Sunday, May 21, 2017

The Curious Case of Bhutan’s Cardamom Export

The emergence of the cardamom as the most successful “cash crop” has, in the past, caused a whole lot of problems for a whole lot of people – the growers (mostly the illegal ones), Dzongkhag Administrators, Forestry Officials, the marketing apparatus of the government (the FCB and the Export Division), and the environment.

The cardamom is once again making news. This time I fear that the problem is not as simple as it was then – this time round, the issue is lot more complicated and may not even be seen as a problem. However, I do not want to go into that - instead I want to treat you to a piece of history surrounding the bizarre business that was cardamom – a spice variety that has no consumption base in the country, even while we rank among the largest growers and exporters.

I hear that the Department of Agriculture Marketing & Cooperatives (DAMC), Ministry of Agriculture is on the look out for new/alternate markets for the Bhutanese cardamom. In a replay of history, they are said to be, yet again, looking at the Middle Eastern countries, as I did more than three decades ago, only to find, as did the DAMC, that the Middle East is not the market for our variety of cardamom.

The nose-in-the-air Arabs like the more expensive green jacket cardamom - originally native to South India and Sri Lanka; they scorn at the very mention of our cardamom - the lowly brown jacket variety. The curiously oriented Kuwaitees and the Saudees and other Arabs like to demonstrate their affluence by the amount of cardamom they use in their “Gahwa” (cardamom coffee). It is said that an Arab host’s level of hospitality is judged by the amount of green cardamom they grind into the Gahwa they serve to their guests.

But this post is not about Arabs or their peculiar Gahwa drinking and serving habits. It is about Bhutan’s cardamom and of those of us who were subjected to inexplicable trials and the tribulations associated with its purchase, storage, packaging and final export. There was nothing straightforward in the manner in which we went about exporting a large volume of Bhutan’s cardamom during the late 70’s and the 80’s.

> While the importers in Pakistan and the intermediaries in Singapore insisted that our cardamom’s final destination was the Middle East, my market survey trip to the Middle Eastern countries revealed that the Arabs use green jacket cardamom in their coffee/tea – not our brown jacket one. This meant that there was/is virtually no market for our cardamom in the Middle East. Thus the claim that our cardamom was finally exported to the Middle East was a whole lot of bull;

> Our cardamom was supposedly destined for the West (Middle East) but the cargo was loaded on board the ship bound for the South (Singapore);

We were the exporters of the cardamom but the importers in Pakistan established the Letter of Credit in favor of the intermediary in Singapore, who in turn established a back-to-back LC in our favor.

Under normal circumstance, we should have shipped the export cargo directly to a Pakistani port with transshipment in Singapore, if necessary – but the cargo was required to be consigned to the intermediary in Singapore and discharged at Singapore port. It was then re-exported to Pakistan as an export from Singapore. This was costly and cumbersome and an unnecessary process, and yet the importers in Pakistan insisted on this process.

This was totally bizarre to us, until much later, we found out the real reason behind this whacky way of conducting the trade.

It turns out that the Pakistanis were, willy-nilly, using Bhutan’s cardamom to export illegal capital out of the country and park it offshore. This came to light when one of the importers in Pakistan wanted to deal with us directly. We were finally happy to be doing some straightforward business, for a change – until we hit a snag half way through the negotiations and had to terminate the dealings entirely.

The Pakistani importer wanted us to over-invoice the shipment - they wanted us to issue Commercial Invoices valued at two times the agreed price. Once the LC was established and negotiated by us post shipment, they wanted us to plough back the difference between the agreed price and the value of the LC, into their offshore bank account.

As a government enterprise we could not be a party to such a deal that verged on the money laundering. The negotiations fell through and we went back to dealing with the intermediary in Singapore. But we finally understood the cause for the labyrinthine journey our cardamom consignment had to take.

While that mystery was finally solves, to this day I am still unsure as to where Bhutan’s cardamoms finally ended up.

Around the same time, strangely Bhutan emerged as the world’s largest grower and exporter of brown jacket cardamom – something that is totally IMPOSSIBLE – given that Nepal, Sikkim and India were much bigger growers of the brown jacket cardamom! How it came about is rather ticklish – something that I am still unwilling to write about :)

1 comment:

  1. "How it came about is rather ticklish – something that I am still unwilling to write about :)" The ending though. It made me more curious as to how it got to be that way; if you have such a story as to explain the matter; kindly share. It's always been a good read.