Kalpetta: The Trump administration's decision to roll back tariffs on Indian spices and farm products, including pepper, tea and coffee, among others, has made exporters happy. However, domestic spice traders and farmers are less enthusiastic, fearing that the benefits will accrue mainly to the import-export lobby.

Even so, many hope the exemption could reverse the depressed market status, as they have been facing a sales slump since the US imposed reciprocal tariffs. The confusion over the Trump regime's additional 50 per cent tariff on Indian products had added to their problems.

Several exporters believe that the price escalation of these products in the US market, along with the defeat of Republican candidates in the New York City mayoral and New Jersey and Virginia gubernatorial elections, may have contributed to the change in the administration's stance. Rising coffee prices and winter demand for spices like pepper may also have persuaded the Trump administration to revise the list and exempt essential items, they pointed out. 

According to the India Pepper and Spice Trade Association (IPSTA), in October alone, as many as 1,671 tonnes of pepper landed in India through various ports from several countries. Sri Lanka topped the list with 654 tonnes, followed by Vietnam with 458 tonnes, and Brazil with 306 tonnes. 

Prominent market players argue that there should be strict audit and control over the pepper imports and exports. They allege that companies importing pepper under the pretext of value addition for re-export reap the benefits by exporting them as Indian pepper without any value addition. 

Kishore Shamji, Director, IPSTA, told Onmanorama that the export market would certainly respond positively to the tariff exemption. "But the impact on domestic price will be limited, as imported pepper will also be exported as Indian pepper," he pointed out. 

"I don't believe that ordinary farmers and traders will benefit much from the tariff relief," he added. Shamji also said that only actual users should be permitted to import pepper for export after value addition, on recommendations from the Spices Board of India, using verified import-export data.  

Traders say that there is a huge stock of imported pepper in the country. Anil Kottaram, a Wayanad-based trader, told Onmanorama that pepper prices are likely to jump sharply, while coffee prices may rise only mildly. "Most of the coffee exported to the US is the Arabica variety; Brazil remains the primary supplier," he said. "India's pepper exports to the US are also minimal", he noted.  

Price peaks
According to the market data, pepper price rose by ₹500 per quintal (100 kg) soon after the tariff rollback. However, the volume of pepper arriving at trade terminals this week was 29 tonnes lower compared to last week. For more than a month, pepper prices have fluctuated between ₹68,000 and ₹71,000 per quintal, without any major rise or fall. 

Many traders have pointed out that international trade lobbies widely exploit loopholes in import-export policies to export Indian-grown spices, thereby denying Indian farmers and traders their rightful returns. 

"We don't expect any miracles, because even before the Trump tariff regime, we never received better prices for pepper or tea," said Rajeev M, secretary, Kayyunni Small Tea Growers' Association (KSTGA), which operates in the Nilgiri-Wayanad region. "Last year, there was a significant dip in global tea production, but prices did not rise because imports from other countries doubled or tripled, allowing importers to reap the benefits by exporting the same material", he pointed out.