Raviprasad Kamila/ The Hindu

• Public Ledger and Daily News carried reports about this quoting sources in the Sri Lankan Customs
• This follows reports that Sri Lankan Customs have uncovered a racket
• There are fears that spices are also being imported through illegal means

Mangalore, May 24: Arecanut and Cocoa Marketing and Processing Cooperative Limited (CAMPCO), a farmers' cooperative of Karnataka and Kerala, and other trade bodies in the country have expressed concern over reports of alleged import of arecanut and spices to India exploiting duty concessions under the Indo-Sri Lanka Free Trade Agreement.

Fearing an imminent crash in prices of domestic arecanut, clove, pepper, cardamom and other spices, these trade bodies have taken up the matter with the Union Ministry of Commerce and the Customs authorities, sources in the CAMPCO, All India Spices Importers' Association, Delhi, and Mumbai Dry fruits and Dates Merchants' Association have revealed.

The sources said these trade bodies had learnt through reports that Sri Lankan customs authorities had uncovered a racket under which arecanut and cloves valued at $ 1.09 million (Rs 4.9 crore) had been shipped to India using forged certificates claiming that this Indonesian produce came from Sri Lanka, in the past three or four months. The Sri Lankan Commerce Department had the sole authority to issue the certificates of country of origin. But the certificates produced by the exporters to Indian customs were forged, the sources alleged.

The Public Ledger, a world commodities weekly from London (being published since 1760), in its May 22, 2006 issue and the Daily News, a Sri Lankan newspaper, in its May 10, 2006 issue carried reports on this quoting sources in the Sri Lankan Customs.

The Daily News report said, "...investigation, triggered by a tip off from Indian Customs, has uncovered that the racketeers with the help of a Sri Lankan counterpart has shipped eight consignments of cloves and arecanuts valued at Rs 11.1 crore after producing forged country of origin export certificates to Indian customs authorities during the past three or four months...''

The Public Ledger said the Sri Lankan Customs officials had arrested an official at a shipping company in this connection. It said, "...Sri Lankan customs have determined that a leading shipping line in Colombo has been issuing bills of lading to prove that the shipment originated in Colombo when it did not... the exporter's address was fictitious...''

The sources said what was uncovered by the Sri Lankan authorities could be only the tip of an iceberg. It is feared that other spices are being imported to India through illegal means.

The CAMPCO sources said the cooperative body had learnt that the arecanut grown in Indonesia, Thailand and Burma was being routed to India under "job work scheme'' to extract tannin from arecanut and re-export tannin or value added produce to the supplier. But, they alleged, the arecanut imported was dumped in the domestic market and not used for the purpose for which it was being imported. Of the country's approximate five lac tonnes of annual arecanut production, Karnataka's share accounted for 2.20 lac tonnes. Besides, CAMPCO had farmers of Kerala who grow arecanut as its members.

Clove was grown in the State as an inter-crop in arecanut and coffee plantations. According to an estimate, the annual clove production of the State was 100 tonnes a month. But the consumption was 50 tonnes a month.

The sources said the domestic clove prices crashed from Rs 450 a kg to Rs 400 a kg in the recent days. The price of pepper had fallen by Rs 6 a kg. They attribute the crash to alleged illegal imports.

CAMPCO recently wrote to the Union Commerce Minister and the Prime Minister drawing their attention to the "illegal imports.'' Besides the Mumbai association has written to the Customs officials in Chennai, Tuticorin and Kochi.