Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010No distinction is made between large and small cardamom in most trade statistics, the main exceptionbeing India’s statistics. 3 India produces large cardamom and imports mainly from Nepal (with little importsfrom Bhutan). Some of the production and imports are exported to Pakistan, Saudi Arabia, UAE, and othercountries. Using world trade data would be misleading because it includes small cardamom, which is a verydifferent product. 4Market Access Conditions (Tariffs and non-tarrif barriers): So far Nepal has not come across any marketaccess problem in exporting large cardamom to overseas markets. Exporters need to submit certificates oforigin and a quarantine. There is no import duty on large cardamom entering India from Nepal.Nepal charges an export fee of 0.5 per cent at the customs. Traders complain they have to pay a kind of octroiat many places inside Nepal while transporting large cardamom from production areas to terminal marketslike Birtamod and Biratnagar and while exporting to India.Tariff barriers are generally low or nonexistent for cardamom in the USA, European Union (EU), Japan, andmost of the Middle East countries. In most markets, including Pakistan, Nepal does not enjoy any preferentialaccess compared to India, which is the only other exporter to those markets.Major Competitors in World Market: India is both the main destination for Nepal’s exports and the maincompetitor in the world market. Bhutan is the only other producer of large cardamom. 5 On the other hand,the small and green cardamom (Elettaria cardamomum), mainly exported by Guatemala, could be seen asthe main competitor for Nepali large cardamom (Amomum sublatum Roxb) in the world market. However,it is widely believed that the two varieties cannot be considered competing products because the marketsegments and demand for these two types of cardamom are very different, although not mutually exclusive.World Market Prospect: The overall production of large cardamom in the three producing countries, Nepal,India, and Bhutan, has been relatively stable in recent years with additional production in Nepal replacingsome of the production in India (ITC, 2007c). Demand for large cardamom is regionally limited to South Asia.Though some consumption of large cardamom occurs in the Middle East, Europe, and the USA (mainly bySouth Asian ethnic groups), market development activities would be required to increase awareness of thisvariety before any large-scale demand could occur outside South Asia. The key market for large cardamomwithin South Asia is Pakistan.Index 3: Domestic Supply ConditionsProducers: A large number of farmers are involved in this sector. It is estimated that more than 25,000 farmhouseholds are involved in its production in Ilam, Panchthar, and Taplejung districts alone, and as many as67,000 households in all Nepal. Besides, a large number of private proprietors, traders, and transporters areinvolved in the value chain.Production Capacity: Large cardamom in Nepal is a high-value traditionally grown crop in more than 37hill and mountain districts. In 2007/08, the total area under cultivation was 13,784 hectares (ha) and theproduction was 7,087 metric tons (MT). Production has increased in recent years and there is potential forfurther increase (see below). 63India breaks down 0908.30 in several products, one of which being large cardamom. Most other countries put both small and large cardamomtogether.4Annual world exports of all cardamom (small and large) is US$100-300 million a year. Guatemala is the main exporter, but exports smallcardamom. Nepal is second, followed by India. See ITC (2007c) for an extensive discussion on the (non-) substitutability of large and smallcardamom.5Myanmar produces some large cardamom but does not enter the international markets to the extent of competing with Nepali large cardamom.6These are official Nepalese figures. However, import data from India suggests that the production might be even higher. In 2008, India reportedimports of 10,391 MT of cardamom from Nepal, significantly more than what Nepal officially produces. This could partly be explained by the factthat stocks might be carried over to the next year.NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT23