project report on kapec

7/28/2019 project report on kapec

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EXPORT ANALYSISKAPPEC LTD.

GENERAL INTRODUCTION

1.1 INDUSTRIAL BACKGROUND

Trade and commerce have been the backbone of the Indian economy right from

ancient times. Textiles and spices were the first products to be exported by India.

The Indian trade scenario evolved gradually after the countrys independence in

1947. From the 1950s to the late 1980s, the country followed socialist policies,

resulting in protectionism and heavy regulations on foreign companies

conducting trade with India. Indias international trade situation improved when

Prime Minister Rajiv Gandhi reformed the trade policies in the late 1980s. With

tax reforms, deregulations and privatization initiatives, India has attracted the

global markets attention.

Trade, both domestic and inter -national, is the pivotal link connecting production

and consumption. Hence, traders and merchants have as important a role in an

economic system as producers and consumers do. Traders and merchants are a

highly heterogeneous cross section, operating at vastly diverse scales, regions and

activities. Each level, right from the village kirana shop keeper to the all-

conquering global conglomerates, is important on its own and has specific sets of

comparative advantages as well as operational difficulties.

The Indian economy experienced a change in its structure, competitiveness and

global identity in the last two decades, which has resulted in rich growth dividends

during the post-2000 period. The economy posted an impressive average annual

growth close to 9 per cent during the period 2003-04 to 2007-08. Agriculture grew

at an average annual rate close to 5 per cent, industry close to 10 per cent and

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services at around 10 per cent during the period, indicating that the high growth

achieved was broad-based. This change was facilitated by a sharp rise in

investment rate in conjunction with robust consumption. The improvement in

important macro-economic coordinates has been evidenced by the facts that;

inflation remained moderate; fiscal consolidation proceeded apace; and external

sector remained robust during the period. Business and trade have acted as an

important facilitator in the process and also been a major beneficiary of the

improved outcome.

The global financial meltdown and the economic recession in developed

economies adversely affected the Indian economy. This resulted in a slowdown in

the rate of growth of the Indian economy from 9.2 per cent in 2007-08 to 6.7 per

cent in 2008-09. The slowdown of the Indian economy was of no surprise, with

most of the world in deep recession. What was a surprise was the speed and

vibrancy with which the Indian economy turned around. It is now widely

recognized that India was not only one of the economies least affected by the

global growth slowdown, but also one among the fastest to achieve a recoveryfrom the economic slowdown. The turnaround came in the second quarter of 2009-

10 with a growth of 8.6 per cent. According to the revised estimates, GDP at

factor cost at constant prices in the year 2009-10 has grown by 7.4 per cent, as

against 7.2 per cent in the Advance Estimates. The upward revision in the GDP

growth rate is mainly on account of the extra-ordinary buoyancy shown by the

industrial sector and the better-than-anticipated performance of the farm sector.

Trade and other services picked up, precipitating the on-ongoing economic

recovery.

As for international trade, in April 2010-11, exports grew by 36.2 per cent

compared to their level in April 2009-10. Exports witnessed a positive growth for



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the sixth consecutive month since November 2009. Imports have also picked up. In

April 2010-11, Indian imports were 43.3 per cent higher than their level April in

2009-10. Non-oil, non-bullion imports, which largely reflect the imports of capital

goods needed for industrial activity and imports needed for exports, were higher by

36.4 per cent in April 2010, compared to the corresponding period of the previous

year. This, coupled with the impressive growth in the domestic production of

capital goods, and the robust growth in capital formation in the recent quarters as

evident from the National Accounts, is indicative of the magnitude of capacity

addition taking place in the economy. Strong and sustained investment growth is a

pre-condition for sustained economic growth; so is the strength in the growth in

consumption, especially of the lower economic stratum.

Agriculture is the major driving force of Indian economy. It accounts for the

largest chunk of employment and gross domestic product, a source of raw material

for industry and a major source of foreign exchange earner at present and

potentially even more in the decades ahead. Domestic agriculture can substantially

contribute to the balance of overseas payments either by augmenting countriesexport earnings or by expanding the production of agricultural import substitutes

this is termed as foreign exchange contribution of agriculture. In countries with a

lagging agriculture sector and unmanageable food import bill, it would make

better economic sense to expand food production. But once domestic agriculture is

able to meet the basic requirements of domestic market; it may be a sound

policy to exchange agricultural exp through sectoral diversification orts either of

food or other agricultural products to increase the rate of development.

Trade in agricultural goods can play an important role in promoting

economic development especially in the less developed countries. The export of



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agricultural goods can pay for imports of capital goods, technologies,

manufactured products and other essential commodities for the sustained

growth of developing countries. Many developing countries have a

comparative advantage in the production of agricultural goods and export of

these goods is the main source of foreign exchange earnings. In an export

led growth model of trade it would be to the advantage of the developing

countries, to specialize in production of those goods where they have comparative

advantage and to exploit the surplus production to earn the valuable foreign

exchange. Such a policy will lead to the use trade as an engine of growth, as well

as in ensuring rational allocation of resources.

