GROWTH AND INSTABILITY IN PEPPER PRODUCTION AND...

95

CHAPTER - V

GROWTH AND INSTABILITY IN PEPPER PRODUCTION AND

EXPORT

Indian spices products have come to occupy a supreme position in the global

market over the years. Today, India is a major supplier of several spices especially

pepper. Pepper is an important crop of India which plays a dominant role in the

country’s economy by meeting the domestic and export demands. It contributes

significantly to both agriculture and industry in terms of firm income, employment

and export earnings, India, despite second largest producer of pepper in the world, has

not exploited its potential to emerge as a major player in the world pepper. The Indian

economy in itself has undergone a rapid transformation after the inception of

economic reforms in 1991. India’s ratification of Agreement on Agriculture (AoA)

with WTO also had a major impact leading to redefining of its pepper trade. During

this time span various pepper products exported from India have responded

differently and their level of competitive advantages in the global markets have

altered significantly. In this chapter, to find the growth and stability in pepper

production and export were analysed using mean, compounded annual growth rate

and instability index.

Foreign Trade performance of India

Every nation is looking for achieving more and more export volume with the

purpose of maintaining a favourable balance of trade and payment and also for

maintaining the exchange rate in parity with other world economies.

For India, foreign trade is important to its economy as it largely contributes to

its GDP. Moreover, the process of growth which began in the mid-1990s which has

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

96

gained momentum in the 1990s was considered to be significant for world economy

and world trade. Because, globalization helps in expanding the markets for grids,

services, labor and capital beyond national boundaries. Moreover, the GATT accord

of 1994 was also expected to have an impact on five major areas viz agriculture,

textile, pharmaceutical, services & intellectual property rights. In this background,

India exported large number of products such as Sugar, Tea, Readymade garments

products, Fruits/ vegetable seeds and cotton etc and imported the products such as

capital goods, raw materials and oil, though exports are the major focus of India’s

trade policy. To assess the trend in India’s Balance of Trade since1990-91, the Table

5.1 is presented.


97

Table: 5.1 Exports, Imports, and Balance of Trade of India

(Value in Rs million)

Year Total Exports Total Imports Trade Balance

1990-91 325580 420950 -95370

1991-92 440420 478410 -37990

1992-93 536880 633750 -96870

1993-94 697490 731770 -34280

1994-95 826730 899710 -72980

1995-96 1063520 1226780 -163260

1996-97 1188170 1389200 -201030

1997-98 1301010 1541760 -240750

1998-99 1397520 1783320 -385800

1999-00 1590950 2155290 -564340

2000-01 2013560 2283070 -269510

2001-02 2090180 2452000 -361820

2002-03 2551370 2972060 -420690

2003-04 2933670 3591080 -657410

2004-05 3753400 5010650 -1257250

2005-06 4564180 6604090 -2039910

2006-07 5717790 8380480 -2662690

2007-08 6558640 10051590 -3492950

2008-09 8407550 13744360 -5336810

2009-10 8451250 13564690 -5113440

CAGR (%) 17.82 19.93

Instability Index 4.00 5.13

Source: Economic Intelligent Service from Centre for Monitoring Industrial Economy


98

It is evident from the table that India’s exports had increased from Rs 325580

million in 1990-91 to Rs 8451250 million i.e more than 25 fold whereas India’s

imports had increased from Rs 420950 million in 1990-91 to Rs 13564690 million i.e

more than 32 fold. Though the total exports and total imports of India were showing

an uptrend during the 20 years period, it caused persistent trade deficit in rupee terms

from Rs 95370 million in 1990-91 to Rs 5113440 million in 2009-10 as imports grew

faster than exports.

In other words, the merchandise export of India is growing at a compounded

annual growth rate of 17.82 per cent with instability index value of 4.00 and the

merchandise import at a compounded annual growth rate of 19.93 per cent with an

instability index value of 5.13. Hence, India has much to improve to maintain a

comfortable balance of trade, which is possible only by concentrating on those areas

where it can excel. India’s total exports and imports for the review period is

pictorially shown in Chart 5.1.


99

Chart 5.1 India’s Total Exports and Imports

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

16000000

Val

ue

(in

Rs

mill

ion

)

Year

Total Exports

Total Imports


100

India's Exports of Agricultural and Allied Products

Agricultural exports play a key role in the process of economic growth of

developing countries, especially India. India is a major supplier of several agricultural

commodities to the international market. The major agricultural products which are

exported from India are Basmati rice, Cashew, Coffee, Fruits/ vegetable seeds,

Groundnuts, Marine, Oil meals particularly spices. The annual exports of agricultural

and allied products and share of spices in total agricultural and allied exports for the

study period are presented in Table 5.2.


101

Table: 5.2 Share of India's Spices Exports in India’s Agricultural & Allied

Products Exports

(Value in $ million)

Year

India's exports of

agricultural & allied

products

India's exports of

spices

Share of Spices export in

agricultural & allied

products exports (%)

1990-91 3119.30 132.53 4.25

1991-92 3219.30 152.08 4.72

1992-93 2949.64 127.78 4.33

1993-94 4023.10 181.18 4.50

1994-95 4227.28 195.04 4.61

1995-96 6120.01 237.58 3.88

1996-97 6868.50 338.92 4.93

1997-98 6634.20 379.76 5.72

1998-99 6033.11 387.96 6.43

1999-00 5614.87 408.37 7.27

2000-01 5982.94 354.69 5.93

2001-02 5918.82 314.82 5.32

2002-03 6723.26 342.75 5.10

2003-04 7538.27 336.28 4.46

2004-05 8471.21 418.95 4.95

2005-06 10212.30 477.86 4.68

2006-07 12674.92 697.42 5.50

2007-08 18441.61 1072.30 5.81

2008-09 17562.92 1380.30 7.86

2009-10 17755.93 1299.50 7.32

Mean 8004.57 461.80

SD 4873.87 368.85

CV (%) 60.89 79.87

Source: Economic Intelligent Service from Centre for Monitoring Industrial Economy


102

As could be seen in the table, the exports of agricultural and allied products

from India was increasing from $ 311.30 million in 1990-91 to $ 6868.50 million in

1996-97 (with an exception in 1992-93) and it started declining thereafter till 2001-02

which may be due to the first Asian crises pressure faced by India during 1997-98.

Similarly, the agricultural and allied products export of India started declining from

2008-09 onwards (after 6 years increase) which may be due to the impact of US

financial crisis face by the country during the period of 2007 and 2008. However, the

export of agricultural and allied products from India increased more than fivefold with

the mean value of $ 8004.57 million and a standard deviation of $ 4873.87 million.

The spices export also increased by almost tenfold from $ 132.53 million in

1990-91to $ 1299.5 million in 2009-10, of course, with inter year variation. However,

the increase in the share of spices export in India’s agricultural and allied export, from

4.25 per cent in 1990-91 to 7.32 per cent in 2009-10, showed the significant and

increasing share of spices in the export of agricultural products from India. The CV

for total agricultural export as 60.89 per cent and that for spices as 79.87 per cent

revealed that there was wide inter year variations in spices export. Share of India’s

Spices Export in India’s Agricultural & Allied Products Export results are clearly

depicted in Chart 5.2.


103

Chart 5.2 Share of India’s Spices Export in India’s Agricultural & Allied Products Export

0

1

2

3

4

5

6

7

8

(%)

Year


104

Major Item of Spices Export

India is the largest producer, consumer and exporter of spices in the world

with a share of about 35 per cent of world production in 1999. Out of 53 spices

cultivated in India, only 16 are considered of commercial importance. Out of 16, only

eight are considered as main or basic spices as they account for more than 94 per cent

of all India’s spice production. They are chilli, coriander, turmeric, cumin, garlic,

fenugreek, ginger and pepper.

The Spices Board review says that the spices exports by value have set records

during 2011-12 by crossing $ 2 billion for the first time. The major products of spices

exported from India include pepper, chilli, turmeric, spices oil and oleoresins, and

mint oil. It shows that spice products are exported both in bulk form and value added

form such as spice oils and oleoresins, mint products (include mint oil, menthol and

menthol crystal) curry powder etc. Table.5.3. shows the breakup of spice products

export (by value) with CV and CAGR for the period 2000-01 to 2009-10. With the

changing food habits, increasing demand and rising purchase value of consumers, the

consumption of value added spices is set to increase.


