Report on international business Page 1 June 21, 2012 THE SCOPE OF CHILLI OF PAKISTAN IN BLOBAL MARKETS Table of Contents Scope of Chilli of Pakistan in global markets .........2 History ............................................................2 Introduction .....................................................2 Potential export markets or importer countries of chilli in the world ............................................4 The major chilli producing Nations or Competitors of Chilli ............................................................. 4 The exports of chilli of countries in the world.............6 Market Influencing Factors ..................................6 The major areas where chilli is cultivated in Pakistan ...........................................................6 Current production of chilli in pakistan ...............7 Potential export markets for chilli of Pakistan ......8 Brands of chilli of Pakistan ................................8 Current exports of chilli of Pakistan ...................9 Problems of Export of Chilli for Pakistan .............10 Suggestions and recommendations ..........................11
Transcript
June 21, 2012the scope of chilli of pakistan in blobal markets
Table of ContentsScope of Chilli of Pakistan in global markets ................................................................2
History ....................................................................................................................................................2
The major areas where chilli is cultivated in Pakistan .............................................6
Current production of chilli in pakistan ............................................................................7
Potential export markets for chilli of Pakistan ..............................................................8
Brands of chilli of Pakistan .......................................................................................................8
Current exports of chilli of Pakistan ....................................................................................9
Problems of Export of Chilli for Pakistan ......................................................................10
Suggestions and recommendations ......................................................................................11
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Scope of Chilli of Pakistan in global markets
HistoryChillies originated in the Latin American regions of New Mexico and Guatemala as a wild crop in around 7500BC. The people native to these places domesticated this crop in 5000BC as per the remains of the pre historic Peru. This crop is said to be the first ever domesticated crop in America. In that time, chillies were cultivated by the farmers with a primary crop to protect the primary crop from any damage that the birds could do.
Christopher Columbus, the founder of America, was one of the first Europeans who encountered and consumed chilli, and called it peppers due to the similarity in taste. It was found that crushing the dried pods give chilli powder, which later was identified as a substitute of ‘peppercorn’. In some time, chilli earned more recognition as compared to the peppercorns being simpler to produce and a lot too hot from the other spice.
This crop came into the Asian continent in as late as the 16th century with the identification of new sea routes by Portuguese and Spanish explorers. It became popular in the whole of Asia rapidly and native Asians started cultivating this crop here as well. The south Asian climate suited this vegetable crop, and since then the concentration of production of chillies shifted to Asia. In today’s scenario, the most sharp and valued varieties of chilli are grown and present in Asia only.
Introduction
Chilli is a fruit of the plants ‘Capsicum annuum’ and ‘Capsicum frutecens’ that come from the genus Capsicum, belonging to the family of Solanaceae, which also include tomato and potato. These
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fruits are small in size and are known for their sharp acidic flavor and color.
Red Chilli, a major crop of Pakistan, is not only an important ingredient in food but is also used for essence production. It isused in foods for pungency and red colour. Chillies are an excellent source of vitamins A, B, C, E and P. Chillies are one of the largest traded market. Chillies are a warm-climate crop, most Chilli cultivars grow well in areas where the average temperature is 30°C for at least four to five months of the year
Vitamin P in green chillies is considered to be important as it protects from secondary irradiation injury. These contain more vitamin C (340 mg per 100 gram) than the usual recommended doses; more at green stage than the ripened. Processed forms of chillies retain most of their vitamin C content, except for dried ones.
Medicinal value: Chillies are valued for their soothing effects on the digestive system, relief from symptoms of cold, sore throats and fever, circulation especially for cold hands and feet and as a hangover remedy. Chillies can act as a heart stimulant, which regulates blood flow and strengthens the arteries, possibly reducing heart attacks. Medicinally, capsaicin is being used to alleviate pain. It is the most recommended topical medication for arthritis.