In, India ever since the planning has been used as a tool for rapid economic growth,

the development of agriculture is given due importance. The importance of

agriculture is felt not only in feeding additional mouths but also to earn

foreign exchange through exports. Strength and resilience are the hall mark of

Indias agriculture. Scarcity situation in many commodities ae over; and new

challenges are emerging from surplus.

India has a strong comparative advantage because of its very diverse agro-

climatic conditions ranging from arid to heavy rainfall areas. Most of the areas

have well distributed rainfall, sunshine and temperature conductive to the growth

of a very wide range of tropical, subtropic, and temperate al fruits, vegetables

and flowers. There are long uninterrupted Himalayan hilly region suitable for

temperate and nut crops like Apples, Pears, Peaches and Walnuts. It then gradually

descends forming sub-mountain regions and plains. There are also vast fertile plains

and savannas suitable for a wide variety of crops.



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Further Indias geographical situation gives it the unique advantage of being

at the center of most of the prosperous economies of the eastern world i.e,

middle east in the west and far east in east including countries like Iran, Iraq,

Japan, Singapore, Thailand Malaysia, Korea etc.This gives India the comparative

edge for linking these markets as the third country export center. W ith its

agricultural predominance, India occupies a special position in the

developing world and should take a leading role in creating a favorable atmosphere

for putting across the points of negotiation in favour of developing countries at the

WTO negotiation.

India exports more of horticultural crops, compare to agricultural

commodities. Horticulture crops includes fruits, vegetable, root and tuber

crops, mushroom, floriculture, medical and aromatic, nuts etc. This sector has

established its importance in improving land use, promoting crop diversification,

generating employment and above all providing nutritional security to the people.

Global Exports

The present total global exports are well over US$ 5000 billion. The share

of agricultural commodities accounts for US$300 billions (6.00 per cent). In

recent years, the share of agri-commodities has increased considerably,

mainly because the developing countries have realised the importance of export

to the development of their economy. There has been a great deal of interest

among the countries of the world to earn foreign exchange through export of

agricultural commodities. Agricultural and horticultural products have a

high-income elasticity. This situation makes developed countries to turn to

the developing countries to meet their demand. Therefore, developing countries

are accounting for a large share of the world trade in these commodities.



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The important developing countries viz., Argentina, Mexico, Morocco, China,

Philippines, Taiwan, Turkey, Brazil, Costa Rica, Thailand, Egypt and India

account for two-thirds of the total horticultural exports. Other countries are

also improving their export competitiveness.

Fruits comprise 61.00 per cent of the horticultural exports of the World and 70.00

per cent of it comes from the developing countries. There are as many as 80

different fruits and 65-70 types of vegetables traded in the world market.

Indias Export

Indian agriculture has a distinct position in the World agricultural production. It is

the second largest producer of Rice, Wheat, fruits and vegetables and the

largest producer of Milk. Still, in the world agricultural trade, its share is very

less. The share of Indian agriculture in the world export is less than one. Export of

agricultural products is an important component the countries agrarian scene. Its

present position in the Indian economy is quite significant as export contribute agreat deal to the development of an economy through the foreign exchange

earnings. Agricultural exports comprised about 30 percent of the total exports from

India during 1980-81 and the share dropped to 19 percent in 1990-91. Agricultural

exports in 1995-96 constitute 19.87 percent in the total exports from India

and this share has been decreased to 15.08 per cent in 1999-2000. In 2000-01

agricultural export constituted 14.10 percent in the total exports and this share

has been decreased to 10.4 percent in 2006-07.And this share has been increase

to 29 percent in 2009-10.



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Export Policy

Majority of the agricultural exports are unrestricted except some items, which

are regarded as essential and sensitive. For example, export of pulses and

sugar (excluding sugar that are subjected to a tariff rate quota in the United

States and the EC) were prohibited, to maintain domestic supplies of these

products in order to keep the price at a reasonable level. In order to boost the

agriculture exports government has set up Agri Export Zones. These zones

receive assistance from Central and State Governments to improve efficiencies

in supply chains of the identified products. Currently, there are over 60 Agri Export

Zones sanctioned by the Central Government and monitored by Agriculture and

Processed Food Products Export Development Authority (APEDA).However,

of the total investment of Rs.17.18 billion envisaged over 2002-10, just

around 50 percent has been realized Moreover, exports from these zones

during 2005-06, were around 43 percent of expected exports, in 2004,

Vishesh Krishi Upaj Yojana (special vegetable products scheme) was

introduced to promote exports of fruits, vegetables, flowers, minor forest

produce, dairy, poultry and their value added products.