105

Table: 5.3 Major Item of Spices Export (2000-01to 2009-10)


Product/

Year

Turmeric Pepper Spice oils &

oleoresin Cardamom Chillies Coriander

(Value) (%) (Value) (%) (Value) (%) (Value) (%) (Value) (%) (Value) (%)

2000-01 1155.76 6.30 3808.16 20.77 3937.13 21.47 1091.93 5.96 2297.33 12.53 373.64 2.04

2001-02 907.37 4.68 2036.88 10.50 3731.11 19.23 855.95 4.41 2524.40 13.01 483.39 2.49

2002-03 1033.80 4.95 1788.80 8.57 3909.42 18.73 676.45 3.24 3151.47 15.10 556.46 2.67

2003-04 1311.17 6.88 1427.70 7.49 3799.18 19.94 492.62 2.59 3668.78 19.26 720.10 3.78

2004-05 1562.50 6.65 1217.11 5.18 4693.08 19.97 349.23 1.49 4990.29 21.23 820.91 3.49

2005-06 1528.60 5.82 1509.48 5.74 5055.73 19.24 383.68 1.46 4030.05 15.34 677.07 2.58

2006-07 1648.00 4.61 3062.00 8.56 5107.90 14.28 393.10 1.10 8077.50 22.59 746.20 2.09

2007-08 1570.00 3.54 5195.00 11.71 5630.00 12.69 397.50 0.90 10975.00 24.74 1102.50 2.49

2008-09 2485.78 4.69 4137.35 7.81 7205.00 13.59 700.73 1.32 10809.50 20.39 2037.88 3.84

2009-10 3812.30 6.86 3139.25 5.65 7087.50 12.75 1835.88 3.30 12917.28 23.23 2258.55 4.06

Mean 1701.53

2732.17

5015.61

717.71

6344.16

977.67

SD 860.66

1347.33

1295.04

461.57

3987.49

649.93

CV (%) 50.58

49.31

25.82

64.31

62.85

66.48

CAGR (%) 14.18

-2.12

6.75

5.94

21.15

22.13

Source: Compiled from various Annual Reports of Spices Board of India


106

(Conti….)

Product/

Year

Cumin Curry powder Ginger Mint Products Other Spices Total Spice

Export (Value) (Value) (%) (Value) (%) (Value) (%) (Value) (%) (Value) (%)

2000-01 1783.53 9.73 429.96 2.34 268.21 1.46 1549.82 8.45 1639.83 8.94 18335.30

2001-02 1481.80 7.64 505.26 2.60 231.15 1.19 4847.43 24.98 1800.76 9.28 19405.50

2002-03 932.63 4.47 689.37 3.30 239.66 1.15 5655.79 27.10 2233.25 10.70 20867.10

2003-04 588.38 3.09 680.53 3.57 227.55 1.19 3943.55 20.70 2191.36 11.50 19050.90

2004-05 1152.91 4.90 669.72 2.85 598.58 2.55 5021.87 21.36 2429.02 10.33 23505.20

2005-06 981.91 3.74 783.80 2.98 429.55 1.63 8132.07 30.95 2764.25 10.52 26276.20

2006-07 2015.00 5.64 869.25 2.43 397.50 1.11 11009.50 30.79 2431.55 6.80 35757.50

2007-08 2915.00 6.57 1110.00 2.50 280.00 0.63 12805.00 28.87 2375.00 5.35 44355.00

2008-09 5440.00 10.26 1637.50 3.09 348.25 0.66 14202.50 26.80 3998.13 7.54 53002.60

2009-10 5482.45 9.86 1891.50 3.40 467.50 0.84 11897.20 21.40 4815.58 8.66 55605.00

Mean 2277.36

926.69

348.79

7906.47

2667.87

31616.03

SD 1802.18

483.13

123.40

4321.74

989.66

14550.62

CV (%) 79.13

52.14

35.38

54.66

37.10

46.02

CAGR (%) 13.29

17.89

6.37

25.42

12.72

13.12



107

As could be observed from the table that mint products ranked first as major

item with a mean export value of Rs 7906.47 million followed by chillies (mean value

of Rs 6344.16 million), spice oils & oleoresins (with mean value of Rs 5015.61

million) together contributing nearly 58 per cent to the total spices export. In absolute

terms, turmeric exports tripled from Rs 1155.76 million to Rs 3812.30 million but its

share on total spices export remained almost same around six per cent. However, the

share of pepper on total spices export had drastically come down from 20.77 per cent

in 2000-01 to 5.65 per cent in 2009-10, posed a serious concern over undertaking this

study by the researcher. Moreover, the export value of spices oils & oleoresin, curry

powder and mint products which are valued added spices had shown a steep increase

(in absolute terms) during 2000-01 to 2009-10. The product wise spice exports

(mean value) is clearly depicted in Chart 5.3.

The high Coefficient of Variation (CV) (79.13 per cent) was indicating the

inconsistency in the export of the product cumin whereas low CV (25.82 per cent)

indicating the consistency in the export of spice oils & oleoresins.

The high CAGR observed for mint products (25.42 per cent) coriander

(22.13per cent) and chillies (21.15 per cent) revealed that these products had huge

demand in the global markets. Therefore, it is concluded that there is significant

growth noticed for all products, except pepper, (with a negative annual growth rate of

2.12 per cent) which is alarming.

Share of Pepper Export in Total Exports

To understand the growing importance of spices and pepper on India’s

exports, the data for last two decades are analysed and shown in Table 5.4.


108

Chart: 5.3 Major item of Spices Export (2000-01 to 2009-10)

0

1000

2000

3000

4000

5000

6000

7000

8000

Turmeric Pepper Spice oils & oleoresin

Cardamom Chillies Coriander Cumin Curry powder

Ginger Mint oils Other Spices

Me

an V

alu

e (

in R

s m

illio

n)

Spice products

Mean Value


109

Table: 5.4 Share of Pepper in India’s Export and Spices Export

Year

India’s

Total

Export

(Rs

million)

India’s

Spices

Export

(Rs

million)

India’s

Pepper

Export

(Rs

million)

Share of

spices

Export in

India’s Total

Export (%)

Share of

Pepper

Export in

India’s Total

Export (%)

Share of

pepper

Export in

India’s Spices

Export (%)

1990-91 325580 2421.4 1024.0 0.74 0.31 42.29

1991-92 440420 3809.7 743.2 0.87 0.17 19.51

1992-93 536880 4186.4 789.4 0.78 0.15 18.86

1993-94 697490 5714.4 1891.0 0.82 0.27 33.09

1994-95 826730 6201.1 2366.4 0.75 0.29 38.16

1995-96 1063520 8044.3 1963.0 0.76 0.18 24.40

1996-97 1188170 12307.2 4123.2 1.04 0.35 33.50

1997-98 1301010 14083.1 4874.1 1.08 0.37 34.61

1998-99 1397520 16325.2 6349.1 1.17 0.45 38.89

1999-00 1590950 20436.8 8848.8 1.28 0.56 43.30

2000-01 2013560 18335.3 3808.2 0.91 0.19 20.77

2001-02 2090180 19405.5 2036.9 0.93 0.10 10.50

2002-03 2551370 20867.1 1788.8 0.82 0.07 8.57

2003-04 2933670 19050.9 1427.7 0.65 0.05 7.49

2004-05 3753400 23505.2 1217.1 0.63 0.03 5.18

2005-06 4564180 26276.2 1509.5 0.58 0.03 5.74

2006-07 5717790 35757.5 3062.0 0.63 0.05 8.56

2007-08 6558640 44355 5195.0 0.68 0.08 11.71

2008-09 8407550 53002.6 4137.4 0.63 0.05 7.81

2009-10 8451250 55605 3139.3 0.66 0.04 5.65

CAGR

(%) 17.82 15.75 4.54

Instabili

ty Index

(%)

4.00 9.11 27.22

Source: Directorate of Economics and statistics, Department of Agriculture and Co-operation, Government of India


110

The table reveals that in absolute terms, the export of both spices and pepper

had increased from 1990-91 to 2009-10 with inter year variations. The share

percentage of spices exports in India’s total export had increased from 0.74 per cent in

1990-91 to 1.28 per cent in 1999-00 and declined to 0.66 per cent in 2009-10.

Otherwise, the share of pepper exports in India’s total exports had decreased from

0.31 per cent in 1990-91 to 0.18 per cent in 1995-96 and it marginally increased to

0.56 per cent in 1999-00 but again declined to 0.04 per cent in 2009-10. The share of

pepper in India’s spices export also fell drastically from 42.29 per cent in 1990-91 to

5.65 per cent in the end of the study period was not encouraging to the exporters. The

pepper export which was boon to India in the starting period fell deeply at the end

drew attention to undertake this study.

The table also depicted the annual growth in spices export as 15.75 per cent

and pepper export as 4.54 per cent respectively during the study period. The

instability indices for spices exports and pepper exports were 9.11 per cent and

27.23 per cent respectively indicating that there was an inconsistency in the export of

pepper during the study period. Share of Pepper in India’s Export and Spices Export

(1990-91 to 2009-10) is clearly depicted in Chart 5.4.


111

Chart 5.4 Share of Pepper in India’s Export and Spices Export (1990-91 to 2009-10

0

5

10

15

20

25

30

35

40

45

50

( %

)

Share of spices Exports in Total India’s Exports

Share of Pepper Exports in Total India’s Exports

Share of pepper Exports in Total spices Exports


112

Growth in Pepper Production of India

The Growth in pepper production, area, and productivity were analysed by

taking into account the data related to 20 years from 1990-91 to 2009-10. The analysis

was made by selecting the three southern states viz Kerala, Karnataka and Tamilnadu

of India. The study would also help in identifying the leading state in acreage,

production and productivity of pepper.

