EXPORT OF CHILLI FROM INDIA: STATUS AND PROSPECTS

Sebin Sara Solomon* and Dr S.C. Nagpure**

Chilli (Capsicum annuum L.) is one of the important commercial crops of

India and it’s widely used as a universal spice. India is the largest producer and
contributes 35 per cent of total world production. It is also the largest consumer and
exporter of chilli. Chilli is the major spice contributing 40-42 per cent by volume and
20-22 per cent by value of total spices exported from India. India has immense
potential to grow and export different type of chilli required by various markets
around the world.
. In view of importance of export trade of chillies, such a study was made to
know the status and prospects of Chilli with the following specific objectives.
1) To estimate the growth in area, production, productivity of Chilli in India.
2) To study the performance of Export and Import of Chilli in India.
3) To study the competitiveness of Chilli in India.
The data collected from Secondary sources was subjected to appropriate
analytical techniques in order to arrive at a meaningful conclusion. The different
analytical techniques used in the study were Growth rate analysis, Instability analysis
and Nominal Protection Coefficient
Summary of findings
Area under Chilli in world has increased considerably during the study period
with a percentage increase of 21.99. Country-wise analysis of chilli cultivation
showed that India is the largest cultivator with 35 per cent of the world area under
chilli cultivation. There is also increase in the world production and productivity. The
percentage increase in production and productivity accounts to be 93.33 (%) and
57.66 (%) respectively. India is the major country which accounts for world’s dry
chilli production (40%) followed by China (8%). There was considerable increase in
the world’s productivity of chilli from 1010 kg/ha in 1980 to 1593 kg/ha in 2010.
India’s productivity (1831 kg/ha) is comparable with world’s productivity, but not
with other countries like Morocco (16,367 kg/ha), China (6115 kg/ha). World’s
increase in production of chilli is due to increase in productivity rather than increase
in area.
 The growth analysis of area, production and productivity of chilli in India for
the pre-WTO, post-WTO and the overall period showed a positive but non-significant
trend (0.66%) in area during the pre-WTO period and negative and significant trend
(-1.61%) during the post-WTO period. For the overall period the growth rate was
found to be negative and non-significant (0.25%). There is significant and positive
growth in production and productivity for the entire study period.
Analysis on the share of agricultural exports to the total value of India’s export
showed that even though there is increase of agricultural exports in monetary terms,
the percentage share is decreasing. There is increase in share of chilli export to the
total spice export which was 8.3 per cent during 1980-81 and now stood at 40.5 per
cent in 2009.
There is increase in export of chilli both in quantity and value in the world.
India (38%) forms the bulk of the world’s trade volume followed by China (23 %)
and Spain (10%). Analysis of country-wise export of chilli from India showed that
there is positive change in the trade volume and value. Malaysia is the major
destination of Indian chilli with 25 per cent of the total export. The percentage change
in trade over the base period was more observed in Malaysia (250 times) followed by
Sri Lanka (65 times) and USA (20 times).
The growth rate of chilli export from India in quantity, value and unit value is
found to be positive and significant for the pre-WTO, post-WTO and overall period.
The instability analysis of chilli export in India showed more stability during the post-
WTO period than the pre-WTO period. The analysis of chilli import in India showed
negative and non-significant growth trend with wide instability during the pre-WTO
period. However, the growth rate is positive and significant during the post-WTO
period and is more stable compared to pre-WTO period.

The NPC values of Chilli crop showed that the crop was more protected
during the pre-WTO period with average NPC value as 0.97 and NPC value for the
post-WTO period was 0.82 which indicates moderate export competitiveness.
Conclusion

 World area, production and productivity has increased during the period of study
and increase in world production is mainly due to increase in productivity rather
than increase in area.
 The growth rate of chilli area in India was found to be insignificant during the pre-
WTO period and negative and insignificant during the post-WTO period. The
growth rate in production and productivity was positive and significant throughout
the study period. Chilli being a seasonal crop the reduction in area was observed
in subsequent years after there was fall in prices indicating farmers would have
shifted the area for more profitable crop.
 The growth rate of Chilli Export in India in quality and Value was found to be
positive and significant for the pre- and post- WTO and also for the overall period.
The instability analysis of Chilli export in India showed more stability during the
post-WTO period than the pre-WTO period.
 The analysis of Chilli import in India showed negative and non- significant
growth trend during the pre-WTO period with wide instability. During the post-
WTO period growth rate was positive and significant both in quantity and value.
The instability analysis shows that greater instability was observed during the pre-
WTO period than the post-WTO period. For the overall period growth trend was
found to be positive and significant at both in quantity and in value. Wider
instability might be observed due to greater instability during the pre-WTO
period.

 The NPC values of Chilli crop showed that the crop was more protected during
the pre-WTO period with average NPC value as 0.97 and NPC value for the post-
WTO period was 0.82 which indicates moderate export competitiveness.

* Teaching assistant, Dept. of Agricultural Economics, College Of Horticulture, Thrissur

**Assistant Professor, Dept. of Agricultural Economics and Statistics, PGI, Dr PDKV, Akola