India Trade: Market Share

A significant boost to Indias trade in the late twentieth century resulted in the

country getting the tag of an emerging economy. According to a report published

by the World Trade Organization (WTO) in May 2007, Indias share inthe global market for merchandise and services rose from 1.1% in 2004 to 1.5% in

2006. Commerce and Industry Minister Kamal Nath expects this figure to cross 2%

in 2009.

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According to leading management consultancy McKinsey & Co, the growth of

Indias economy can match that of China (about 10% per annum) if the former

eliminates the main impediments to trade.

India Trade: Exports

Indian exports comprise mainly of engineering and textile products, precious

stones, petroleum products, jewelry, sugar, steel chemicals, zinc and leather

products. Most of the exported goods are exempt from export duties. Duties are

levied on processed agricultural products, sheep, goat and bovine leather.

India also exports services to several countries, primarily to the US. In fact, India is

among the worlds largest exporters of services related to information and

communication technology (ICT). It is also the key destination for business

process outsourcing (BPO). According to the Information Economy Report 2007-

2008, the ICT industry accounted for 5.4% of Indias GDP in 2006, up from 4.8%

in 2005. Backed by ICT-related exports, the services sectoraccounted for 37% of

the countrys total exports in 2006, up from 18% in 1995.

Foreign Trade Policy ( Exim-Policy )

Foreign Trade has gained immense importance in India in the recent years. The

export import (exim) policy of India has laid guidelines for India to become a

major player in world trade, an all encompassing; comprehensive view needs to be

taken for the overall development of the countrys foreign trade. The new exim

policy states that reasonableness and consistency among trade and other economic

policies is important for maximizing the contribution of such policies to

development. The foreign trade policy implies in its preamble that while

incorporating the existing practice of enunciating an annual exim policy, it is

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necessary to go much beyond and take an integrated approach to the

developmental requirements of Indias foreign trade.

Majority of the agricultural exports are unrestricted except some items,

which are regarded as essential and sensitive. For example, export of pulses

and sugar (excluding sugar that are subjected to a tariff rate quota in the

United States and the EC) were prohibited, to maintain domestic supplies of

these products in order to keep the price at a reasonable level. In order to boost

the agriculture exports government has set up Agri Export Zones. These zones

receive assistance from Central and State Governments to improve efficiencies

in supply chains of the identified products. Currently, there are over 60 Agri Export

Zones sanctioned by the Central Government and monitored by Agriculture and

Processed Food Products Export Development Authority (APEDA).However,

of the total investment of Rs.17.18 billion envisaged over 2002-10, just

around 50 percent has been realized Moreover, exports from these zones

during 2005-06, were around 43 percent of expected exports, in 2004,

Vishesh Krishi Upaj Yojana (special vegetable products scheme) was

introduced to promote exports of fruits, vegetables, flowers, minor forest

produce, dairy, poultry and their value added products.

EXPORT TRADE PROCEDURE AND RELATED ISSUE

Select a quality product based on the export potential and demand

Select a particular overseas market.

Concentrate only on few products and minimum three countries, if you are a

beginner.



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Ensure that you can manufacture or procure from other sources the selected

product(s) at the competitive prices and in sufficient quantity and will be

able to meet the quality specifications, delivery schedule and other terms and

conditions of the overseas buyer.

Get the full information of similar products of other manufacturers if already

available in selected markets, their prices, marketing techniques, terms of

business etc. To offer your product(s) to foreign buyers with a bargaining

edge in order to capture the market.

Assess the degree of competition of product (s) which you propose to export

in a particular market.

FACTORS GOVERNING THE FOREIGN TRADE INDUSTRY

The most eminent factors governing the international trade industry are:

Trade blocs: These are created by multinational agreements to promote trade

between two regions through mutual cooperation. Often, trade blocs are

characterized by free trade agreements (FTAs) which tend to eliminate tariff and

non-tariff barriers. Some of the largest trade blocs are NAFTA (North American

Free Trade Agreement), EUCU (European Union Customs Union) and DR-

CAFTA (Dominican Republic Central America Free Trade Agreement).

International trade organizations: The World Trade Organization (WTO) is the

most notable private organization that regulates trade among member nations. With

153 member nations, it represents over 95% of international trade. The

International Monetary Fund (IMF) is another such organization influencing the

trade industry through its policies.



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With the opening up of new trade avenues worldwide, foreign trade is expected to

greatly influence international economics and politics.

TRADE BARRIERS

Trade barriers refer to government-imposed policies to restrict international trade.

Most commonly, a countrys government employs tariffs, duties, embargoes and

subsidies as trade barriers. However, imposing trade barriers are against the

concept of free trade, popularized by developed nations

UNDERSTANDING TRADE BARRIERS

Almost every trade barrier works as a tool to ensure a protectionism policy. Trade

barriers aim to hike the prices of imported products in order to secure the domestic

industry against fierce competition from foreign products. Some of the most

common trade barriers are:

Tariffs: Taxes levied on products that are traded across borders are called tariffs.