Pepper Growing Area of India

Pepper is one of the most ancient crops cultivated in India. It probably

originated in the hills of South- Western India i.e from north Kanara to Kanyakumari.

In Kerala, pepper is cultivated in Idukki, Kottayam, Cannanore, Calicut and Wayanad

region. In Karnataka, Kodagu, North Kavara, South Kanara, Shimoga are major

centers of pepper production. Likewise, in Tamilnadu Kanyakumari, Nilgiris and

Maha in Pondicherry are the major centers of pepper production. In recent years,

other states like Andhra Pradesh, Orissa, West Bengal, Assam, Tripura, Meghalaya,

etc. have also started showing interest in taking up the cultivation of pepper.

According to a 1993 study by the Texas Agricultural Experiment Station, India was

ranked first in pepper acreage with 2, 23,000. To understand the trend in area under

cultivation, the major three states of India viz Kerala, Karnataka, Tamilnadu were

considered and the results are depicted in Table 5.5


113

Table: 5.5 Pepper Growing Area in Major States of India

( Area in hectares)

State/

Year

Kerala Karnataka Tamilnadu Other States Total

Area under

pepper (Area) (%) (Area) (%) (Area) (%) (Area) (%)

1990-91 168510 97.16 2890 1.67 1660 0.96 370 0.21 173430

1991-92 178130 96.70 2900 1.57 2730 1.48 440 0.24 184200

1992-93 183480 96.88 2980 1.57 2810 1.48 120 0.06 189390

1993-94 184410 96.55 3160 1.65 3000 1.57 420 0.22 190990

1994-95 186720 96.61 3080 1.59 3050 1.58 420 0.22 193270

1995-96 190840 96.37 3550 1.79 3210 1.62 430 0.22 198030

1996-97 172600 96.11 3530 1.97 3020 1.68 440 0.25 179590

1997-98 173860 95.77 3830 2.11 3400 1.87 440 0.24 181530

1998-99 182380 96.07 4390 2.31 2630 1.39 440 0.23 189840

1999-00 198410 94.63 6860 3.27 3970 1.89 430 0.21 209670

2000-01 202130 94.52 7250 3.39 4050 1.89 430 0.20 213860

2001-02 203960 93.47 9700 4.45 4110 1.88 450 0.21 218220

2000-03 208610 93.52 9900 4.44 4000 1.79 550 0.25 223060

2003-04 216440 91.93 13840 5.88 4180 1.78 970 0.41 235430

2004-05 237670 88.98 24260 9.08 4120 1.54 1060 0.40 267110

2005-06 237990 92.52 14797 5.75 3750 1.46 707 0.27 257244

2006-07 216710 91.76 15150 6.41 3700 1.57 617 0.26 236177

2007-08 176700 90.02 16000 8.15 3100 1.58 497 0.25 196297

2008-09 161341 89.10 15653 8.64 3659 2.02 421 0.23 181074

2009-10 157270 88.41 16530 9.29 3690 2.07 400 0.22 177890

Mean 191908.1 9012.5 3391.95 502.6 204815.1



114

It is seen from the table that the total pepper cultivable area of India increased

from 1.73 lakh (ha) in 1990-91 to an all time high of 2.67 lakh (ha) in 2004-05 but

declined significantly to 1.77 lakh (ha) in 2009-10 (which was almost same as in 1990-

91). Among the states, the largest pepper growing area was in Kerala (with a highest

mean value of 191908.1) but its share in total area under this crop declined from 97.16

per cent in 1990-91 to 88.41 per cent in 2009-10. In absolute terms, the area of pepper

cultivation in Karnataka had increased by nearly six fold from 2890 (ha) in 1990-91 to

16530 (ha) in 2009-10 with the mean value of 9012.5 (ha). The area of pepper

cultivation in Tamilnadu had also shown an increase from 0.96 per cent in 1990-91 to

2.07 per cent in 2009-10. However, the area under ‘other states’ like Andaman Nicobar,

Odisa, Andhra Pradesh, Maharashtra etc had increased from 370 ha (in 1990-91) to 400

ha (in 2009-10) though its share remained stable at 0.21 to 0.22 per cent on total area

during the study period. The decline in area under pepper in India might be due to the

increased cost of cultivation, and hence, farmers are showing interest to cultivate cash

crops instead of pepper, a report says. Pepper growing Area in Major States of India

(mean area) results is clearly depicted in Chart 5.5.


115

Chart: 5.5 Pepper Growing Area in Major States of India

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

Kerala

Karnataka

Tamilnadu

Others

Me

an a

rea

(in

hac

tare

)


116

Pepper Production of India

Pepper was one of the first crop that was cultivated in India as it has certain

natural comparative advantages with respect to production such as diverse agro-

climatic production environment. In cultivation, the pepper plant is normally grown

with support, either on a living tree or post made of cement or wood. In other words,

it is cultivated as intercrop. This is the reason that, in almost all the states and union

territories of India, at least one spice is grown in abundance. However, the product is

usually found in the southern and south western regions of Indian subcontinent. The

production of pepper in India and in major states are shown in Table 5.6.


117

Table: 5.6 Pepper Production in Major States of India

(Quantity in tonnes)

State/

Year

Kerala Karnataka Tamilnadu Other States Total

(Quantity) (%) (Quantity) (%) (Quantity) (%) (Quantity) (%) (Quantity)

1990-91 46800 97.60 730 1.52 350 0.73 70 0.15 47950

1991-92 50620 97.33 740 1.42 600 1.15 50 0.10 52010

1992-93 49670 97.85 750 1.48 280 0.55 60 0.12 50760

1993-94 49850 97.14 790 1.54 600 1.17 80 0.16 51320

1994-95 59260 97.56 760 1.25 640 1.05 80 0.13 60740

1995-96 59940 97.34 880 1.43 670 1.09 90 0.15 61580

1996-97 53770 97.11 870 1.57 640 1.16 90 0.16 55370

1997-98 55520 96.84 920 1.60 800 1.40 90 0.16 57330

1998-99 68510 97.65 1040 1.48 520 0.74 90 0.13 70160

1999-00 47540 94.85 1650 3.29 860 1.72 70 0.14 50120

2000-01 60930 95.70 1760 2.76 900 1.41 80 0.13 63670

2001-02 58240 94.76 2220 3.61 910 1.48 90 0.15 61460

2002-03 67360 95.41 2260 3.20 870 1.23 110 0.16 70600

2003-04 69020 92.94 3870 5.21 930 1.25 440 0.59 74260

2004-05 74980 91.52 5430 6.63 910 1.11 610 0.74 81930

2005-06 36500 73.00 12000 24.00 900 1.80 597 1.19 49997

2006-07 36550 73.10 12400 24.80 680 1.36 367 0.73 49997

2007-08 45400 90.80 3600 7.20 700 1.40 300 0.60 50000

2008-09 33523 71.71 12356 26.43 560 1.20 306 0.65 46745

2009-10 33552 71.57 12587 26.85 458 0.98 282 0.60 46879

Mean 52876.75 3880.65 688.9 197.6 57643.9



118

As seen from the table, the same trend observed in area of cultivation was

noticed in pepper production of the states and the country as a whole. Kerala ranked

first with a highest mean value of 52876.75 tonnes followed by Karnataka (3880.65

tonnes) and Tamilnadu (688.9 tonnes). In absolute terms, the production of Kerala

during the study period had gradually increased from 46800 tonnes in 1990-91 to an

all time high of 74980 tonnes in 2004-05 and the production suddenly fell down to

33552 tonnes in 2009-10. The production of Karnataka was 730 tonnes in 1990-91

and it dramatically increased to 12400 tonnes in 2006-07 and it reached to the level of

12587 tonnes in 2009-10. The Tamilnadu pepper production increased from

350 tonnes to 930 tonnes in 2003-04 but fell down in 1998-99 to 520 tonnes and to

458 tonnes in 2009-10. The overall pepper production of India had shown remarkable

increase from 47950 tonnes in 1990-91 to 81930 tonnes in 2004-05 and it slightly

decreased year by year and it stood at 46879 tonnes in 2009-10. However, the

contribution of Kerala came down from 97.60 per cent in 1990-91 to 71.57 per cent in

2009-10. To balance this, share of Karnataka had risen from 1.52 per cent in 1990-91

to 26.85 per cent in 2009-10, followed by Tamilnadu from 0.73 per cent in 1990-91 to

0.98 per cent in 2009-10 and other states from 0.15 per cent in 1990-91 to 0.60 per

cent in 2009-10.

The inference is that though Kerala retained the lead in pepper production, it

loses its share from 97.60 per cent to 71.57 per cent to total pepper production.

