According to Mayur Desai, managing director of Perfect Cardamom and Spices, domestic cardamom will not only loose out in the home front but also will loose its edge in the international market.

As a result of the announcement regarding permission for cardamom imports theprices have shot up in the international market. Before the announcement of the Exim policy, the prices prevailing in the international market for cardamom were approximately $8.00 to $12.00, depending on quality. The average price ruled at $9.00 for fairaverage quality (FAQ).

After the announcement of the policy, the prices have shot-up to $9.00 to $14 depending upon the quality. Thus the average price for fair average quality of cardamom has shot up to $11.50 (all prices are CIF at any Indian port).

According to market sources, few consignments have already arrived at Indian ports and few others are expected to arrive at Mumbai or JNPT and the goods have been invoiced at $8 to $7 per kilogram. As stated above none of the goods are available in any part of the world at less than $9, which has been prevailing in the international market for the last three months.

The present market CIF price for FAQ cardamom is $9.50 per kg which works to roughly Rs 400 per kg. Applicable duty on Rs 400 at the rate of 38.50 per cent works out to approximately Rs 155 per kilogram. Overheads like clearing, forwarding, transportation and others expenses amount to another Rs 5 per kg.

Thus the total cost works out to Rs 560 per kg. Moreover, addition of sales tax,turnover tax plus surcharge at the rate of 5 per cent works out to another Rs 30 per kg. Thus the total cost of the imported cardamom works out to Rs 590 to Rs 600 per kg taking into account the loss in weight in cardamom by evaporation of moisture.

As against this, the prevailing price of domestic cardamom is Rs 625 per kilogram which can be easily traced at the auction centres like the one at Navi Mumbai and other places. If the goods are allowed to be cleared at $6 to $7 per kg, the costs sharply reduces by Rs 55 per kilogram.

Under-invoicing of goods will not only hurt the domestic cardamom industry but also rob the government of the revenue by at least Rs 55 per kg. In a letter addressed to Spices Exporters Forum, Mayur Desai has also cautioned that in absence of action against such unscrupulous imports, it will ruin the local market and resultantly the farmers.

The new policy has shut the doors for routing cardamom imports through Nepal, notorious for illegal imports of restricted goods into Indiaas it has been allowed to import directly into the country. By under-invoicing, the cost of goods reduces sharply and make imports lucrative. Such imported cardamom will flood the market which will ruin the domestic markets. To remain competitive, the local farmers will have to reduce price and in the process loose their profits. This will ultimately blunt the competitive edge of the country in the international market, he argued.

Meanwhile the estimated production of cardamom in the country during the current year has been further revised downward by the auctioneers and traders by another 10 per cent to a total decline of about 40 per cent.

Unfavourable weather conditions have played a havoc with green gold of India which is expected to push down the all-India cardamom production to 4,500 tonnes against previous year's 7,090 tonnes.

The total availability of the precious spice is likely to be drastically lower compared to last year at 5,000 tonnes with a carryforward stock of around 500 tonnes.Previous year had a carry forward stock of 1,000 tonnes which increased the total availability to 8,090 tonnes.

The international prices have shot up as crops in both Guatemala and India, the largest producers and the only suppliers in the global market are facing severe crop failures.

The crop loss in Guatemala is expected to be 50 per cent at 8,500 tonnes against previous year 17,000 tonnes. This was supposed to discourage imports of cardamom in the country but the permission to import has reversed the situation.