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June 21, 2012

THE SCOPE OF CHILLI OF PAKISTAN IN BLOBAL MARKETS

Table of Contents
Scope of Chilli of Pakis tan in global markets ................................................................ 2 His tory ...................................................................................................................................................... 2 Intr oduc tion .......................................................................................................................................... 2 Potentia l e xpor t ma rkets or impor ter c ountr ies of c hilli in the wor ld ............. 4 The ma jor chilli pr oduc ing Nations or Compe titors of Chilli .............................. 4 The exports of chilli of countries in the world ............................................................................... 6 Marke t Inf lue nc ing Fac tors ......................................................................................................... 6 The ma jor area s where c hilli is cultiva ted in Pakis ta n ............................................. 6 Current produc tion of chilli in pa kis ta n ............................................................................. 7 Potentia l e xpor t ma rkets f or chilli of Pakistan .............................................................. 8 Brands of chilli of Pakis tan ........................................................................................................ 8 Current e xpor ts of chilli of Pakis ta n .................................................................................... 9 Proble ms of Expor t of Chilli f or Pa kis tan ....................................................................... 10 Sugges tions a nd re comme nda tions ....................................................................................... 11

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THE SCOPE OF CHILLI OF PAKISTAN IN BLOBAL MARKETS

Scope of Chilli of Pakistan in global markets


History
Chillies 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 A merica, 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 s ome 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 Por tuguese 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 shift ed to Asia. In todays 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 th e family of Solanaceae, which also include tomato and potato. These fruits are small in size and are known for their sharp acidic flavor and color.

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THE SCOPE OF CHILLI OF PAKISTAN IN BLOBAL MARKETS

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 cu ltivars grow well in areas where the average temperature is 30C 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 r educing 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 Cayenn e 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. It is also used in homeopathy. A no n-conventional use of chilli is in the self-defence sprays which are gaining popularity in the US.
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THE SCOPE OF CHILLI OF PAKISTAN IN BLOBAL MARKETS

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. 2. 3. 4. 5. 6.

United Arab Emirates European Union Sri Lanka Malaysia Japan Korea

The major chilli producing Nations or Competitors of Chilli


As chilli is a s impler crop to cultiva te , it is pr oduced a ll over the wor ld. The wor ld pr oduc tion leve l has been on a n increas ing tre nd and there has been a s ignif icant r ise in the produc tion le ve l s ince the la te 1990s . I t has reached ar ound 7 million tons now from the f igur e of 2.5 million tons in the las t decade. The ma jor c hilli pr oducing na tions are
1. 2. 3. 4. 5. 6.

India (Asia) China (Asia) Indonesia (Asia) Korea (Asia) Pakistan (Asia) Turkey (Asia)
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Sri Lanka (Asia) 8 . Nigeria (Africa) 9 . Ghana (Africa) 1 0 . Tunisia (Africa) 1 1 . Egypt (Africa) 1 2 . Mexico (North America) 1 3 . United States of America (North America) 1 4 . Yugoslavia (Europe) 1 5 . Spain (Europe) 1 6 . Romania (Europe) 1 7 . Bulgaria (Europe) 1 8 . Italy (Europe) 1 9 . Hungary (Europe) 2 0 . Argentina (South America) 2 1 . Peru (South America) 2 2 . Brazil (South America)
7.

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 consum ption. 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 t he presence of aflatoxin (Pakistan Horticulture Development and Export Board (PHDEB). Its production fulfills 88 percent of the countrys requirement. Chili not only meets domestic consumption but also helps in earning foreign exchange. The potential for i ncreasing 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 1. 2. 3. 4. 5. 6. 7. India.. (25%) China (24%) Spain .. (17%) Mexico (8%) Pakistan.(7.2%) Morocco.. (7%) Turkey. (4.5%) 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 bla ck pepper in the world trade.

