Poppy seeds were selling in the Indian market in October at Rs 520 a kg, which has dropped to Rs 425 a kg now. Lack of demand would push it down further to Rs 300 a kg in January 2009, they claimed.

Meanwhile, the traders said they would be presenting a memorandum to the Finance Minister requesting him to introduce “kg-base duty” for imported spices including poppy seeds on similar lines of almonds imported from the US.

They said India imports spices such as cloves, cassia, poppy seeds, star-ani-seeds, ginger, arecanuts, long pepper, nutmeg and mace, as these items are at short supply from the indigenous sources. The domestic market is so large that the indigenous production falls much short of the demand, they said. These spices are produced is very small quantity in Kerala, Tamil Nadu and Karnataka.

The import duty levied, at present, on all these items are from 36 per cent to 78 per cent. In some cases such as poppy seeds, tariff value is fixed. Notwithstanding, they alleged that there were manipulations taking place in this case also.

They said almonds import from the US is a very big trade as India imports 2,000 full container loads (fcl) of this tree nuts annually. The import duty is at Rs 35 a kg and this “kg-base duty” has been in force for the past ten years and as a result “no fraud imports have so far been reported”, they claimed. Therefore, they demanded that “kg-base” duty be fixed for imported spices as it, they said, would arrest under invoicing and all sorts of manipulations that are depriving the government of its revenue.

They said India imported cloves from Zanzibar, Indonesia, Madagascar, Comoros and Brazil paying import duty at at 35 to 41 per cent. However, imports of this item from Sri Lanka attract only four per cent duty. India imports almost 90 per cent of the crop from the island neighbour.

Cassia and star ani seeds come from China and Vietnam, while long pepper or piper is imported from Indonesia. Nutmeg and mace are imported from Sri Lanka and Indonesia.

According to these traders, introduction of kg-base duty would also ensure the indigenous farmers of remunerative prices which in turn would motivate them to take up cultivation of these spices by bringing more areas under the crop. They also said that imposition of “kg-base duty on imported dry grapes (Kishmish) has made the country its largest grower and exporter from Sangli and Bijapur. Besides, they claimed, such a decision would help in the survival of small importers. They suggested that the rates of kilo-base duty be fixed from Rs 15 to Rs 50 a kg depending on the spice.