The pungency in chillies is due to an alkaloid capsaicin, which has high medicinal value. Capsaicin causes prostate cancer cells to kill themselves. Currently, capsaicin is used topically in proprietary creams to treat pain and neuropathies, whereas formerly chilli-impregnated plasters and poultices were used.
Chilli peppers, especially hotter varieties such as Cayenne and Habanero, can also be used externally as a remedy for painful joints, for frostbite and applied directly to stop bleeding. They stimulate blood flow to the affected area, thus reducing inflammation and discomfort.
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It is also used in homeopathy. A non-conventional use of chilli is in the self-defence sprays which are gaining popularity in the US. These sprays consist of capsicum oleoresin at ultra high emission rate which temporarily immobilizes the attacker. Besides all these, it is the compound that is the active ingredient of some of the organic insect and animal deterrents and the active component in the human deterrent 'Mace.
Potential export markets or importer countries of chilli in the world
World trade in chillies account to an approximate of 16% in the total spice trade in the world. This share places chilli on the second position after black pepper in the world trade. The following is the list of the leading chilli importing countries in the world
1. United Arab Emirates2. European Union3. Sri Lanka4. Malaysia5. Japan6. Korea
The major chilli producing Nations or Competitors of Chilli
As chilli is a simpler crop to cultivate, it is produced all over the world. The world production level has been on an increasing trend and there has been a significant rise in the production level since the late 1990s. It has reached around 7 million tons now from the figure of 2.5 million tons in the last decade. The major chilli producing nations are
1. India (Asia)2. China (Asia)3. Indonesia (Asia)4. Korea (Asia)
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5. Pakistan (Asia)6. Turkey (Asia)7. Sri Lanka (Asia)8. Nigeria (Africa)9. Ghana (Africa)10. Tunisia (Africa)11. Egypt (Africa)12. Mexico (North America)13. United States of America (North America)14. Yugoslavia (Europe)15. Spain (Europe)16. Romania (Europe)17. Bulgaria (Europe)18. Italy (Europe)19. Hungary (Europe)20. Argentina (South America)21. Peru (South America)22. Brazil (South America)
India is the largest producer of chilies in the world contributing 25 percent of the total world production, of which only 4 percent is exported because of high domestic consumption. Besides India, other major producers and exporters are China, Pakistan, Morocco, Mexico and Turkey. Major importers of chilies from Pakistan are Gulf States, the US, Canada, Sri Lanka, the UK, Singapore and Germany. It is exported in different forms that are: fresh chilies, stalk less chilies, chili powder and oleoresin, as another form.
Export of red dried chilies from Pakistan has declined from Rs1.127 billion (during 2003-2004) to Rs846 million after European Union food authorities have detected the presence of aflatoxin (Pakistan Horticulture Development and Export Board (PHDEB). Its production fulfills 88 percent of the country’s requirement. Chili not only meets domestic consumption but also helps in earning foreign exchange. The potential for increasing exports of whole, powder and crushed chilies in consumer packs is very high, provided we meet the stringent quality requirements of importing countries by preventing contamination from external sources during harvesting, post-harvest handling, processing and storage.
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China, India, Spain and Peru are the largest producers and exporters of chilies with the export market share of 27%, 16%, 11% and 9% respectively in the world. The value of total import for this product in the world is estimated to be US$ 602,343,000.
The exports of chilli of countries in the world
The major chilli exporting players along with their percentage share in the world total exports are
World trade in chillies account to an approximate of 16% in the total spice trade in the world. This share places chilli on the second position after black pepper in the world trade.
Market Influencing Factors
1. Seasonal price fluctuations2. Overall production in the country3. World demand4. Stock available in cold storages
a. Hedging among the various varieties of chilli
The major areas where chilli is cultivated in Pakistan1. Kunri, a small town of Umer Kot
district is the home of Red Chillies2. MirpurKhas about 82% of chilli is produced in Sindh3. 18% of chilli is produced in rest of the provinces of Pakistan
Domestic production and economic value: Chillies are grown on an area of 38.4 thousand hectares with production of 90.4 thousand tones, with an average yield of 1.7 tons per hectare with 1.5 per cent share in the GDP.