However, governments impose tariffs essentially on imports and not on exports.Two most popular types of tariffs are:

Ad valorem: This tariff involves a set percentage of the price of the imported

goods.

Specific: This refers to a specific amount charged by the government on import of

goods.

Subsidies: Subsidies work to foster export by providing financial assistance to

locally-manufactured goods. Subsidies help to either sustain economic activities

that face losses or reduce the net price of production.

Quotas: Import quotas are the trade limits set by the government to restrict the

quantity of imports during a specified period of time.



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Embargo: This is an extreme form of trade barrier. Embargoes prohibit import

from a particular country as a part of the foreign policy. In the modern world,

embargoes are imposed during wartimes or due to severe failure of diplomatic

relations.

ECONOMIC IMPACT OF TRADE BARRIERS

In times of flourishing international trade, imposing trade barriers prevents the

nation from fully realizing the economic benefits of such globalized trade. A

protectionism regime causes over-allocation of resources in the protected sector

and exploitation or under-allocation of resources in free trade sectors. This usually

leads the country into economic disequilibrium, which hampers growth.

Import restrictions affect international trade relations, which in turn leads to a

decline in exports. Thus, the protectionism regime that is employed to protect

certain sectors actually tends to retard the growth of the entire economy.

Free trade environments offer greater and better choices in the market, leading to

enhanced consumer satisfaction. With trade barriers in place, the government curbs

consumer rights to enjoy competition in the market.

Exports of goods from one country to another involve the participation of customs

authorities of both the countries. It also includes those countries through which the

goods pass through. Exporting goods and services to other countries is a key part

of a countrys economic development, focusing either on raw materials, finished

goods or services based on available resources. Export trade helps to create more

jobs and boost a countrys economic growth.

EXPORT TRADE: DYNAMICS



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A firm exporting goods and services to other countries requires an exports license

from the countrys licensing authority. In the US, Exports Administration

Regulations (EAR) controls the export of goods. The goods or services to be

exported are categorized into various sections across the countries, and the

exporter needs to select the appropriate category for the item to be exported.

Exports across the globe are regulated. However, each country may follow

different regulations. Exports are typically restricted to countries that are suspected

of supporting or participating in terrorist activities. Some products have a global

exports restriction.

EXPORTS: TARIFFS AND DUTIES

Tariffs or duties are taxes levied on the goods transported across the country of

origin or other political boundary. These tariffs act as a trade barrier and are used

for protecting a companys economy.

The different types of tariffs are:

Ad valorem tariff: This tariff is a specific percentage of the value of a good being

exported.

Specific tariff: This is the fixed tariff that does not change with the market value of

a specific good.

Revenue tariff: The very purpose of this tariff is to raise money for the government

that allows the business.

Many countries negotiated bilateral or multi-party Free Trade Agreements (FTAs)

to reduce or eliminate tariffs or duties between them, for specific sectors or in all

categories. Although this may reduce the immediate income generated by the

government, it will increase total economic activity in all involved countries.



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Additional measures help, such as identifying and removing internal constraints

like bureaucratic red tape and fiscal duties.

PROCEDURE FOR BECOMING AN EXPORTER

To apply for an import export code with the concerned office of the joint

director general of foreign trade with all the particulars and necessary fees in

this regard.

To find out the particular market and select a quality product and quote the

prices in u.s. dollars which is an universally accepted currency for all import

export trade. The prices may be quoted as under:-

F.O.B: it means free on board the delivery of the cargo is given till the

same is loaded on to the vessel. All future expenses like freight, insurance

will be to the account of the buyer.

C & F: It means cost & freight. The price includes even the freight charges

till the destination. The buyer has to bear only the insurance and other

delivery charges etc at the port of destination.

C I F : it means cost, insurance and freight. The price includes all expenses

till the port of destination.

Once the price is acceptable to the buyer, he will immediately open the letter

of credit or will send an advance remittance through the banking channels to

the sellers account.

The letter of credit should be always in the form of irrevocable and sight

letter of credit.

Once the lC is opened the seller has to prepare the cargo as per the quality,

packing specifications mentioned in the lC and send the same to the port of



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loading so that the C&F (clearing and forwarding) agent will do the rest of

forwarding the consignment to the buyer.

Once the shipment is over C&F agent will prepare all the shipping

documents called for in the lC.

Once these original shipping documents are received, seller has to prepare

his commercial invoice, packing list, bills of exchange and submit all the

documents along with the original lC received from the buyer to the bank for

negotiation.

The banker will thoroughly scrutinize the documents strictly as per the terms

and conditions of the lC and give credit to the sellers account and send the

documents to buyers bankers for getting the payment. Normally the

payment is received within 10-15 days time.

