KARACHI, Aug 13: The wholesale prices of various spices have started showing a drop by three to eight per cent following government’s decision of cutting import duties to 10 per cent from 20 per cent on August 10.

According to senior vice chairman of Pakistan Kiryana Merchants Association (PKMA), Jaffer Kudia the wholesale price of black pepper has now plunged to Rs4,075 per 40 kg, from Rs4,200. Similarly, the price of imported cloves has declined to Rs17,000 per 40 kg, from Rs18,500.

Cassia’s wholesale price has declined to Rs2,700 per 40 kg, from Rs2,800 while price of cardamom (big) has caved in to Rs11,000 per 40 kg, from Rs11,500, he said.

He said prior to government’s decision — smuggled spices have captured 90 per cent of the market.

Kudia said that the cut in import duties will not completely eliminate the smuggling overnight but it will help in cutting the market share of smuggled items to some extent.

“We expect a drop in smuggling by 10-20 per cent in short term, plunging to 25-30 per cent in medium term and to 40-45 per cent in the long run in terms of drop in smuggling of spices,” he said.

He said the cumulative expenses incurred by genuine importers in terms of cut in duty will now come to 44 per cent as compared to 60 per cent prior to cut in import duty.

However, genuine importers seem not in a hurry for opening letters of credit (LCs) shortly as markets have already got sizable stocks of smuggled items. Importers are waiting for the smuggled stocks to deplete which will take some time as market lacks any demand spurt, he said.

As soon as the genuine imports of these four spices pick up — the wholesale prices will further drop and consumers will witness its impact at retail level, he added.

Pakistan’s annual import bill of various spices stands at $17-18 million with quantity ranging between 16,000-20,000 tons.