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Sindh is the major producer of chillies followed by Punjab and Balochistan.
Pakistan earned Rs1.127 billion during 2003-2004 by exporting red chilli powder, whereas, export earnings from all fruits were Rs5.912 billion during the same period. This reveals the potential of this non-staple crop. Despite its importance the yield has declined from 86.5 (1994-95) to 55.8 thousand tons (2003-04) (Figure 1). This decline in yield is due to a number of factors including poor quality seed, mal-cultural practices and diseases like viruses, collar rot and phytophthora root rot.
Current production of chilli in pakistan
product
2010-2011 2011-2012(p) %Change
In productio
nArea(000
hectares)
Production
(000 tons)
Area(000
hectares)
Production
(000 tons)
chilli 63.6 171.7 21.8 37.2 -78.3
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Potential export markets for chilli of Pakistan
1. Gulf States2. The United State 3. Canada4. Sri Lanka5. The UK6. Singapore 7. Germany
The European Union countries and Japan banned the import of chilly form Pakistan due to aflatoxin problems. Having about 80 per cent of aflatoxin in its chilly, Pakistan is unable to compete in International chilly market despite producing an unparalleled species of the commodity.
In Pa1kistan, the Aflatoxin level in chilli crop varies from 02 PPB to 100 PPB. With this level of Aflatoxin; we cannot compete in the international market. A lot of work is required to improve the quality of chilli crop.
Among the European Union countries, UK is by far the most important importer of Chillies, reflecting its colonial heritage and large ethnic community with the Netherlands the second largest importer. The world demand is expected to go up, consequently there expected to be a great scope for export of Chillies. Demand is growing for value added products using Chillies such as Chilli paste curry powders and other sauces for the convenience food industry.
Brands of chilli of Pakistan
1. fresh chillies2. stalk less chillies3. green chilies4. chilli powder 5. Oleoresin. 6. Maxi7. Desi 8. Nageena.
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Current exports of chilli of Pakistan2004
US $ Mil2005
US $Mil2006
US $ Mil2007
US $ Mil2008
US $ Mil
4 3.8 8.1 4.7 4.96
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Export of red dried chillies from Pakistan has declined from Rs1.127 billion (during 2003-2004) to Rs846 million after European Union food authorities have detected the presence of aflatoxin (Pakistan Horticulture Development and Export Board (PHDEB).
The potential for increasing exports of whole, powder and crushed chillies in consumer packs is very high, provided we meet the stringent quality requirements of importing countries by preventing contamination from external sources during harvesting, post-harvest handling, processing and storage. This can be achieved only through an integrated approach with the collective efforts of farmers, processors and traders
Problems of Export of Chilli for Pakistan
There are various reasons due to which the export of chilies declines. Some of them are given as follows:
1. Aflatoxin and chemical residues are two major constraints in the export of chilies to Europe, Japan and the US as buyers expect a high degree of hygiene and sanitation in processing and preparing chilies forexport.
2. There is need does not mostly used to produce chilli which will have more adaption than the exotic
(Imported) ones.
3. F1 hybrid production is not used as needed which causes both fresh and powdered chilies can be increased manifold.
4. The lack of quality improvement and enhanced production of red chili in Pakistan.
5. The lack of modern equipment and techniques in for growing and post harvest handling , storage procedure(i.e.; Mycotoxins ,Drying & Processing, Heavy metals, Pesticide, Residues Allergens,Undeclared colours, whether from the environment or added, Processing aids) of spices to ensure that the parameters that cannot be reconditioned. This could help the authorities concerned toovercome on the problem. The old storage system cause fungus in the chilies, as chilies stored in openair for many days while the fungus takes three days to infect the crop.
6. The lack of subsidy to the farmers to purchase all inputs and the availability of high quality seed of high yielding varieties.
7. The lack Off-season production technology to external sources during harvesting, post-harvest handling, processing and