In addition to l/C and advance remittance, the payments can be in the form

of D.P (documents against payment) at sight which means exporter will ship

the material and send all the original shipping documents through his bank

to the buyers bank. Buyers bank will collect the money from the buyer andrelease the documents to him and send proceeds to Indian exporter through

the banking channels.

In case of perishable commodities, no buyer will open l/c, send advance

remittance or even agree for D.P terms on a pre agreed price. It is all done

on consignment sale basis. Exporter will ship the material and send the

original documents to the buyer and the buyer in some cases may send some

part payment as advance and the final account will be settled only against

the sale of exported cargo.

THE ROLE OF E.C.G.C. ( EXPORT CREDIT GUARANTEE CORPN OF

INDIA LTD). In order to offset the exporter against unforeseen



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circumstances in exports, ECGC plays an important role. ECGC covers

various types of risks such as default by importer or the country, non receipt

of payment due to wars, riots etc and charge a nominal premium for this

based on the country classification ( eg. 0.3% to 0.8% of the value). ECGC

also helps an exporter in assessing the credit worthiness of the importer and

will fix the credit limit accordingly. This will help an exporter to expose his

risks only to that extent.

INDIAS REFORM AS IT ADAPTS TO GLOBAL TRADE

COMPETITION

The export laws of India are governed by the foreign trade policy. All

exporters/importers trading from India have to adhere to the foreign exim policies

in order to gain benefits on the trade front.

Indias liberalizing policy, as well as significant structural and trade reform have

clearly paid off, since Indian economic performances are distinctly impressive these

days. Since the liberalization process began in 1991, India's real Gross Domestic

Product (GDP) has grown at an average annual rate of approximately 6% and,

despite the recent increase in international petroleum prices, GDP growth for

2006/07 was 9%. Services continue to be the largest contributor to GDP (over54%

in 2005/06), while the share of manufacturing has remained respectively stable, at

around 16% of GDP, and agricultures share has decline to around 18.3% of GDP

in 2006. These good economic results are due to important unilateral reforms aimed

at opening up Indian economy and trade .

India Trade: Critical Ports

Ports that are critical to Indias trade are:



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Alang (Gujrat)

Beypore (Kerala)

0Kalicut (Kerala)

Goa

Mumbai

Chennai and Ennore (Chennai)

1.2 THEORITICAL LITERATURE

With a view to evaluate the objectives of the study. It was considereddesirable to have idea of the findings of some of the earlier research studies

and the method adopted therein. Such review of literature connected with the

working and performance of Karnataka State Agriculture Produce Processing

and Export Corporation Limited (KAPPEC) in Karnataka. It was hoped would

provide a basis either for confirming the earlier findings for contradicting them

and there by suggest points of departure for further studies.

To give a view full of the export affairs of the undertaking it is necessary to include

a annual report, a statement of changes in the export of the different products

exported by KAPPEC LTD.

An export reportor exports analysis is an in-depth evaluation of a countrys export

statistics so that its economic planners or policymakers can devise policy changes.

These policy changes are required to speed up a countrys economic growth. Areas

of concern such as anti dumping measures, tariff peaks and targeted subsidies may

also be analyzed in detail Exports analysis can be performed by businesses or

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countries to enhance their growth prospects. A detailed export review can help

devise future-oriented export growth plans. The objective is to increase trade and

profits.

Analysis of Exports Statistics

Today, most exports analyses are conducted using reflective indicators. However,

researchers have begun to advocate the use of formative indicators as a basis for

export performance analysis. Formative indicators refer to exploring the causal

indicators, rather than the effect indicators.

Countries can utilize export reports to perk up their trade policies andprograms. In

2008, when Australia released a review of its export policies and programs, it

outlined around 70 recommendations as part of its export promotion and trade and

investment policy. A textile exports analysis of China reveals that the country

continues to make its mark in the world textile market, since the removal of the

quota regime in 1994.

Countries frame their new policies and programs based on the results of the long-

term and short-term export reports. These statistics are a result of comprehensive

study of exports, which is conducted by using both objective and subjective

measures.

However, the fact remains that export review results may vary, depending on the

export data source used. Export data may be obtained from two different sources,

such as the International Monetary Fund and the UN Commodity Trade Statistics.

When the facts and figures from the two sources are dissimilar, it may yield

incongruent results. This difference in data source also affects export-led growth

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models. Hence, researchers agree on the point that data can be neither interchanged

nor correlated.

Overall, export reports benefit countries and their efforts to formulate their overall

export-oriented development strategy.

Techniques used in export analysis

The data received are tabulated and analyzes for logical statement using statistical .

Methods like tally, trend, mean, etc.

