Following the halt on the export of cardamom to India, relevant government offices are yet to engage with the Government of India (GoI) to resolve the issue.
In Phuentsholing and other cardamom hubs, exporters are not buying the cardamom anymore. This has fuelled speculations that the price could drop further as farmers would be forced to sell at lower rates when they bring the produce to the market.
A kilogram (kg) of cardamom in Phuentsholing fetches Nu 450 today.
Earlier, BAFRA officials in Thimphu had said that they would make a trip to India along with officials from the department of trade to discuss with their counterpart in India. The team has not travelled to India yet.
“We are prioritising this,” a BAFRA official said.
Meanwhile, it was after the Indian Goods and Services Tax (GST) came into effect in July 1, 2017, that the ICEGATE system was launched at the customs office across the border. This system asks for a clearance from the Plant Quarantine Services of India (PQSI), which Bhutanese exporters are unable to produce. The regional PQSI office in Kolkata does not issue clearances for Bhutan and they do not recognise the BAFRA certificate.
Bhutan Exporters Association (BEA) and exporters have raised the issue at several meetings in the last one and half years but nothing has happened to date. Although Jaigaon was closed, exporters were still able to export from Samtse-Chamarchi, which is also closed now.
A study “Cardamom- a rapid market appraisal” by the department of agricultural marketing and cooperatives (DAMC) published in September 2017 had reported on the non-recognition of BAFRA Phytosanitory Certificate (PSC) by the Indian counterpart at Jaigoan.
It had stated about the Electronic Data Interchange (EDI) system GST introduced at Jaigaon checkpost.
“The specific issue emanating from the introduction of EDI system arising from the GST application has to be pursued urgently by the government to facilitate unimpeded marketing of cardamom,” the report says.
The report states that Bhutan produced 1,163 metric tonnes (MT) of cardamom in 2010, which more than doubled to 2,736MT in 2016. The total harvested area also increased to 11,089 acres in 2016 from 4,771 acres of land in 2010, the study states. This means thousands of farmers are engaged in cardamom farming.
Although the study shows that export to Bangladesh had been more compared to India during 2010 and 2015, export to India picked up rapidly between 2015 and 2016, and exceeded Bangladesh’s export volume.
In Phuentsholing, Bhutan Export Business Line (BEBL), RSA, and Soenam Yanchu Private Limited (SYPL) are the major cardamom exporters.
According to BAFRA records, so far, BEBL has exported 22MT to Bangladesh and 20MT to India. The export house has 12MT in stock.
RSA has exported 530MT so far to Bangladesh, an increase from 458MT in 2017. SYPL has exported 114MT so far this year to Bangladesh and has 2MT in stock.
BAFRA office records show that 60 percent of the total exports were made to Bangladesh. However, unofficial export, roughly 75 percent is exported to India.
In Samtse, a supplier, Shivaraj Ghalley said he has stopped buying cardamom. “What do I do buying when I already have some stocks,” he said.
He has about 60-80 bags of cardamom in stock. A bag would be more than 40kg cardamom.
About 75 percent of the total cardamom production in Samtse, according to him, would be still stacked at farmers’ homes today.
“It is not that cardamom cannot be sold; it can be if it’s done illegally,” he said. “But this would ruin the rates.”
Shivaraj Ghalley said that the deteriorating rate today was because of the illegal transactions made after Bhutanese exporters could not produce necessary documents at the Indian customs offices.
BEA general secretary Tshering Yeshi said that the association has written a letter to the ministry of economic affairs regarding the issue.
Rajesh Rai | Phuentsholing