CRITICAL ASSESSMENT OF DIRECTION AND UNDERLYINGCOMPETITION IN GLOBAL PEPPER TRADE

Abstract

 This paper aims to trace the direction, suppliers and markets in the pepper trade. Moreover, it analyses intense competition amongst several suppliers exporting to major importers. Specifically, India’s advantages and biggest markets for Indian pepper products in the HSN code 0904 have been assessed in order to identify India’s current position in the pepper trade. A true indicator of a country’s exporting ability and advantage as an exporter for a particular HSN code is Revealed Comparative Advantage, this has been calculated for the top 5 exporters of HSN 0904.

Products within the HSN code 0904 including red chilli and black pepper are amongst India’s most exported spices. Thus, it becomes important for us to analyse what India’s current position in this trade is and what lies ahead for the country in the same. This leads to questions on market diversity and the stability of Indian pepper trade, which is precisely what this paper attempts to answer. The spice trade is historically and presently imperative for several stakeholders globally; this includes the supplying economies; the importing markets and farmers whose livelihoods depend on the spice trade. In both the Indian and the global context, the impact that pepper trade has on these stakeholders is immense, considering pepper and chilli are amongst the most imported and exported spices in the world.

By identifying the economies that have a stake in the pepper trade, including major markets like the United States of America and identifying who its suppliers are, the paper also explains in detail the interplay between demand and supply along with which suppliers are competing for a share in these markets. Currently, as trade wars erupt and regional tensions rise, it is imperative to analyze the existing dynamics of pepper trade in order to safeguard the stakeholders involved in it, while protecting a huge asset of the overall Indian trade.