Tally : Tally marks, or hash marks, are a unary numeral system. They are a form

ofnumeral used forcounting. They allow updating written intermediate results

without erasing or discarding anything written down. However, because of the

length of large numbers, tallies are not commonly used for static text.

GRAPH : Graph is an abstract representation of a set of objects where some pairs

of the objects are connected by links. The interconnected objects are represented

by mathematical abstractions called vertices, and the links that connect some pairs

of vertices are called edges. Typically, a graph is depicted in diagrammatic form as

a set of dots for the vertices, joined by lines or curves for the edges. Graphs are one

of the objects of study indiscrete mathematics.

TREND ANALYSIS :Trend analysis involves the usage of past figures for

comparison. Trend percentages are calculated for some important items like sales

revenue, net income etc. Under this kind of analysis, information for a number ofyears is taken up and one year, which is usually the first year, is taken as the base

year. Each item of the base year is taken as 100 and on that base, the percentage for

other years are computed. This analysis will help in finding out the percentage of

increase or decrease in each item with respect to the base year.

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1.3 CURRENT ISSUES

The government of India, in latest budget proposal (2011), has allocated Rs14,744

crore for agriculture and allied sectors , an increase of 2.6% over last year.

The rural economy employs about 60% of Indian work force, contributing about

17% of gross domestic product, and is expected to post 5.4% growth over last year,

according to advanced estimates by the annual Economic Survey.

Finance Minister Mr. Pranab Mukherjee said removing production and distribution

bottlenecks for fruits, vegetables, milk, meat, poultry and fish the key drivers of

food inflation would occupy his attention.

The focus of most of his initiatives seem to be in strengthening existing

programmes rather than creating new avenues of budgetary support.

For instance, the Rashtriya Krishi Vikas Yojana, an initiative to help farmers bring

their produce to the market, received an extra Rs. 1,000 crore, or about 16%, over

last year.

Mukherjee has hiked interest rate subvention a scheme in which banks provide

short-term crop loans to farmers at 7% interest by one percentage point . This, he

said, would also push banks to disburse Rs. 4.75 trillion, a nearly 25% jump from

last year.

Mukherjee also emphasized that enhancing the nutritive value of agriculture



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produce was as important as increasing farm production.

While we ensure food for all, we also must promote balanced nutrition. Bajra,

jowar, ragi and other millets are highly nutritious and known to possess several

medicinal properties, he said in his budget speech. The minister provided Rs300

crore to encourage farmers to intensify production of these crops.

Among the few new initiative again with a focus on improving the nutritive quality

of food was a National Mission for Protein Supplements to be launched later this

year. Its primary focus, the finance minister said, would be to promote animal-

based protein production through livestock development, dairy farming, goat

rearing and fisheries in selected agricultural blocks.

To be sure, some analysts said the plans for agriculture were insipid and left out

key issues, such as employment.

It's a disappointing budget in relation to what the Economic Survey has projected

in the agricultural sector, said M.S. Swaminathan, agriculture scientist and a Rajya

Sabha member. There is no particular vision and no strategy to make agriculture an

attractive option for youngsters

1.4.1Prices of Vegetable Products Rising Despite Higher Production

Supply demand equation seemingly do not influence Indian markets dominated by

layers of middlemen and scary government policy. Agricultural commodities ,

including fruits and vegetable are major victim of a slew of govt regulations on

movement and pricing that has created layers of middlemen over the years.

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Production of vegetables have risen considerably over last 5 years. Even after

taking note of population growth - its impossible to explain huge increase

in vegetableprices over last few months.

During April' 2010 a kg each of brinjal, cabbage, onion, potato and tomato totally

cost Rs 26.38 if you bought at the Azadpur mandi in Delhi. Today, if you buy the

same, that will cost you Rs 69.36.

In the Wholesale Price Index that is used as a measure of inflation, vegetables

index has increased to 273 from 143.9 in April. Since April 2006, there has been a

315 per cent jump in the index.

Though prices have gone up, a look at the Agriculture Ministry data show that the

acreage, production and yield of key vegetables such as potato, onion, tomato,

cabbage and brinjal (the top five) have actually gone up since the season starting

July 2006. In fact, vegetables have seen a compounded annual growth rate

(CAGR) of 1.73 per cent in acreage, 3.93 per cent in production and 2.15 per cent

in yield.

Among these, the CAGR of potato is 7.07 per cent, while it is 7.18 per cent for

cabbage. The CAGR of potato yield is also higher than other vegetables at 5.27 per

cent, while onion's is next at 3.98 per cent.

Between 2006 and 2010, for which data are available, coverage of potato increased

from 1.74 million hectares (mh) to 1.89 mh, while production was up from 28.59

million tonnes (mt) to a record 40.23 mt with yield rising from 16.43 tonnes a

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hectare to 21.24 tonnes. Prices during the same time increased from Rs 500 a

quintal in July 2006 to Rs 842 on June 30, 2010 at the Azadpur mandi. Currently, it

is quoted at Rs 425.

