INTERNATIONAL-TRADE IN NUTMEG AND MACE - ISSUES AND OPTIONS FOR INDONESIA

Indonesia produces more than three-quarters of the world's output of n utmeg and mace. In 1986 the government introduced export regulations t hat facilitated cartelisation of the market. This led to a dramatic ri se in world prices. Problems such as accumulation of unsold stocks in Indonesia and smuggling of nutmeg and mace through Singapore led the g overnment to abolish the regulations in 1990. World prices fell steepl y, and since then have remained low. Indonesian nutmeg and mace export ers have called for the reregulation of the market. This paper assesse s the case for reregulation, considering the costs and benefits to aff ected parties within Indonesia and the long-term sustainability of reg ulation.