Cardamom prices drop again
Much to the dismay of cardamom farmers and traders, the prices of cardamom have further slumped recently. The current price for a kilogram of big cardamom is Nu 450 and Nu 400 for small cardamom.
Until last week, prices remained at Nu 500 and 460 respectively.
For the past few years, the prices of cardamom have remained constantly low, affecting the income of farmers and traders. Most traders have not traded for the past few days, while their counterparts have also stopped buying.
A Bhutanese trader in Phuentsholing, who deals in cardamom business, said the strict regulations from the Indian customs have led to further decrease in price. The Indian customs officials have started to demand quarantined certificate for cardamom from Bhutan, which the traders are unable to produce.
Most of the Bhutanese traders sell to the Indian traders in Phuentsholing. They say that the Indian customs officials are not accepting the certificate issued by Bhutan Agriculture and Food Regulatory Authority (BAFRA). BAFRA issues certificate on the export quality agro products. The Indian customs officials, citing absence of testing machines in Bhutan, have so far not accepted the certificate issued by BAFRA.
Cardamom export has come down since then, the Bhutanese traders in Phuentsholing say. The Indian importers, citing the inconveniences, have not agreed to increase the rate.
According to the Bhutanese traders, they had earlier taken the samples for quarantine certificate in Nepal. As it is required in every consignment, it has become difficult for them to send samples to Nepal daily. They expressed the need to establish such centres in border towns in the south.
“Then we can bargain for better price,” Shiva Lal Kararia from Bhutan Business Export Line says. Though it doesn’t cost obtaining the certificate, traveling costs around Nu 5,000 and the certificate is valid for a single consignment.
While trade from India and Nepal to Bangladesh costs 60 percent duty, trade between Bangladesh and Bhutan is duty free. These traders try to bring in cardamom from India and export duty free from Bhutan. And without direct link to the destination customers, these Bhutanese traders have to deal through the Bangladeshi agents in Bhutan.
“They tend to take advantage of our weaknesses. They know we have to depend on them. So they play around,” another trader said.
These agents take the products to Bangladesh using Indian routes. If they can deal directly with the customers in Bangladesh the price could increase by almost Nu 100 a kilo. Bhutanese products are not exported in bulk to India.
Another trader in Phuentsholing said the Indian traders are well connected and fix the rate where they will be ultimately forced to sell at the end.
“We cannot stock for so long as we have to roll the cash. Ultimately we are at loss,” Singye Wangdi said, adding that apart from a handful of Bhutanese traders, most of the cardamom trade is done by Indian traders.
The formation of syndicate by the Bangladeshi agents is also another reason, according to the traders, for the dropping cardamom price. These agents play with the price, which compels the Bhutanese traders to sell as they would need cash for next transaction. They can’t keep their product for longer duration.
Meanwhile, BAFRA officials in Phuentsholing said the Indian customs officials do not accept the certificate issued by the agency claiming that the products have to be tested in India. The Indian government has not yet established plant and animal quarantine centers along the border towns and the Indian border towns such as Jaigaon, Hatisar, Chamurchi, Daranga and Rangapani are yet to be considered as valid point of entry.
“They have not recognized the towns as valid entry points. But the issues have been discussed diplomatically and is expected to be resolved soon,” Phuntsho, Officer In-charge of BAFRA in Phuentsholing said.
Meanwhile, the issue has come up after the Indian government’s imposition of Goods and Services Tax (GST) in India. The traders now have to route through ICEGATE (Indian Customs EDI Gateway), an e-commerce portal of the Indian Customs which offers services such as e-filing of Bills of Entry point.
Knowing that the cardamom is exported unofficially, the Indian customs officials asks for ransom indirectly, according to Bhutanese traders.