In the case of onion, the area has remained stagnant at 0.76 mt, while production

and yield have increased to 13.05 mt (10.84 mt) and 14.12 tonnes a hectare

(17.16). Onion prices during the current season (July 2010-June 2011) are

averaging at Rs 27.66 a kg from Rs 10.25 during 2009-10. In 2006-07, it averaged

Rs 6.52 to rise to Rs 7.40 the next year and to Rs 8.88 in 2008-09.

Data are available only until June 2009 for other vegetables and in the case of

brinjal and cabbage, prices dropped while for tomato, they have increased.

Currently, prices of all these are much higher.

Among all the vegetables, potato has seen the minimum surge. In fact, during May

last, prices dropped sharply to below Rs 300 a quintal on increased arrivals before

the West Bengal Government intervened to procure nearly one million tonnesto

save farmers.

Besides, prices for foodgrains have increased sharply in the last couple of years

with the Centre raising the minimum support price (MSP) for most crops. For

example, the MSP of wheat has been raised from Rs 850 a quintal in 2006-07 to Rs

1,100 this year.

Between 2006 and 2010, the population has increased 70 million to 1.15 billion at

a CAGR of 1.57 per cent, while the per capita income from 2005-06 to the last



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fiscal increased Rs 7,594 to Rs 33,540, a CAGR of 5.55 per cent.

1.4.2 Exports Rise During First Half of Current Fiscal Year

Indian spice exportershave recorded an impressive 16 percent growth in export of

all varieties of spices in value terms during April to Dec 2010. In volume terms -

the growth is marginal at 3 percent.

Value of total spices exports have gone up to Rs 4,880.56 crore over Rs 4222.56

crore achieved during same period last year. The increase in the total value

realisation was mainly driven by a spurt in the price of spices in the global

markets.

A notable achievement of the period was that spices exports topped the billion-

dollar mark in the first nine months of this fiscal. Mint and mint product exports as

well as spice oils and oleoresins continued to contribute significantly to the spices

export basket in value. The rally in unit value realisation of these two pillars of

spices exports ensured that spices exports crossed the billion-dollar mark.

Although mint and mint products were down by 12 per cent in volume during

April-December 2010, the 29-per-cent growth in unit value realisation from Rs 614

to Rs 896 this year ensured that the total value realisation spurted up. For spice oils

and oleoresins, the marginal 1-per-cent spurt in volumes was accompanied by a 17

per cent growth in unit value realisation taking the total value realisation to Rs

641.39 crore (Rs 546.76 crore). Spice oils and oleoresins as well as mint and mint

products together accounted for close to 50 per cent of the total value realisation

from spices exports.

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During April-December 2010 exports of chilly, ginger, fennel and garlic showed

an increase in volume as well as value. But spices like tamarind and asafoetida

could register growth only in value. Others like mustard, aniseed, ajwanseed,

nutmeg and mace showed a decline in both volume and value during the period.

While pepper exports stagnated in value in the global markets for several years,

firm price trends were evident during the last couple of months. The unit value of

pepper exports have increased from Rs 157.71 a kg last year to Rs 190.18 a kg this

year. Chilly is another prominent export item in both volume and value. Chilly

exports increased by 22 per cent in volume to 1.79 lakh tonnes (1.47 lakh tonnes),

even as the total value realisation grew by 17 per cent to Rs 1,108.92 crore (Rs

946.49 crore).

The spices board has set an export target of 4.65 lakh tonnes, valued at Rs 5,100

crore for this fiscal. The foreign exchange target is pegged at $1,125 million. By

December 2010 the country achieved 84 per cent of the targeted volume, 96 per

cent of the targeted value and 95 per cent of the foreign exchange target.

1.4.3 Turmeric Prices Decline - Severe Cold Pushing Down

Turmeric Demand

Severe cold in North India is keeping traders inactive, leading to fall in

spot turmericprices below Rs 16,000 a quintal.

On January 10 2011, about one hundred bags of fresh Mysore variety turmeric

arrived in Erode market for sale. However, it failed to fetch price beyond Rs

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14,200 a quintal, much lower than farmer's expectation. Traders are also buying

limited stocks. Farmers have sold most of their stocks, expecting further decrease

in price for the fresh crop that will arrive in the market in the middle of February,

as the cultivated area is almost double this year.

At the Erode Turmeric Merchants Association sales yard, the turmeric finger

varietyfetched Rs 9,299-15,939 a quintal and the root variety Rs 9,000-16,069.

