Monday, 30 November, 2020
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Large Cardamom Exports Problems and Possibilities



large-cardamom-exports-problems-and-possibilities

Shankar Man Singh

 

The Federation of Large Cardamom Entrepreneurs of Nepal has recently submitted a memorandum to the Government of Nepal regarding the adjustment of the large cardamom export invoice that is used for exporting the products to India.
According to the Federation of Nepalese Large Cardamom Entrepreneurs, large cardamom, also known as black cardamom, was sold at Rs. Rs 800 to Rs 1,200 per kg. The Nepali side has raised the demand for a price adjustment after the price dropped from to Rs 380 from Rs 400.
 Nepal's agricultural system has undergone a marked change in recent years. The key motivator for this change has been the market for some consumer products.
The choice of market for agricultural products and the choice of the farming system seem to be determined by the demand for consumer products in urban areas and abroad. Any increase in the income level of the city dwellers with better transport facilities has provided innumerable opportunities to the producers.

Promising Results
As a result, subsistence-operated small farms are now being transformed into business entities with market demand and supply mechanisms. In the past, it was believed that investing large sums of money in agricultural development in remote areas was not fair and rewarding for investment, but this logical view has now changed significantly.
Efforts made in the agricultural sector over the past four decades have begun to yield promising results even in remote areas. Farmers are producing very high-value cash crops for the domestic or international market.
Recalling the past, large cardamom has been cultivated in Sikkim since time immemorial. It is a native crop of Sikkim and from here it has spread to neighbouring countries and regions, such as Darjeeling, North-East India, Bhutan, and even Nepal.
Large cardamom is a perennial herb that contains underground rhizomes that give rise to many leaves and buds. Often the height of the plant is between 1.8 and 2 meters. The number of leaf tips or pseudostems is usually cylindrical and green or red depending on the variety. A healthy clamp is about 20-55 pseudo stems becoming vertical or slightly slanted.
In developing countries like Nepal, cash crop production potential and promotion are often done through the availability of sufficient capital, level of agricultural technology, marketing facilities, and cash crop business by governmental and non-governmental organizations (NGOs) and their involvement and active participation.
 
Cash Crops
In the last fiscal year (2076-077), large cardamom has been exported the most from Mechi Customs Office, Kankarvitta. According to the statistics, large cardamom worth Rs 3.90 billion was exported from Mechi customs. Last year, large cardamom worth Rs 3.82 billion was exported. Nepal exported large cardamom worth 4 billion rupees in 2019/20. Entrepreneurs say some large cardamom is yet to be exported this year due to the Corona epidemic.
In order to implement the goals envisaged in the national development plans and programs, all developing countries need to increase cash crop exports to earn foreign exchange. The Nepali cash crop entrepreneurs are unable to export in large numbers to foreign markets due to the high cost of production, inadequate storage facilities, tariff constraints, transportation constraints, and lack of knowledge from actual production to the export market.
Agricultural commodities are a major part of total exports from Nepal. Major agricultural exports of Nepal are, ginger, oilseeds such as sunflower, Niger seeds, tobacco, vegetable seeds, Orthodox tea, large cardamom, spices, fruits, and vegetables, etc.
Internal demand of food for growing population is increasing on both sides, more agricultural commodities available for export are declining as production has not kept pace with population growth.
Large Cardamom Export
Large cardamom is marketed inside and outside Shankhuwasabha district and Ilam. Smaller producers usually sell their products to local collectors instead of collectors hired by wholesalers and retail sellers. These people are usually locals and are involved in other businesses but also in the Large cardamom business in the middle of the season.
Large cardamom is exported to India and then to other countries. So there are huge possibilities and opportunities to be exploited by price related. Large cardamom occupies an important place in Nepal's foreign export trade.
The eastern part of Nepal is a major large cardamom-producing region. Sankhuwashabha, Ilam, Panchthar, Dhankutta, and Bhojpur are the major districts for large cardamom production. Ilam accounts for a significant share of the total crops produced in these areas. However, the production of some diseases has declined sharply in recent years.
Large cardamom production is increasing year by year and it will increase the export growth. India is the world's leading producer and exporter of Large cardamom, followed by Guatemala, Sri Lanka, and Tanzania. Large cardamom from Nepal and Papua New Guinea has started appearing in the world market. Major suppliers of large cardamom Nepal, India, Bhutan, Indonesia also supply wild big cardamom, which looks like Nepali big large cardamom.
At present, large cardamom from Nepal goes all over India from where it is re-exported to other countries. It is no exaggeration to say that the future importing countries for Nepali large cardamom are: Bangladesh, Pakistan, Qatar, and Saudi Arabia. International trade in large cardamom imports focuses on some countries, such as Saudi Arabia, Kuwait, Bahrain, and other Gulf states in the Middle East, and the Nordic countries in Europe.
Saudi Arabia is the world's large importer of large cardamom. The major market for large cardamom is Singapore. But Singapore is not a real consumer market, it is just an import. Islamic countries are the major consumer markets for large cardamom, with Pakistan being the large st consumer and Singapore being the major supplier of Large cardamom to Pakistan.
Russia and West Germany have emerged as important importers of large cardamom in recent years. The United States and West Germany could be potential markets for Large cardamom. There are other existing and potential markets for large cardamom: the European Union.
Accurate world statistics, especially large cardamom imports, are difficult to obtain as official trade data often classify large cardamom with other unrelated prices, such as nutmeg. However, it is estimated that the average world import of this spice is increasing every year.
The market for Nepali Large cardamom is very limited. Although the Trade and Export Promotion Center has done some diversification in the last few years, the major part of this product is being exported to India.
Against this background, a special urgent need is to control the internal market price of this spice. It is also suggested that there should be a government agency to look into the market for large cardamom from production. As Nepali Large cardamom is a limited market, Nepal should explore other potential international markets as well.
    
Exploring Markets
In addition, it is necessary to study the changing consumer behaviour in Qatar, Saudi Arabia, Kuwait, and other Gulf countries regularly. The potential of large cardamom flavours in the Nordic market should be explored.

(Singh Is former CEO at NEPSE and SEZ)

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