Clove import raises a stink

Clove traders in Delhi and Mumbai plan to approach the Directorate of Revenue Intelligence and the Central Board of Excise and Customs in Delhi with regard to the misuse of import regulations in case of cloves.

Certain cloves importers are misusing the regulations to suit themselves, alleged a trader in Mumbai.

"Cloves sourced from Singapore, being a major trading market for the commodity, are exported to Bangladesh and from there to India under the garb of Bangladesh cloves ," he said.

The Bangladesh origin cloves have entered the Kolkata market and are also reported to be filtering into the Delhi and Mumbai markets. Bangladesh is not a producer of cloves.

However, importers in India said the ministry of commerce in Dhaka issues a SAARC Preferential Trade Agreement (SAPTA) certificate of Origin to the imported cloves.

This is affecting the trade of those who are still importing cloves by paying a duty of 35 per cent.

Import of cloves from any country other than South Asian Association for Regional Co-operation (Saarc) countries is subject to heavy import restrictions. Imports from Saarc countries are allowed at a concessional rate of 3.50 per cent as opposed to 35 per cent rate applicable on imports from any other country.

The current ruling price for Indonesian/Madagascan/Zanzibar cloves is between $3,000 - $3,500 per metric tonne (mt).

The Sri Lankan cloves are at $4,000 per mt, owing to its duty free import status. The domestic prices for Lankan cloves are at Rs 180-185 per kg compared with Rs 220 per kg for cloves of other origins.

The Indian demand for cloves is currently being met with Sri Lankan imports and the warehoused stocks, as fresh imports are unavailable at 35 percent duty.

The overall crop situation of cloves is bad, as Indonesia is set to enter second year of small crop size of about 35, 000 mt as compared with a normal 80,000 mt. Cloves of other origins such as Madagascar (8,000 mt), Zanzibar (4000 mt) are also facing a below normal crop situation.

Bitter taste

• Imports from Saarc countries are allowed at a concessional rate of 3.50 per cent
• Imports from other countries pay 35 per cent import duty