However, the pepper production was rising in Karnataka, Tamilnadu and other states

during the study period. It was also noticed that the production of pepper is stagnant

especially in the last two years (2008-to 2010). Pepper Production in Major States of

India (mean production) results is clearly depicted in Chart 5.6.


119

Chart:5.6 Pepper Production in Major States of India

0

10000

20000

30000

40000

50000

60000

Kerala Karnataka Tamilnadu Others

Me

an Q

uan

tity

(in

to

nn

es)

State

Mean value


120

Pepper Productivity of India

The pepper productivity varies widely in different areas due to several factors

such as soil fertility, availability of irrigation facilities, type and quality of manure,

climate, type of variety, age of vine etc. Generally in India, productivity varies from 110

kg/ ha to 355 kg/ ha (average 275 kg only) which is very low compared to the

productivity of other countries. Pepper productivity in selected southern states of India

namely Kerala, Karnataka, Tamilnadu and in others states are shown in Table 5.7.

Table: 5.7 Pepper Productivity in Major States of India

(Kg/ ha.)

Year Kerala Karnataka Tamilnadu Others Total

1990-91 278 253 211 189 276

1991-92 284 255 220 114 282

1992-93 271 252 100 500 268

1993-94 270 250 200 190 269

1994-95 317 247 210 190 314

1995-96 314 248 209 209 311

1996-97 312 246 212 205 308

1997-98 319 240 235 205 316

1998-99 376 237 198 205 370

1999-00 240 241 217 163 239

2000-01 301 243 222 186 298

2001-02 286 229 221 200 282

200-03 323 228 218 200 317

2003-04 319 280 222 454 315

2004-05 315 224 221 575 307

2005-06 153 811 240 844 194

2006-07 169 818 184 595 212

2007-08 257 225 226 604 255

2008-09 208 789 153 727 258

2009-10 213 761 124 705 264

Mean 276.25 353.85 202.15 363 282.75

Source Compiled from various Annual Reports of Spices Board of India


121

It is clear from the above table that the overall productivity of pepper, on an

average, was 282.75 kg/ha which was almost similar to the productivity at the

beginning (276 kg/ ha) of the study period. The productivity of pepper in Kerala was

278 kg/ha in 1990-91 increased to 376 kg/ha in 1998-99 but decreased to 213 kg/ha in

2009-10. Likewise, the productivity of Tamilnadu had decreased from 211kg/ha in

1990-91 to 124 kg/ha in 2009-10. The productivity of Karnataka had shown

tremendous increase from 253 kg/ha in 1990-91 to 818 kg/ha in 2006-07 but came

down to the level of 761 kg/ha in 2009-10.

Except Kerala, the productivity of Karnataka and other states had shown a

remarkable increase during the review period. Based on the mean value, Karnataka

stood first (353.85 kg/ha) followed by Kerala (276.25 kg/ha) and Tamilnadu (202.15

kg/ha) in the productivity of pepper. Pepper Productivity in Major States of India

(mean productivity) results are clearly depicted in chart 5.7


122

Chart: 5.7 Pepper Productivity in Major States of India

0

50

100

150

200

250

300

350

400

Kerala Karnataka Tamilnadu Others

Mean value 276.25 353.85 202.15 363

Me

an p

rod

uct

ivit

y (

kg/

ha)


123

Growth and Instability of Pepper Production

To analyse the growth & instability of pepper production in India (Area,

Production and Productivity) and pepper export (Quantity, Value and Unit value) the

study had considered data from 1990-91 to 2009-10 (20 years). This period was

divided into 4 sub periods and each period had 5 years: Period I (1991-95), Period II

(1996 – 00), Period III (2001 – 2005) and Period IV (2006 – 2010) and the total

period consisted of 20 years (1990-91 to 2009-10). To understand whether the trend in

production was productivity led growth or area led growth, the Compound Annual

growth Rate (CAGR) and Massell Instability Index (II) Analysis were made on

pepper production of selected states. The results of analysis are shown from Table 5.8

to Table 5.12

Table: 5.8 Growth and Instability in Area, Production and Productivity of

pepper in Kerala

(in percentage)

Year

CAGR Instability Index

Area Production Productivity Area Production Productivity

Period I 2.43 4.67 2.19 0.61 1.97 2.20

Period II 1.34 -2.19 -3.48 2.18 5.08 5.88

Period III 3.91 6.02 2.04 0.99 1.57 1.52

Period

IV -10.63 -2.52 9.08 1.80 4.55 5.86

Over All 0.45 -1.46 -1.91 4.84 9.56 8.38

Note: Calculated from data in Table 5.5, 5.6 and 5.7.

Growth Rate

The results of CAGR revealed that the overall growth in production of Kerala

was negative at 1.46 per cent mainly due to the low productivity (registering a


124

negative growth) at the rate of 1.91per cent per annum. The shrinkage in area was the

major cause for low production of pepper especially in the latest period (2005-06 to

2009-10) this is not a welcoming sign as Kerala has the suitable climatic condition for

the production of pepper. The highest growth rates for area (3.91 per cent) production

(6.02 per cent) and productivity (9.08 per cent) were recorded in Period III only. It is

concluded that a stagnation was noticed in the production of pepper in Kerala during

the last five year period

Instability index

The results of the instability index revealed that, pepper cultivable area in

Kerala was more stable at 0.61 per cent in Period I and 0.99 per cent in Period III as

compared to other sub periods. The result indicated that the degree of instability in

area, production and productivity of Kerala was more pronounced during the Period II

with 2.18 per cent, 5.08 per cent and 5.88 per cent respectively compared to other sub

periods. Moreover, the instability in production of pepper (9.56 per cent) in Kerala

during last two decades was mainly due to the instability in productivity

(8.38 per cent) than in area (4.84 per cent). it was also observed that the level of

instability in productivity was higher compared to the level of instability in area

during all sub periods. Hence, it is concluded that the instability in production of

pepper in Kerala was mainly due to fluctuations in pepper productivity. Therefore

pepper productivity of Kerala need to be enhanced with the support of Government

and Spices Board.


125


Pepper in Karnataka

(in percentage)

Year



Period I 2.15 1.47 -0.67 0.74 0.76 0.25

Period II 16.59 15.44 -0.99 5.21 5.56 0.41

Period

III 31.93 32.43 0.38 5.61 5.09 3.53

Period

IV 2.57 0.92 -1.61 0.67 21.40 21.93

Over All 12.67 18.46 5.14 10.20 17.02 16.45


Growth Rate

The results of CAGR revealed that the overall growth of Karnataka in terms of

area, production and productivity was showing an increasing trend at a rate of 12.67

per cent, 18.46 per cent and 5.14 per cent per annum respectively. This was mainly

attributed to the increase in area than in productivity. Moreover, a phenomenal growth

in production of pepper 32.43 per cent was noticed in Period III mainly due to the

high growth rate in area (31.93 per cent).

The results also revealed that except productivity, pepper cultivable area and

production were showing positive growth during all sub periods and also in overall

period. Therefore, the growth in production of pepper in Karnataka was area led

growth.

Instability index

The above table shows that the pepper cultivable area, production and

productivity of Karnataka were more stable in Period I at 0.74 per cent, 0.76 per cent


126

and 0.25 per cent respectively. The degree of instability in production and

productivity of pepper of Karnataka was more pronounced during the Period IV with

21.40 per cent and 21.93 per cent respectively compared to other sub periods.

However, the degree of instability for area for the Period IV was low. Hence, the high

fluctuation in productivity could be the cause for the inconsistency observed in

production during the overall period than area.


pepper in Tamilnadu

(in percentage)

Year



Period I 14.01 12.83 -1.03 5.63 12.65 13.00

Period II 2.91 2.96 0.05 5.12 7.48 2.47

Period

III 0.51 0.44 -0.07 0.58 0.91 0.03

Period

IV -0.43 -14.32 -13.94 3.08 2.67 5.27

Over All 2.54 2.33 -0.21 6.97 12.76 9.40


Growth Rate

The results of CAGR revealed that, overall, there was a positive growth in

production and area in the rate of 2.33 per cent and 2.54 per cent per annum

respectively. This was mainly attributed by the growth in area, because the growth

rate for productivity was negative during all periods except Period II. Compared to

other sub periods, the growth rate of area (-0.43 per cent), production (-14.32 per

cent) and productivity (-13.94 per cent) were negative during the latest period which


127

is to be seriously viewed by the state. Therefore, the growth in production was area

led growth and not due to productivity.

Instability index

The results of instability index indicated that in last two decade the higher

degree of instability in production (12.76 per cent) of pepper in Tamilnadu was

mainly due to the instability in productivity (9.40 per cent) than in area (6.97 per

cent). However, the lower degree of instability in terms of area, production and

productivity was noticed in Period III (2000-01 to 2004-05)


pepper in Other States

(in percentage)

Year



Period I 2.09 7.65 5.44 21.52 6.39 20.66

Period II 0 -4.90 -4.90 0.49 3.09 2.67

Period

III 29.34 75.94 36.03 5.17 13.38 8.58

Period

IV -14.11 -15.48 -1.59 1.66 5.89 5.54

Over All 3.64 12.17 8.23 15.74 19.73 17.66


Growth Rate

The results of CAGR revealed that overall the growth in production of ‘other

states’ was increasing at a rate of 12.17 per cent which was mainly due to the higher

growth in productivity at 8.23 per cent per annum growth in area at 3.64 per cent per

annum. The high growth in area (29.34 per cent), production (75.94 per cent) and


128

productivity (36.03 per cent) recorded in Period III could be the reason for the positive

growth in area, production and productivity of pepper during the overall period.