Market Influencing Factors


1. 2. 3. 4. Seasonal price fluctuations Overall production in the country World demand Stock available in cold storages a. Hedging among the various varieties of chilli

The major areas where chilli is cultivated i n Pakistan


1. Kunr i, a sma ll town of Umer Kot dis tr ic t is the home of Red Chillie s 2. MirpurKhas about 82% of chilli is pr oduce d in Sindh 3. 18% of chilli is produced in re st of the province s of Pa kis tan Domes tic pr oduction a nd ec onomic value: Chillies are gr own on an area of 38.4 thousand hectar es with produc tion of 90.4 thousa nd tones , with an

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average yield of 1.7 tons per hec tare with 1.5 per cent s hare in the GDP. Sindh is the ma jor producer of chillie s followe d by Punja b a nd Ba loc his tan. Pakis tan e arned Rs 1.127 billion dur ing 2003 -2004 by e xpor ting red c hilli powder, wher eas , e xpor t earnings from a ll fr uits wer e Rs5.912 billion dur ing the s ame pe riod. This revea ls the potentia l of this non -staple cr op . Despite its impor ta nce the yie ld has declined from 86.5 ( 1994 -95) to 55.8 thousa nd tons ( 2003 -04) (Figure 1) . This dec line in yield is due to a number of fac tors including poor qua lity se ed, mal -cultur al pra ctices and dis eases like vir use s, collar rot a n d phytophthora root r ot.

Current production of chilli in pakistan

2010-2011 produc t Area (000 hectares ) Productio n (000 tons)

2011 -2012(p) Area (000 hectares ) Productio n (000 tons)

%Change In productio n

chilli

63.6

171.7

21.8

37.2

-78.3

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Potential export markets for chilli of Pakista n


1. 2. 3. 4. 5. 6. 7. Gulf States The United State Canada Sri Lanka The UK Singapore 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 Aflatoxi n; 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. 2. 3. 4. 5. 6. 7. 8. fresh chillies stalk less chillies green chilies chilli powder Oleoresin. Maxi Desi Nageena.
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Current exports of chilli of Pakistan

2004 US $ Mil

2005 US $Mil

2006 US $ Mil

2007 US $ Mil

2008 US $ Mil

3.8

8.1

4.7

4.96

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Export of re d dr ied chillies from Pakis tan has dec lined fr om Rs1.127 billion (dur ing 2003 -2004) to Rs 846 million af ter European Union food author ities ha ve de tec te d the presence of aflatoxin ( Pakis ta n Hor tic ulture De ve lopment and Expor t Board (PHDEB) .

The potentia l for increasing e xpor ts of whole , powder and crus hed c hillie s in consumer packs is ver y high, provide d we me et the s tr ingent qua lity require ments of impor ting countr ies by preve nting contamina tion from e xterna l sources dur ing harves ting, pos t harves t ha ndling, process ing a nd s tora ge. This ca n be achieved only through an inte gra ted a pproa c h with the c ollec tive effor ts of far mer s , proc essors a nd tra ders

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 for export. 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 to

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overcome on the problem. The old storage system cause fungus in the chilies, as chilies stored in open air 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 storage, to extend production season of the crop for about two to three months is evolved. It will also help farmers have early crop, which will benefit them by giving more returns 8. The government should make research institutions for

Suggestions and recommendations


There are various s ugges tions and if The government of Pakistan should take re media l ste ps on tha t s ugge stions the The agr ic ulture produc t chilli can bec ome a rea so na ble s ource of fore ign ea rnings . In this way the GDP of Pa kis tan incr ease

1. The government should consider about 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 for export. 2. There is need to produce chilli which will have more adaption than the exotic (Imported) ones. 3. F1 hybrid production should be used which causes both fresh and powdered chilies can be increased manifold. 4. The modern equipment and techniques should be used
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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 to overcome on the problem. The old storage system cause fungus in the chilies, as chilies stored in open air for many days while the fungus takes three days to infect the crop. 5. There should be provided subsidy to the farmers to purchase all inputs and the availability of high quality seed of high yielding varieties. 6. The Off-season production technology should be used to external sources during harvesting, post -harvest handling, processing and storage, to extend production season of the crop for about two to three months is evolved. It will also help farmers have early crop, which will benefit them by giving more returns 7. The government should make research for new varies of chilli having more vetamins. 8. The government should develop a better way for water uses because this product is grown in better way.

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