Benefits from Beijing squeeze Indian farmer margins
November 24, 2010

Sops from Beijing are aiding Chinese farmers to grow more tea and paprika, overshadowing India’s production and squeezing margins for Indian farmers.

In 2005, China pipped India to become the world’s largest producer of tea. Between 2005 and 2009, India’s share in world tea exports subsequently declined from 15 percent to 13 percent, while China’s share during the same period increased from 16 percent to 19 percent, according to a study by the Indian Tea Association (ITA). In 2009, China’s export was around 300 million kg including 230 million kg of green tea as against India’s 197 million kg, entirely black tea. In 2010, China’s exports, according to official sources, will rise two per cent over 2009 figure.

Similarly, global paprika oleoresin (extract of paprika) production, is about 7,000-8,000 tonne. Of this, China’s contribution is in the range of 3,000-3,500 tonne while India’s share is around 2,500 tonne. The rest is produced by Mexico, Peru and other countries. While five years ago, India had a monopoly in the market, price cutting by about 30 percent by Chinese farmers who enjoy benefits from Beijing is hurting Indian farmer margins, dissuading them from producing more and rather importing the spice extract from China.

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