Instability index

The high instability was observed in the Period I with an index of 21.52 per cent

and 20.66 per cent for area and productivity respectively, compared to other sub periods.

For the entire period 1990-91 to 2009-10, the instability analysis showed that the high

instability in production (19.73 per cent) was mainly due to high instability index value

observed for pepper productivity (17.66 per cent) than area (15.74 per cent).


pepper in Overall India

(in percentage)

Year



Period I 2.36 4.70 2.09 0.64 1.95 2.19

Period II 1.71 -1.74 -3.39 2.26 4.75 5.69

Period

III 5.34 7.18 1.74 1.34 1.52 1.54

Period

IV -9.55 -1.94 8.41 1.69 0.72 1.96

Over All 0.96 0.04 -0.91 4.79 7.05 5.91


Growth Rate

The results of CAGR revealed that, for overall period, the production of

pepper at all India level was low at 0.04 per cent per annum, mainly due to the growth

in area (0.96 per cent per annum) as the productivity was showing a negative growth

of 0.91 per cent. Like other states, the growth in Period III was found to be significant

in respect of area, production and productivity. Hence, the Spices Board and other


129

Government agencies must take some efforts to improve the productivity of pepper so

as to augment the production. Therefore, the growth in production (0.04 per cent)

during last two decades was mainly attributed by the positive growth in production

noticed in all states except Kerala.

Instability index

It is essential to analyse instability of Indian pepper production in terms of

area, production and productivity. Based on the results, the high instability observed

in production (7.05 per cent) was mainly due to the inconsistency prevailing in

productivity (5.91 per cent) than in area (4.79 per cent) during overall period.

Similarly trend was noticed during all sub periods also. Hence, the productivity was

the major cause of concern in Indian pepper production

One- way ANOVA for Pepper Productivity in India

Even though pepper is cultivated in various states, the productivity may differ

from state to state due to the difference in soil, weather, irrigation facilities etc. In this

context, one-way ANOVA was applied to assess mean difference in productivity of

pepper among three major states viz. Tamilnadu, Kerala and Karnataka. The results

are exhibited in Table 5.13.

Table: 5.13 One Way-ANOVA for Pepper Productivity in Major States

Sum of Squares DF Mean Square F P

value

Between Groups .123 2 .062

.579 0.564 Within Groups 6.064 57 .106

Total 6.187 59

Note- 1: Calculated from data in Table 5.8.

Note-2: 5 per cent significant level


130

From the ANOVA table it was observed that the F-value was 0.579 with the

p-value of 0.564. The presence of high p-value indicated that there was no significant

difference in pepper productivity among three states. This was mainly because of all

the three selected states are in the southern part of the country, having uniform

weather and temperature.

Various forms of pepper export

India holds a supreme position in the production of pepper and two of its

celebrated varieties of Black pepper are Malabar Garbled and Tellicherry extra bold.

Pepper is traded in a variety of forms such as whole/ unprocessed raw material and as

ground/ powdered as value added product. Black pepper, green pepper were normally

exported as unprocessed form, while, after value addition the pepper is exported in the

forms of white pepper, pepper powder, pepper pinheads, frozen-dried dehydrated

(FR.DRY) etc. Pepper export in different forms reflects the changing tastes and

preferences of overseas consumers.

To get clear picture about the share of various forms of pepper exported,

during the review period, an analysis was carried out on the varieties of pepper like

White pepper, Pepper Powder, pepper pinheads, Black pepper, Green pepper,

FR.DRY. Green pepper, Pepper in Brine, Long pepper, from the export data

(by quantity) and the results are presented in Table 5.14.


131

Table: 5.14 Product-wise Pepper Export from India by Quantity

(in tonnes)

Product White Pepper Pepper Powder Pepper Pinheads Black Pepper Green Pepper FR. DRY. Green

pepper

Year (Quantity) (%) (Quantity) (%) (Quantity) (%) (Quantity) (%) (Quantity) (%) (Quantity) (%)

1990-91 5 0.02 35 0.12 663 2.21 27960 93.25 170 0.57 1 0.00

1991-92 29 0.14 10 0.05 445 2.17 19038 92.71 145 0.71 1 0.00

1992-93 33 0.14 81 0.34 333 1.40 22021 92.44 299 1.26 17 0.07

1993-94 86 0.18 182 0.37 130 0.27 46675 95.76 240 0.49 26 0.05

1994-95 266 0.71 243 0.65 147 0.39 35128 94.27 247 0.66 13 0.03

1995-96 144 0.55 400 1.52 289 1.10 23751 90.50 271 1.03 28 0.11

1996-97 283 0.59 261 0.54 82 0.17 45361 94.71 277 0.58 24 0.05

1997-98 208 0.58 554 1.55 683 1.91 38115 90.23 241 0.67 17 0.05

1998-99 133 0.38 847 2.41 128 0.36 30869 87.90 204 0.58 10 0.03

1999-00 119 0.28 1032 2.41 864 2.02 39459 92.18 303 0.71 32 0.07

2000-01 82 0.38 1556 7.13 643 2.95 18476 84.64 264 1.21 61 0.28

2001-02 186 0.81 2637 11.53 266 1.16 18400 80.43 326 1.43 12 0.05

2000-03 220 1.02 3381 15.65 608 2.81 15641 72.38 771 3.57 44 0.20

2003-04 238 1.43 2175 13.07 374 2.25 9762 58.68 440 2.65 32 0.19

2004-05 190 1.34 2097 14.82 261 1.84 6674 47.17 512 3.62 45 0.32

2005-06 171 0.98 2986 17.20 284 1.64 8543 49.20 637 3.67 80 0.46

2006-07 452 1.57 3509 12.21 209 0.73 18750 65.22 453 1.58 12 0.04

2007-08 203 0.58 3834 10.95 336 0.96 24907 71.16 604 1.73 68 0.19

2008-09 382 1.51 4113 16.29 238 0.94 16355 64.77 554 2.19 24 0.10

2009-10 158 0.80 5260 26.63 117 0.59 10150 51.39 537 2.72 35 0.18

Mean 179.4 1759.65 355 23801.75 374.75 29.1



132

(Conti…)

Product/

Year

Pepper In Brine Long Pepper Other Products Total Export

(Quantity) (Quantity) (%) (Quantity) (%) (Quantity) (%)

1990-91 974 3.25 29 0.10 149 0.50 29985

1991-92 791 3.85 42 0.20 34 0.17 20535

1992-93 872 3.66 16 0.07 149 0.63 23821

1993-94 921 1.89 89 0.18 395 0.81 48743

1994-95 708 1.90 46 0.12 467 1.25 37264

1995-96 903 3.44 39 0.15 421 1.60 26244

1996-97 692 1.44 35 0.07 878 1.83 47893

1997-98 1227 3.44 24 0.07 535 1.50 35719

1998-99 1762 5.02 13 0.04 1152 3.28 35120

1999-00 1014 2.37 15 0.04 331 0.77 42806

2000-01 748 3.43 13 0.06 130 0.60 21830

2001-02 1050 4.59 53 0.23 530 2.32 22877

2000-03 943 4.36 103 0.48 898 4.16 21609

2003-04 1025 6.16 34 0.20 2555 15.36 16635

2004-05 1158 8.18 31 0.22 3180 22.48 14148

2005-06 1070 6.16 15 0.09 3577 20.60 17363

2006-07 1048 3.65 10 0.03 4307 14.98 28750

2007-08 1083 3.09 8 0.02 3957 11.31 35000

2008-09 1096 4.34 7 0.03 2481 9.83 25250

2009-10 968 4.90 5 0.03 2520 12.76 19750

Mean 1002.65 31.35 1432.3 28567.1


133

As seen from the table, among the various forms of pepper exported, black

pepper was exported more on an average of 23801 tonnes, per annum, without any

value additions followed by pepper powder with mean value of 1759.65 tonnes and

pepper in brine with mean value of 1002.65 tonnes (the last two were value added

products). The export of black pepper in 1990-91 was 27960 tonnes and it increased

to an all time high of 46675 tonnes in 1993-94 but later slowly decreased to reach the

level of 10150 tonnes (almost one third deceleration) in 2009-10. Though black

pepper continued to be the major form of pepper exported, its share in total pepper

export had drastically come down from 93.25 per cent in 1990-91 to 51.39 per cent in

2009-10 which was not encouraging. In contrast there was a steep increase in the

share of green pepper from 0.57 per cent to 2.27 per cent on total pepper export

during the review period. Likewise, the share of other forms of pepper with value

addition viz pepper powder, fry dry green pepper, pepper in brine, increased

indicating the growing demand for these products. However, the share for pepper

pinheads and dry pepper had decreased indicating that these forms of pepper were

losing the market in the importing countries. Product Wise Pepper Export from India

by Quantity (mean quantity) results is clearly depicted in Chart 5.8.

