Press release from Business Wire India
Source: AFTPAI
Thursday, October 11, 2012 11:06 AM IST (05:36 AM GMT)
Editors: General: Consumer interest, Economy, People, Social issues; Business: Business services, Commodities & materials, Major diversified industrial groups
--------------------------------------------------
AFTPAI Predicts Rough Phase for Indian Cocoa Sector
Mumbai, Maharashtra, India, Thursday, October 11, 2012 -- (Business Wire India) -- Dumping by foul means by unscrupulous Chinese operators, operating cross-border also from Malaysia, Singapore or Indonesia, engage in manipulative and unfair trade practises by pushing not only low grade and poor quality products on unsuspecting Indians, but also manipulating their own export agencies to provide them with incentives to do so in terms of cash support as well as misdeclarations about the quality and origins of their products and wrongly enjoying massive duty concessions to gain windfall profits.
Lacklustre monitoring and misplaced policies of Indian government adds to the hidden miseries of unsuspecting Indian consumers and industry. On one hand, WHO specified CODEX specifications are over looked while allowing low grade and contaminated imports of such products into India. On the other hand, government provides a discount of 50-65 per cent by means of import duties concessions on such products. The foreign traders and exporters lure Indian consumers by misusing the AIFTA treaty, a free trade treaty between India and ASEAN countries, meant to boost exports from India, by pretending and obtaining false origin certificates certifying goods are of ASEAN origin whereas in fact those goods are from Africa or other non-ASEAN origins, without adding the required value to such goods, and by restrictive trade practices forbidden by such treaties as well as WTO.
Malaysia-based operators, hell bent on destroying Indian industries and unduly influence Indian consumers, are systematically destroying Indian processors by selling cheap cocoa by-products on one hand and exploiting the concessions of duties on the other hand. They are exporting 95 per cent of total cocoa produced even though not much of Cocoa fruit is available in Malaysia (99 per cent of all cocoa fruit is imported from Africa for crushing).
They only have 1 per cent local fruit and 99 per cent imported cocoa beans, paying absolutely no imports duty, and adding no significant values either. E.g. if cocoa beans are available from Africa at $ 2500/mt, they make an all inclusive processing margin (labour, overheads, costs and profits) of a mere $ 250! So one wonders how even after processing locally with imported beans of cocoa, they are giving tough competition to processors in India and elsewhere in the world.
According to the Indian processors the quality of imported cocoa from Malaysia is very poor and due to treaty with India they are able to send it to India with no additional cost while on the other hand geographically Malaysia is not far from Southern coasts of India. Another Cococa processors says "it takes very less time and logistics cost if they import cocoa from Malaysia to South India on the other hand Cocoa by-product takes equal time if we bring them from other parts of India". Although such low value does not merit any concessions, such exporters allegedly manipulate data and their certifying agencies to comply, in order to obtain such major concessions; and certifying agencies turn a blind eye to promote their brethren, obviously for fees.
Indian processors also say the import duty on Cocoa beans in Malaysia is 0 per cent; however the same is 30 per cent in India. So the local processors have no standing competition with the cocoa coming from Malaysia as they enjoy 50-65 per cent advantage over domestic industries, forcing some of the big processors to turn importers of products instead. Paradoxically India has only 10-15 per cent duty on cocoa products imports from ASEAN countries and Malaysian importer have found this loophole in the system thereby exporting low quality cocoa product with only 10-15 per cent import duty to India and making huge profit margins along with their counter parts in India. This has not only resulted into damaging for local processors but also harmful for Indian consumers. Malaysian processors are also not following norms set by CODEX for food safety.
Further miseries are added by similar operators from Indonesia, except with one twist; they grow the cocoa fruits, of much lower quality than India, but the Indonesian exporters have successfully lobbied with their government to levy upto 15 per cent export tax on cocoa fruits. This makes exports of cocoa fruits outside Indonesia impossible.
India's processing capacity of 86,000 tons of Cocoa Beans is under threat from Countries like Malaysia, Indonesia and Singapore. According to a Malaysian exporter, Malaysia produces only around 5,000 T of beans grown locally and rest of the 390,000 T beans are imported from Africa. The total Output of Malaysian Cocoa products is about 400,000T i.e. approximately 1 per cent local fruit and 99 per cent imported beans from African countries. Indonesia on the other hand will not sell its cocoa fruits to the world, but instead enjoy benefits for concessional exports from its domestic industries.
So now is the right time for the government to increase cocoa production to meet the rising demand from the 15-billion-rupee chocolate industry and to cut dependency on imports of low quality cheap cocoa coming from imports. This will not only help India in saving foreign exchange but also provide guarantied buyers for farmers, brighter future for processors and good quality products for consumers.
CONTACT DETAILS
Firoz H Naqvi, firoz@aftpai.org
KEYWORDS
CONSUMER, ECONOMY, PEOPLE, SOCIAL, BUSINESS SERVICES, COMMODITIES, GROUPS
If you wish to change your Business Wire India selection please click on this link http://www.businesswireindia.com/media/news.asp and use your personal username and password to login.
Submit your press release at http://www.businesswireindia.com
No comments:
Post a Comment