ANALYSIS OF EXPORT AND PRICING OF BLACK PEPPER
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Date
2007-01-05
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University of Agricultural Sciences GKVK, Banglore
Abstract
Black pepper is a 'King of Spice', the export performance and pricing of
black pepper were analyzed by highlighting the growth in area, production
and productivity. The growth in export quality, value and unit value, the
direction of trade and the relationship between domestic (Cochin) and
international (New York) market prices have been analysed. Secondary data
for the period from 1980-81 to 2002-03 was made use for the study.
Further, the analysis is made for both pre and post-liberalization period. The
exponential growth function, Markov Chain analysis and Co-integration
techniques were used.
The results revealed that a significant growth in area, production and
productivity of black pepper. The results for pre and post-liberalization
period showed that during pre-liberalization period, the growth rates
recorded were higher and significant for area (5.64) and production (8.06)
compared to post-liberalization period due to the stiff competition from
different black pepper, producing countries, which lead to decline in the
growth rate.
The export quantity of pepper showed a negative growth rate (-0.197).
Whereas, export value (10.07) and unit value (10.29) of pepper showed
positive and significant growth mainly due to the increasing quality
consciousness at international market. Compared to the pre-liberalization
period, the post-liberalization period showed lesser growth in both export
quantity and value, due to existence of stiff competition from different black
pepper exporting countries at the international market level. The Markov
Chain analysis revealed that Canada and USA were the major importers of
Indian pepper mainly due to their preference for the high quality Indian
pepper compared to the pepper of other exporting countries.
Co-integration between black pepper prices in Cochin and New York
markets showed negative and significant at the order of integration 1 and
both the market were integrated and also the law of one price (LOP) holds
good.
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