Product-wise Pepper Export from India by Value

The Table 5.15 gives the analysis of various forms of pepper exported by

value in order to assess the product form which is fetching high value in the

international market.


134

Chart: 5.8 Product Wise Pepper Export from India by Quantity

0

5000

10000

15000

20000

25000

White Pepper Pepper Powder

Pepper Pinheads

Black Pepper Green Pepper FR. DRY. Green Pepper

Pepper In Brine

Long Pepper Others

Me

an q

uan

tity

(in

to

nn

es)

Pepper products

Mean value


135

Table: 5.15 Product Wise Pepper Export from India by Value


Product/

Year

White Pepper Pepper Powder Pepper Pinheads Black Pepper Green Pepper FR. DRY. Green Pepper

(Value) (%) (Value) (%) (Value) (%) (Value) (%) (Value) (%) (Value) (%)

1990-91 0.7 0.01 11.2 0.11 71.2 0.70 9733.8 95.06 194.3 1.90 2.4 0.02

1991-92 1.9 0.03 4.5 0.06 51.8 0.70 6980.0 93.89 191.6 2.58 5.5 0.07

1992-93 4.2 0.05 30.3 0.38 47.8 0.61 7078.0 89.66 339.1 4.30 120.1 1.52

1993-94 6.5 0.03 111.4 0.59 23.6 0.12 17868.2 94.49 279.5 1.48 175.0 0.93

1994-95 17.5 0.07 164.5 0.70 35.7 0.15 22422.7 94.75 338.7 1.43 95.3 0.40

1995-96 16.3 0.08 248.9 1.27 82.7 0.42 17945.9 91.42 506.1 2.58 218.0 1.11

1996-97 37.3 0.09 189.2 0.46 29.5 0.07 39241.8 95.17 587.7 1.43 144.9 0.35

1997-98 18.8 0.09 101.1 0.48 200.1 0.96 19914.2 95.07 297.9 1.42 73.0 0.35

1998-99 41.2 0.64 130.4 2.01 105.6 1.63 5865.9 90.51 80.7 1.25 11.4 0.18

1999-00 38.0 0.43 171.2 1.93 63.1 0.71 8328.2 93.82 128.1 1.44 31.1 0.35

2000-01 20.9 0.55 304.1 7.93 45.8 1.19 3214.0 83.82 92.9 2.42 61.9 1.61

2001-02 39.0 1.84 291.3 13.74 8.8 0.42 1544.5 72.87 67.0 3.16 11.1 0.52

2000-03 27.4 1.47 238.2 12.80 26.4 1.42 1284.3 69.04 127.2 6.84 34.4 1.85

2003-04 35.2 2.47 174.6 12.23 8.4 0.59 809.9 56.72 84.0 5.88 27.2 1.91

2004-05 29.0 2.38 167.1 13.73 7.2 0.59 539.7 44.34 87.5 7.19 35.3 2.90

2005-06 29.3 1.94 242.4 16.06 7.2 0.48 672.0 44.52 105.5 6.99 66.9 4.43

2006-07 71.8 2.35 356.4 11.64 7.5 0.24 1991.9 65.06 97.0 3.17 11.8 0.39

2007-08 45.1 0.87 530.4 10.21 15.2 0.29 3680.7 70.85 192.5 3.71 38.9 0.75

2008-09 93.5 2.26 759.5 18.36 14.4 0.35 2444.2 59.07 193.2 4.67 24.2 0.58

2009-10 40.7 1.30 867.1 27.62 7.3 0.23 1473.1 46.93 157.4 5.01 31.3 1.00

Mean 30.72 254.69 42.97 8651.65 207.40 60.99



136

(Conti….)

Product/

Year

Pepper In Brine Long Pepper Other Products Total Export

(Value) (%) (Value) (%) (Value) (%) (Value)

1990-91 192.6 1.88 22.8 0.22 11.1 0.11 10240.1

1991-92 186.6 2.51 11.4 0.15 .6 0.01 7433.9

1992-93 164.9 2.09 14.7 0.19 94.9 1.20 7894.0

1993-94 204.6 1.08 41.4 0.22 199.9 1.06 18910.1

1994-95 198.6 0.84 30.8 0.13 360.2 1.52 23664.0

1995-96 300.1 1.53 17.0 0.09 295.1 1.50 19630.1

1996-97 321.3 0.78 20.5 0.05 660.0 1.60 41232.2

1997-98 166.3 0.79 16.8 0.08 159.1 0.76 20947.3

1998-99 112.7 1.74 13.1 0.20 120.0 1.85 6481.0

1999-00 93.2 1.05 10.1 0.11 14.1 0.16 8877.1

2000-01 68.4 1.78 2.5 0.07 24.1 0.63 3834.6

2001-02 75.2 3.55 7.6 0.36 75.1 3.54 2119.6

2000-03 50.9 2.74 6.5 0.35 65.0 3.49 1860.3

2003-04 44.7 3.13 4.1 0.29 239.7 16.79 1427.8

2004-05 56.6 4.65 2.7 0.22 292.1 24.00 1217.2

2005-06 49.3 3.27 2.9 0.19 334.1 22.13 1509.6

2006-07 54.9 1.79 2.4 0.08 468.1 15.29 3061.8

2007-08 80.4 1.55 1.4 0.03 610.4 11.75 5195.0

2008-09 105.7 2.55 1.1 0.03 501.7 12.13 4137.5

2009-10 85.6 2.73 1.1 0.04 475.6 15.15 3139.2

Mean 130.63 11.55 250.05 3014.71


137

As observed from the table, by value also, black pepper was contributing more

during the study period. Black pepper exports increased from Rs 9733.8 million in

1990-91 to Rs 39241.8 million (all time high) in 1996-97 but it drastically fell down

to Rs 14.73 million in the latest period, losing its share from 95 per cent in 1990-91 to

47 per cent in 2009-10 to the total earnings of the country from pepper exports. Based

on mean value, pepper powder (Rs 254.69 million) and green pepper (Rs 207.40

million) were the other forms of pepper exported more in the global market. The steep

increase in the share of value added pepper products such as pepper in brine, FR.DRY

green pepper indicated that there is a growing demand for these products in the

importing countries.

Product-wise Pepper Export from India by Value (mean value) results are clearly

depicted in Chart 5.9

Product wise Pepper Export from India by Unit Value

In order to know the product form which is fetching a high unit value in the

global market, the analysis was made and the results are presented in Table 5.16.


138

Chart: 5.9 Product Wise Pepper Export from India by Value

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

White Pepper Pepper Powder

Pepper Pinheads

Black Pepper Green Pepper FR. DRY. Green Pepper

Pepper In Brine

Long Pepper Others

Me

an V

alu

e (

in R

s m

illio

n)

Pepper products

Mean value


139

Table: 5.16 Product wise Pepper Export from India by Unit Value

(Rs/Kg)

Year White

Pepper

Pepper

Powder

Pepper

Pinheads

Black

Pepper

Green

Pepper

FR. DRY.

Green Pepper

Pepper In

Brine

Long

Pepper Others Total

1990-91 140.00 320.00 107.39 348.13 1142.94 2400.00 197.74 786.21 74.50 341.51

1991-92 65.52 450.00 116.40 366.64 1321.38 5500.00 235.90 271.43 17.65 362.01

1992-93 127.27 374.07 143.54 321.42 1134.11 7064.71 189.11 918.75 636.91 331.39

1993-94 75.58 612.09 181.54 382.82 1164.58 6730.77 222.15 465.17 506.08 387.96

1994-95 65.79 676.95 242.86 638.31 1371.26 7330.77 280.51 669.57 771.31 635.04

1995-96 113.19 622.25 286.16 755.59 1867.53 7785.71 332.34 435.90 700.95 747.98

1996-97 131.80 724.90 359.76 865.10 2121.66 6037.50 464.31 585.71 751.71 860.92

1997-98 90.38 182.49 292.97 522.48 1236.10 4294.12 135.53 700.00 297.38 586.45

1998-99 309.77 153.96 825.00 190.03 395.59 1140.00 63.96 1007.69 104.17 184.54

1999-00 319.33 165.89 73.03 211.06 422.77 971.88 91.91 673.33 42.60 207.38

2000-01 254.88 195.44 71.23 173.96 351.89 1014.75 91.44 192.31 185.38 175.66

2001-02 209.68 110.47 33.08 83.94 205.52 925.00 71.62 143.40 141.70 92.65

2000-03 124.55 70.45 43.42 82.11 164.98 781.82 53.98 63.11 72.38 86.09

2003-04 147.90 80.28 22.46 82.96 190.91 850.00 43.61 120.59 93.82 85.83

2004-05 152.63 79.69 27.59 80.87 170.90 784.44 48.88 87.10 91.86 86.03

2005-06 171.35 81.18 25.35 78.66 165.62 836.25 46.07 193.33 93.40 86.94

2006-07 158.85 101.57 35.89 106.23 214.13 983.33 52.39 240.00 108.68 106.50

2007-08 222.17 138.34 45.24 147.78 318.71 572.06 74.24 175.00 154.26 148.43

2008-09 244.76 184.66 60.50 149.45 348.74 1008.33 96.44 157.14 202.22 163.86

2009-10 257.59 164.85 62.39 145.13 293.11 894.29 88.43 220.00 188.73 158.95

Mean 169.15 274.48 152.79 286.63 730.12 2895.29 144.03 405.29 261.78 291.81



140

As seen from the table that among the pepper products, FR. Dry green pepper

was fetching a very high mean unit value (Rs 2895.29 / kg) and stood first, followed

by green pepper (Rs 730.12/ kg) and long pepper (Rs 405.29 / kg). Black pepper, the

major contributor to India’s pepper export fetched a mean unit value of only

Rs 286.63 /kg which was almost only one tenth of unit value realised by FR. DRY.

