of it was used for the oleoresin industry. Sri Lanka has traditionally exported around 2000-2500 tonnes of pepper for the oleoresin industry in. The pungency in the Sri Lankan pepper makes it ideal for India's booming oleoresin industry.

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