Chilli Export To Sri Lanka 2z4355

CHILLI EXPORT TO SRI LANKA VINOD PRAJAPAT (63) DATE:12/10/2009

Introduction 

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Chilli belongs to the genus capsicum which is native of tropical America. It was introduced into India by the Portuguese during the 16th century.chilli is also known as capsicum, Red Chilli and paprika depending upon the species, variety and the manner in which it is used. Out of the 109 spices listed by the ISO, India produces as many as 75 in its various agro climatic regions.

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India s for about 45% (2, 50,000 tons-2002-03) of the global spice exports, though exports constitute only some 8% of the estimated annual production of spices at 3.2 million tons (2002). Over all, spices are grown in some 2.9 million hectares in the country. Spice production in India, as much of the agriculture in the country, is undertaken in millions of tiny holdings and determine the livelihood of large number of the rural.

Crop Cycle 

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Cultivation Pattern:

Chillies are herbaceous annuals grown in tropical and sub tropical climates.chillies are grown throughout the year in India. The crop is sown from July onwards and the sowing season extends till September. Chillies need well drained soils and are mostly cultivated as a transplanted crop. Crop duration is 150 to 180 days depending on the variety season , climate, fertility and water management. Crop can be grown in the regions with rainfall between6001250mm. Arrival start from January and extend till May. The peak arrival period is from February till April.

Indian Scenario 

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Chillies are cultivated mainly in the states of Andhra Pradesh,Orissa,Maharashtra,West Bengal,Karnataka,rajasthan and Tamilnadu.Andhra Pradesh is the foremost ing for 50% of the production in the country. India’s chilli production stood at arround 12lakh tonnes while the global out put was 27.7lakh tonnes.

Global Scenario 

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Chilli is the second largest traded spice in the world with a 22% contribution in the world spice trade. India contributes 25%of the Global chilli exports. Others major producers and exporters are China,Spain, Mexico,Pakistan,Morocco and Turkey. Major importers of indian chillies are Srilanka, Bangladesh,U.K.,, and U.S.A.

Major Trading Centers in India States Andhra Pradesh

Trading Centers Guntur,warangal,Hyderabad,Guddapah,Vijaywada,Rajamundri,Nellore.

Maharashtra Nasik,Ahemed Nagar,Sholapur, Aurangabad,Nanded,Amaravathi, Lasalgaon Karnataka Gharwad,Mysore,Hassan,Banglore, Bellary,Ranibennur,Hubli,Byadgi. Tamil Nadu Pollachi,Ramanad,Madurai,Trichi, Thani,Dindigul,Virudunagar,Sttur.

State Wise Contribution Of Chilli State Wise contribution of Chilli

AP

18%

27%

8%

Karnataka MP Maharashtra Orissa

2% 9%

12%

5%

19%

UP TN Others

Acreage and Production Acreage and Production Year

Area

Production

2001-02

8.80

10.69

2002-03

8.28

8.96

A c r e a g e a n d P r o d u c t io n o f C h i lli 12

A re a

10

P r o d u c tio n

8 6

2003-04

7.74

12.35

4 2

2004-05

7.37

11.85

2005-06

6.54

10.14

0 2 0 0 1 -0 2

2 0 0 2 -0 3

2 0 0 3 -0 4

2 0 0 4 -0 5 E 2 0 0 5 -0 6 E

Stagnant or Declining Acreage and Production Note : From 2001-02 to 2005-2006 Area in ‘Lakh Hectares; Production in ‘Lakh Tonnes. Source : Spices Board, Ministry of Commerce & Industry & Ministry of Agriculture, Govt. of India.

Chilli Major Producers World Wide

SRI LANKA

PESTLE ANALYSIS Political : Prime Minister: Ratnasiri Wickramanayake GDP :- : $40.7 billion. GDP per capita :- $1400 Government :- : Republic. Population:- 20.2 million. Capital:-Colombo (pop. est. 1.3 million urban area).

Economic  

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Annual growth rate: 6%. Natural resources: Limestone, graphite, mineral sands, gems, and phosphate. Agriculture (12% of GDP): Major products--rice, tea, rubber, coconut, and spices. Services (60% of GDP): Major types--tourism, wholesale and retail trade, transport, telecom, financial services. Industry (28% of GDP): Major types--garments and leather goods, rubber products, food processing, chemicals, refined petroleum, gems and jewelry, nonmetallic mineral-based products, and construction

Social 

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The Democratic Socialist Republic of Sri Lanka (formerly known as Ceylon) is an island in the Indian Ocean about 28 kilometers (18 mi.) off the southeastern coast of India with a population of about 20 million. Density is highest in the southwest where Colombo, the country's main port and industrial center, is located. The net population growth is about 1.1%. Sri Lanka is ethnically, linguistically, and religiously diverse. Sinhalese make up 74% of the population and are concentrated in the densely populated southwest. Sri Lankan Tamils, citizens whose South Indian ancestors have lived on the island for centuries, total about 12%, live throughout the country, and predominate in the Northern Province.