green pepper. It also revealed that the value added products were fetching higher unit

value than for products exported in bulk or unprocessed form. However, the unit

value realised by FR. DRY green pepper in 1990-91 was Rs 2400 /kg but it

tremendously fell down to the rate of Rs 894/ kg, which is to be ascertained by the

marketers. Product wise Pepper Export from India by Unit Value (mean unit value)

results are clearly depicted in Chart 5.10


141

Chart: 5.10 Product wise Pepper Export from India by Unit Value

0

500

1000

1500

2000

2500

3000

White Pepper

Pepper Powder

Pepper Pinheads

Black Pepper

Green Pepper

FR. DRY. Green Pepper

Pepper In Brine

Long Pepper

Others

Mean value 169.15 274.48 152.79 286.63 730.12 2895.29 144.03 405.29 261.78

Me

an u

nit

val

ue

(in

Rs

mill

ion

)


142

Growth and Instability in Pepper Export

India is a major producer and exporter of pepper and earned more foreign

exchange through export of pepper. The export performance of a country for any

commodity during any given period is measured not only from the point of view of

increase in quantity exported, value and unit value but also on the extent of

fluctuations taking place in the above variables. Hence the Massell (1964, 1970)

instability index was constructed to understand the stability in pepper export during

the study period. The instability indices were constructed for export quantity, value

and Unit value for the selected forms of pepper and for India and the results are

presented from Table 5.17 to Table 5.26. In the same table the results of the

Compound Annual Growth Rate of pepper export for quantity, value and unit value

have been presented. The study period is divided into four sub periods (same as in the

analysis on pepper production) and for the entire period (covering last two decades)

for this purpose.

Table: 5.17 Growth and Instability in White Pepper export by quantity, value

and unit value

(in percentage)

Year


Quantity Value Unit

Value Quantity Value

Unit

Value

Period I 146.74 118.51 -11.44 13.42 6.20 11.17

Period II -10.69 19.66 33.98 12.06 13.06 14.06

Period III 21.25 5.66 -12.86 11.64 8.77 7.46

Period IV -3.21 9.64 13.28 18.61 17.06 3.42

Over All 12.42 18.27 5.21 32.68 30.64 16.05



143

Growth Rate

The results of CAGR revealed a positive growth in export of white pepper in

terms of quantity, value and unit value during the whole period (1990-91 to 2009-10)

at 12.42 per cent, 18.27 per cent and 5.21 per cent per annum respectively. This was

mainly attributed to the growth in quantity (12.42 per cent) exported since the growth

in unit value had been marginal (5.21 per cent). Moreover, a higher growth noticed

for value (118.51 per cent) in Period I was mainly due to sudden increase in quantity

exported. The positive growth rates were noticed for the value of white pepper in all

four periods indicating the contribution of white pepper to the total export earnings

from pepper of the country

Instability Index

It could be seen from the table that for white pepper, higher degree of

instability indices were noticed for export quantity, value and unit value 32.68

per cent, 30.64 per cent and 16.05 per cent respectively in overall period. This was

mainly attributed by wide fluctuation in quantity exported than the fluctuation in unit

value realised. The same situation was noticed in the latest period also, with a low

degree of instability value (3.42 per cent) in unit value realised

The result also indicated that the degree of instability in export value of white

pepper was mainly dependent on the variations in quantity exported during all the sub

periods except Period II. However, the degree of instability for unit value for the

period IV was low. It is concluded that the export earnings from while pepper was a

quantity driven export.


144

Table: 5.18 Growth and Instability in Pepper Powder export by quantity,

value and unit value

(in percentage)

Year


Quantity Value Unit


Unit

Value

Period I 97.19 135.84 19.60 28.16 26.26 5.35

Period II 36.01 -10.61 -34.28 10.56 11.57 14.93

Period III 4.12 -15.72 -19.05 10.90 2.78 9.41

Period IV 13.78 39.18 22.32 1.75 3.20 4.73

Over All 31.49 19.35 -9.23 28.02 31.98 0.71


Growth Rate

The results of CAGR revealed that the total export of pepper powder during

the decades had grown at an annual rate of 31.49 per cent by quantity, 9.35 per cent

value and at a negative rate of 9.23 per cent for unit value.

Therefore, the growth in value terms was actually dependent on the growth in

quantity exported since the growth in unit value was negative. Exports of pepper

powder had registered an impressive growth rates for all variables in Period I

followed by Period IV showing the demand for this product in global market.

Instability Index

It can be seen from the above table that the higher degree of instability was

found in export value (31.98) of pepper powder during overall period which was

mainly due to the wide fluctuation in quantity exported (28.02 per cent) as the

instability index for unit value (0.71 per cent) was very low. Similarly trend was

noticed in Period I also. Among the sub periods, the stability in all three variables was


145

witnessed only in the latest period (2005-06 to 2009-10). The high instability in

quantity exported with high growth rate revealed the positive relation between growth

and instability.

Table: 5.19 Growth and Instability in Pepper pinheads by quantity, value and

unit value

(in percentage)

Year


Quantity Value Unit


Unit

Value

Period I -34.57 -19.49 23.05 20.45 9.22 2.42

Period II 30.16 7.65 -17.30 36.20 26.90 31.74

Period III -13.61 -31.39 -20.58 14.27 22.29 10.26

Period IV -15.16 6.96 26.07 11.99 14.31 3.31

Over All -1.42 -11.57 -10.29 27.95 30.83 33.19


Growth Rate

The results of CAGR revealed during the last two decades, the negative

growth in export of pepper pinheads in terms of quantity, value and unit value showed

a declining trend. This indicated that this product was not fetching expected price in

the global market leading to the negative growth in value. Similar trend was observed

in Period III for all the variables with negative/ decelerating growth rate. Compared to

other sub periods, the export of pepper pinheads, by value, registered the highest

growth in Period II which might be due to the trade policy adopted after WTO.

Instability Index

The result indicated that the higher degree of instability in export value (30.83

per cent) of pepper pinheads was pronounced only during the overall period, mainly


146

due to wide fluctuation noticed in unit value realisation (39.19 per cent) than the

fluctuation in quantity exported (27.95 per cent). However, in all (four) sub periods

the level of instability in quantity exported was higher than the level of instability in

unit value realised (except in Period II) for the product pepper pinheads.

Table: 5.20 Growth and Instability in Black pepper by quantity, value and

unit value

(in percentage)

Year


Quantity Value Unit


Unit

Value

Period I 14.49 29.81 13.38 11.22 13.34 7.20

Period II 6.51 -29.08 -33.41 9.00 20.21 11.70

Period III -23.44 -34.39 -14.31 5.86 4.50 8.86

Period IV 2.10 19.42 16.96 17.11 22.24 5.30

Over All -5.58 -14.48 -9.42 18.87 37.19 23.08


Growth Rate

The results of CAGR revealed that the in the overall period the estimated

growth in export of black pepper in terms of quantity, value and unit value showed a

declining trend with a negative figure of 5.58 per cent, 14.48 per cent and 9.42 per

cent per annum respectively. This was mainly attributed to the low unit value realised

than the quantity exported. Similar trend was also noticed for all variables during

Period III but the declining trend in value was mainly due to the decline in quantity

exported than the low unit value. This poses threat as black pepper was the major

pepper product exported from India. However, a high growth rate was registered for


147

quantity, value and unit value during latest period highlights the scope for promoting

this product in the global market.

Instability Index

The results of analysis for instability in black pepper export exhibited a high

instability was noticed in all three variables only during the overall period. However,

the high level of instability in export value (37.19 per cent) could be due to wide

fluctuation in unit value realisation (23.08 per cent) than the variations in quantity

exported (12.87 per cent). During the sub periods, the instability in black pepper

quantity, value and unit value was the least only in Period III.

