Car­damom prices drop again

Business Bhutan - - Business - Kr­ishna Ghal­ley from Phuentshol­ing

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.

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