Export Scenario Exports Share of Chilli in Indian spices export is around 20-40% in volumes India export its chilli mainly to Srilanka, Bangladesh, Korea, Malaysia, Singapore, Japan, UK, , and USA

S h a r e o f m a jo r ite m s in In d ia n s p ic e s e xp o rt(Q ty)

B ang la d e sh 13% O the rs 28%

M a la ysia 6% Nepal 3%

Usa 26%

S ri L a nka 24%

O th e r S p ic e s O th e r s e e d s 6 % 11% G in g e r 3% C u rry p o w d e r 2%

C h illi 42%

C o ria n d e r 1 0 % C u mPine p p e r M in t p ro d u c t 4 % 4 % T u rm e ric 2% 1 3 %o ils & o le o r e s in 3%

Chilli- Major Consumers Worldwide

Country wise Percentage share of exports Mexico 9%

• India (26%) • China (26%) • Spain (18%)

India 26% Spain 18%

• Mexico (9%) • Pakistan (8%) • Morocco (8%) • Turkey (5%)

Turkey 5% Morocco 8% Pakistan 8%

China 26%

Rising Difference Between Production & Consumption of Chillis

Producers Price Movement of Leading Exporting Nations of Dry Chilli Pepper

Chilli- World Exports Share

Chilli World Imports Share

Statewise Production – Share trend of CHillis in India

Gantur Monthly (average) price movemant of Chillis in six year period 2002 -03 to 2007-08 (Up to Jan 2008)

Gantur: Price trend of chillies form April 2002 to January 2008

Area and production of major spices in India, 20002006

Statewise area and production of chilli in Inida, 2000-2006

EXPORTS OF SPICES FROM INDIA 

can now boast as the monopoly supplier of spice oils and oleoresins the world over. In the case of curry powders, spice powders, spice mixtures and spices in consumer packs, India is in a formidable position. The consistent effort of the Board during the last one decade has improved the share of the value added products in the export basket to 60% India

Distribution channels for spices and herbs:

Brokers/Agents .

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Traders/importers.

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Grinders/processors.

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End s.

CHALLENGES:

Market access requirements.

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Legislative requirements.

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Non-legislative requirements.

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Packaging, marking and labelling.

EXPORT

Futures Contract Specifications Type of contract

Futures Contract Specifications

Name of commodity

Chilli

Ticker symbol

CHLL334GTR

Trading system

NCDEX Trading System

Basis

Chilli (Paala) traded as LCA 334 ex warehouse Guntur inclusive of all taxes and Market Cess

Unit of trading

5 MT

Delivery unit

5 MT

Quotation/ Base value

Rs. per Quintal

Tick size

Re. 1

Quality specification

LCA 334 Colour - Bright Red Length a) Not less than 5 cms b) Chillies less than 5 cms will be allowed to a maximum of 5% by weight Moisture should not be more than 12.5*% Foreign matter should not be more than 2% Broken Chillies should not be more than 7%* Loose seeds should not be more than 2% Damaged and discolored pods - Basis 6%* Acceptable up to 7% with 1:1 discount Pods without stalks should not be more than 8%*

*Tolerance up to 0.5% of the above limits only in the outbound deliveries will be allowed Also Deliverable

Guntur Sannam with a of Rs. 150 per Quintal

Quantity variation

+/- 2%

Delivery center

Guntur (up to the radius of 50 Kms from the municipal limits)

Additional delivery centre

Warangal (up to the radius of 50 Kms from the municipal limits) Location /Discount as notified by the Exchange from time to time.

Due date/Expiry date

20th day of the delivery month

If 20th happens to be a holiday, a Saturday or a Sunday then the due date shall be the immediately preceding trading day (other than a Saturday) of the Exchange Delivery specification

Upon expiry of the contract all outstanding positions will result in delivery. The penalty structure for failure to meet delivery obligations will be as per circular no. NCDEX/TRADING-091/2007/235 dated October 4, 2007.

Delivery Logic

Compulsory Delivery

Opening of contracts

Trading in any contract month will open on the 10th day of the month. If 10th happens to be a non-trading day, contracts would open on the next trading day

Closing of contract

On the expiry of the contract, all the outstanding position would have to be settled by physical delivery

No. of active contracts

As per Annexure A

Daily price fluctuation limit

Daily price limit will be 2%. If the price touches 2%, trading will continue with 2% limit for the 15 minutes period from the time 2% limit was reached. Thereafter, price limit would be extended by another (+)/ (-) 2%. No trade would be permitted during the day beyond the price limit of (+)/(-)4% from the previous day's closing price

Position limits

Member: Maximum of 4,500 MT for all contracts or 15% of market open position whichever is higher. Client: Maximum of 1,500 MT for all contracts

The above limits will not apply to bona fide hedgers. For bona fide hedgers, the Exchange will, on a case to case basis, decide the hedge limits. Please refer to Circular No. NCDEX/TRADING-100/2005/219 dated October 20,2005.

For near month contracts: The following limits would be applicable from 28 days prior to expiry date of a contract

Member: Maximum of 1,500 MT Client: Maximum of 500 MT Special margins

Special margin of 5% of the value of the contract will be levied whenever the rise or fall in price exceeds 20% of the 90-day prior settlement price. The margin will be payable by the buyer or the seller depending on whether price rises or falls respectively. The margins shall remain in force so long as the price stays beyond the 20% limit and will be withdrawn as soon as the price is within the 20% band.

Trading System        

Minimum 2 & Maximum 12 Contracts. Presently running 3 alternet month contracts. Total open intrest 6375 MT (All Months). Total demated sotck 900 MT Total margin 6.22% of contract value. Current price 5122 quintal. Tick size .10 paisa. In 1 rs movement 50rs +/- .

Thank you