Table: 5.21 Growth and Instability in Green pepper by quantity, value and

unit value

(in percentage)

Year


Quantity Value Unit


Unit

Value

Period I 13.24 16.05 2.48 8.55 6.20 3.14

Period II -0.81 -37.71 -37.20 5.91 16.74 12.76

Period III 17.64 1.06 -14.10 12.63 8.95 7.41

Period IV -1.39 16.06 17.70 5.01 8.89 6.66

Over All 7.00 -5.37 -11.56 10.26 23.21 22.78


Growth Rate

The results of CAGR revealed a negative growth in the export of green pepper

during overall period, in terms of value (-5.37 per cent) and unit value (-11.56

per cent) indicating the down trend whereas quantity registered a positive growth at a

rate of 7 per cent per annum. This was mainly attributed to low unit value realisation


148

during the study period. Period II also registered a negative growth for all variables.

However, a high growth was registered for value (16.06 per cent) in the latest period

and it was unit value (17.70 per cent) that contributed to its growth.

Instability Index

It could be seen from the table that for green pepper, the highest instability

indices for export quantity, value and unit value were observed only in overall period

(1990-91 to 2009-10) with 10.26 per cent, 23.21 per cent and 22.78 per cent

respectively. This showed that green pepper trade in terms of export earning was

very much responsive to unit value realisation. However, the last five years period

(2005-06 to 2009-10) witnessed a lower degree of instability in terms of quantity,

value and unit value with 5.01 per cent, 8.89 per cent and 6.66 per cent respectively.

Table: 5.22 Growth and Instability in FR.DRY. Green pepper by quantity,

value and unit value

(in percentage)

Year


Quantity Value Unit


Unit

Value

Period I 133.03 195.12 26.64 34.69 38.40 10.37

Period II -5.19 -47.46 -44.58 17.38 24.04 11.58

Period III 3.79 -2.20 -5.78 24.27 24.31 2.30

Period IV -9.16 -7.68 1.63 29.58 24.25 8.86

Over All 13.11 -0.98 -12.46 38.79 49.79 23.44


Growth Rate

The results of CAGR revealed that the negative growth in the export of

Fr. Dry. green pepper during overall period in terms of value (-0.98 per cent) and unit


149

value (-12.46 per cent) indicating a down trend whereas the quantity registered a

positive growth of 13.11 per cent per annum for the same period. This was mainly

attributed to the low unit value realised. Moreover, the export value registered a

negative growth rate even during all sub periods except Period I (like green pepper),

Period II registered a negative growth for all variables.

Instability Index

Like other pepper products, the highest degree of instability was registered

only during overall period in the export of Fr. Dry green pepper in terms of quantity

38.79 per cent, value 49.79 per cent and unit value 23.44 per cent. Moreover, the

instability observed for three variables in all sub periods was high which was mainly

due to high variation in quantity exported. Being a value added items, in augmenting

the quantity the processors need the support of both public and private agencies in

establishing processing units, getting loans, market based information etc.

Table: 5.23 Growth and Instability in Pepper in brine by quantity, value and

unit value

(in percentage)

Year


Quantity Value Unit


Unit

Value

Period I -4.74 1.54 6.60 3.91 3.10 4.62

Period II 12.37 -28.73 -36.58 11.55 6.33 17.02

Period III 8.87 -8.62 -16.07 3.72 6.12 4.68

Period IV -1.54 19.21 21.08 1.66 6.06 4.41

Over All 1.27 -7.56 -8.71 8.31 17.49 20.59



150

Growth Rate

Similar to other pepper products (export white & black pepper), the results of

CAGR revealed a negative growth was registered in the export of pepper in brine,

during overall period, in terms of value (-7.56 per cent) and negative growth in unit

value (-8.71 per cent) was the major reason for this. Moreover, a high growth was

noticed for quantity (12.37 per cent) in Period II, for value (19.21 per cent) and unit

value (21.08 per cent) during the Period III.

Instability Index

It can be seen from the Table higher degree of instability in export earnings

(17.49 per cent) that the of pepper in brine was mainly due to high fluctuation in unit

value realisation (20.59 per cent) noticed during the overall period as instability index

for quantity exported was marginal. During four sub periods also, the degree of

instability was more pronounced in unit value realised than in quantity exported.

Hence, it is concluded that the stability in the export earnings from pepper in brine is

based on getting a stable price in the global market.

Table: 5.24 Growth and Instability in Long pepper by quantity, value and unit value

(in percentage)

Year


Quantity Value Unit


Unit

Value

Period I 18.19 20.83 2.23 22.49 16.80 19.11

Period II -24.97 -13.89 14.78 6.89 5.47 8.08

Period III 13.82 -4.20 -15.83 28.42 19.26 12.73

Period IV -22.54 -23.61 -1.38 2.69 5.20 6.26

Over All -7.61 -15.97 -9.05 28.95 20.13 25.96



151

Growth Rate

The results of CAGR revealed that for the overall period, the negative growth

in export earnings of long pepper showed the declining trend. This was mainly

attributed to the decrease in quantity as well as unit value. Moreover, a high growth

was noticed for quantity 18.19 per cent and 20.83 per cent in period I, similarly, unit

value 14.78 per cent during the Period II.

Instability Index

It could be seen from the table that high level of instability was noticed for

Long pepper in the overall period for export quantity, value and unit value with 28.95

per cent, 20.13 per cent per cent and 25.96 per cent respectively. It indicated that the

wide variation in quantity exported could be the main reason (with 28.95 per cent)

than the unit price realised. However, among the sub periods, the instability in terms

of quantity, value and unit value was very low during the latest period was an

encouraging one.

Table: 5.25 Growth and Instability in Other peppers by quantity, value and

unit value

(in percentage)

Year


Quantity Value Unit


Unit

Value

Period I 60.86 257.55 122.28 28.44 63.96 40.29

Period II -2.05 -54.11 -53.16 19.99 28.87 12.86

Period III 121.82 85.01 -16.60 11.55 12.51 9.49

Period IV -11.77 8.06 22.48 6.37 6.98 4.27

Over All 21.10 17.19 -3.23 31.39 61.84 42.23



152

Growth Rate

The results of CAGR for overall period revealed that there was a significant

growth in value terms (17.19 per cent per annum) for other peppers such as dry

peppers etc which was mainly due to the high growth rate (21.10 per cent per annum)

in quantitative terms. The negative growth rate (3.23 per cent per annum) registered

for the product indicating that unit prices were declining in the export market. On

average in period IV (2005-06 to 2009-10) the growth of ‘other pepper’ export of the

country was negative in quantitative terms with 11.77 per cent but positive in terms of

value and unit value 8.06 per cent and 22.48 per cent respectively, stating that the

growth in export earnings from other peppers was due to the growth in unit value.

Instability Index

It could be seen from the table instability was very high in the export of ‘other

pepper’ in terms of all three varieties namely quantity (31.39 per cent) value

(61.84 per cent) and unit value (42.23 per cent) in comparison to the other sub periods.

However, the instability for all the three variables in Period IV was very low, giving a hope

that there is an existing demand for other products in the international market.

Table: 5.26 Growth and Instability in Overall pepper by quantity, value and

unit value

(in percentage)

Year


Quantity Value Unit


Unit

Value

Period I 13.87 29.81 14.40 10.80 12.53 6.59

Period II 6.91 41.10 31.98 7.89 5.68 3.27

Period III -11.18 -23.18 -13.44 3.59 5.37 8.50

Period IV 1.29 19.30 17.74 10.94 14.47 4.06

Over All -2.33 4.54 7.05 13.79 27.22 17.70



153

Growth Rate

The results of CAGR revealed that the overall, the estimated growth of pepper

during overall period in terms of value (4.54 per cent) and unit value (7.05 per cent)

showed the increasing trend in pepper export of India even though quantity exported

indicated declining trend with negative rate of 2.33 per cent per annum. Moreover, a

high growth noticed during the latest period for quantity 1.29 per cent, value

19.30 per cent and unit value 17.74 per cent is encouraging that Indian pepper is

having demand in international market.

Instability Index

It is evident from the table that the instability index for the total pepper was

high during the overall period in terms of quantity, value and unit value with

13.99 per cent, 27.22 per cent and 17.70 per cent respectively. The instability in the

export value of pepper was mainly due to the wide fluctuations noticed in unit value

realisation than in the quantity exported. However, there are differences in behaviour

of individual pepper during these periods. The result indicated that the degree of

instability in quantity and value of Overall peppers exported was more pronounced

during the Period IV with 10.94 per cent and 14.47 per cent respectively compared to

other sub periods. However, the degree of instability for unit value realised for the

period IV was low during the same period.


GROWTH AND INSTABILITY IN PEPPER PRODUCTION AND...

Documents

Transcript of GROWTH AND INSTABILITY IN PEPPER PRODUCTION AND...