The absence of uniform valuation of imported cloves is causing distortion to the trade, importers complain.
Loss of revenue?
They allege that at Chennai and Tuticorin ports, the value of Sri Lankan cloves has been increased from $4,600 to $5,300 a tonne. Cloves from Sri Lanka attract four per cent import duty. At the same time, the authorities are clearing Zanzibar cloves at a value of $3,000 instead of $5,300. Imports from the African country attract 36 per cent Customs duty. As a result of undervaluation, the Government is deprived revenue to the tune of Rs 20 a kg, traders allege.
“Undervaluation of cloves imports is killing markets. It creates corruption and unfair trade practices and should be stopped,” says a trader.
The traders have urged the Centre to adopt a policy similar to the one for poppy seeds. Uniform valuation for poppy seeds is fixed every 15 days by the Central Board of Excise and Customs so that import duty can be collected at all the ports.
Delay in clearance
Earlier, poppy seeds imports, too, were under-invoiced in the absence of uniform value for imports, they say.
Sri Lankan cloves are mainly imported through the Tuticorin port, while Zanzibar cloves come through Navasheva, Tuticorin, Chennai and Kochi. The valuations are different at each port and the commodity, the traders say. Besides, imports are inordinately delayed at some of the ports due to delay in clearance by the public health department. Such delays results in the importers losing money towards demurrage and interest, they claim.
“This issue needs urgent intervention of the Agriculture Ministry to speed up clearances at all ports. In fact, several big ports have no testing facility, which needs to be made available to facilitate fast clearances.”
Production estimate
Cloves prices in the country (for a kg) are Rs 260 for Colombo and Rs 300 for Zanzibar.
Indigenous cloves production is estimated at 2,000-2,500 tonnes. Domestic demand is estimated to be over 15,000 tonnes. Harvesting is underway in some growing areas. But shortage of skilled labour is said to be a major problem.
The crop this year is comparatively good because of the favourable weather conditions, growers in Kerala's Kollam district told Business Line. However, the prices at Rs 300-Rs 310 are far from being remunerative, they say, adding that anything below Rs 380 a kg would lead to loss for the growers.
Prices in the world market (for a tonne) were: $4,500 to $5,000 (Colombo), $6,500 (Indonesia), $5,300 (Zanzibar), $5,200 (Madagascar/Comoros), and $4,750 (Brazil).
Source : Business Line