CHILLI EXPORT TO SRI LANKA

VINOD PRAJAPAT (63)

DATE:12/10/2009
Introduction
 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.
 India accounts 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
 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 between600-
1250mm.
 Arrival start from January and extend till May. The peak arrival
period is from February till April.
Indian Scenario
 Chillies are cultivated mainly in the states
of Andhra
Pradesh,Orissa,Maharashtra,West
Bengal,Karnataka,rajasthan and
Tamilnadu.Andhra Pradesh is the
foremost accounting 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
 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.,Germany,France and
U.S.A.
 Major Trading Centers in India
States Trading Centers
Andhra Guntur,warangal,Hyderabad,Gudda-
Pradesh pah,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% Karnataka
8% MP
Maharashtra
2% Orissa
UP
9% 19%
12% 5% TN
Others
 Acreage and Production
Acreage and Production
Year Area Production 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
2001-02 8.80 10.69 A re a
10 P r o d u c tio n
8
2002-03 8.28 8.96
6

4
2003-04 7.74 12.35
2

2004-05 7.37 11.85 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

2005-06 6.54 10.14

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
 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, non-
metallic mineral-based products, and construction
 Social
 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, Germany, France 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 th e r S p ic e s
O th e r s e e d s 6 % C h illi
O the rs M a la ysia 11% 42%
28% 6% G in g e r
3%
C u rry p o w d e r
Nepal 2%
3% 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%
Usa S ri L a nka
26% 24%
Chilli- Major Consumers Worldwide
Country wise Percentage share of exports

Mexico
9%
• India (26%)
India
• China (26%) 26%
Spain
• Spain (18%) 18%

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

• Turkey (5%) Morocco

8% China
Pakistan 26%
8%
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, 2000-
2006
Statewise area and production of chilli in Inida,
2000-2006
EXPORTS OF SPICES FROM INDIA
 Indiacan 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%
Distribution channels for spices
and herbs:-
 Brokers/Agents .

 Traders/importers.

 Grinders/processors.

 End users.
CHALLENGES:-
 Market access requirements.

 Legislative requirements.

 Non-legislative requirements.

 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 premium 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 Premium/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