Out of 1073 bags that arrived in the market, 415 were sold. At the

Gobichettipalayam Agricultural Cooperative Marketing Society, the finger variety

sold at Rs 14,827-15,997 a quintal, the root variety Rs 14,737-15,831. Of 173 bags

that arrived, 143 were sold. At the Erode Cooperative Marketing Society, the

finger variety sold at Rs 15,650-16,050, the root variety Rs 15,639-16,010. Of 504

bags kept for sale, 400 were sold. At the Regulated Marketing Committee, the

finger variety sold at Rs 15,489-15,949. The root variety Rs 15,293-15,809. Of 634

bags that arrived, 585 were sold.

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INTRODUCTION TO THE STUDY

TITLE OF THE STUDY

A STUDY ON EXPORT ANALYSIS OF DIFFERENT PRODUCTS

TOWARDS PROCESSING AND EXPORT INDUSTRY WITH SPECIAL

REFFERENCE TO KARNATAKA STATE AGRICULTURAL PRODUCEPROCESSING AND EXPORT CORPORATION LIMITED

2.1 STATEMENT OF THE PROBLEM

This topic is selected to analyze the export analysis of the company which has

shown a growth steady pace of increased profit and turnover in recent year. The

study is to be conducted to evaluate the different products toward export industry

and analyze the different products in order to give a better scope to the

management themselves about the rating of the company and its performance in

the export industry.

2.2 OBJECTIVES OF THE STUDY

To evaluate the export competitiveness of the organization.

To evaluate the market position of the organization.

To help in the market research.



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To show the company market strength.

2.3 SCOPE OF STUDY

Agriculture is the main occupation in most of the developing countries.

Export increases the income of the country.

In the context of globalization management of agricultural export assumes

importance.

Indias share in world export was less than one percent.

2.4 NEED OF THE STUDY

Any company would like to know its position against its competitor. The ultimate

performance indicator of the company is the financial parameters because

invariably all cost efficiencies, activity and position of the company will be reflect

through export analysis.

The followings are stated as the need for the study:

To understand the volume of export and its reasonableness.

To understand the movement of export over a period of time.

To know the reason for the variation in the export of different products.

To know the present standing of the company.



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RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

Research is a fact finding investigation with adequate interpretation.

The data serves as the bases for analysis. Without an analysis of factual data no

specific inferences can be drawn on the questions under study. Inferences based onimagination or guesswork cannot provide correct answers to research questions.

The relevance, adequacy and reliability of data determine the quality of a study.

For the purpose of this present study data from two sources collected namely

primary and secondary data have to be gathered.

Research designs used in the specific study includes the followings:

Identification the statement of problem.

Collection of companys specific literature i.e. annual report for the study

period and profile of the company.

Scanning through standard book to understand the theory behind the export

analysis.

Collection of information from various journals to understands the industrial

background of the study.

Study period in this case is 4 years i.e. from 2006 to 2010



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3.2 SOURCES OF DATA

Data refers to the facts, figures and other relevant materials, past & present,

serving as basis for they study & analysis. The sources of data are varied. It

depends upon the nature of the study.

Data can be distinguished as:

(a) Primary Data

(b) Secondary Data

Primary DataPrimary data that will be used in the project is the direct interview made with the

finance manager of KAPPEC LTD.

Secondary Data

Secondary data will be collected from the financial reports issued by the company.

Much information will be collected from companies website where the financial

report is published and some information from newspaper and magazines.

This is related to collect the required information about the study. My source of

information is the data available with the company by ongoing through the annual

reports. The study basically relies on secondary data supplied by the company. The

primary data used for this study consists of informal discussion, interview with the

finance manager of the company.

3.3 LIMITATIONS OF STUDY

This study like any other research inherits certain limitations. Some of them are:



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The time period was very less.

The study is limited to Bangalore City only .

Getting accurate information regarding the export status is very difficult.

As the recovery from recession is at its peak, proper analysis is hard to do.

3.4 PLAN OF ANALYSIS

The data received are tabulated and analyzes for logical statement using statistical.

Methods like tally ,trend analysis, mean, average etc.

Most of analyzed data are converted to percentage to facilitate easily interpretation

of data and the same is analyzed and interpreted in the form of table and

represented in the form of graph.

3.5 CHAPTER SCHEME

GENERAL INTRODUCTION

The chapter gives an overview of the export industry. This chapter includes an

introduction to the broad area of the topic chosen, specific area of topic chosen,

introduction to the topic itself and an overview of the industry in general.

INTRODUCTION TO STUDY

This chapter gives a plan of the study which includes title of the study, statement

of the problem, objective of the study, scope of the study, need for the study,

review of literature and expected contribution of the study.

RESEARCH METHODOLOGY



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This chapter provides design of the study which includes research design, source of

data collection, and limitation of the study of analysis and chapter scheme.

PROFILE OF COMPANY

This chapter provides detailed information about the company and its products.

DATA ANALYSIS AND INTERPRETATION

This chapter provides an analysis of the data with interpretation along with graphs

showing changes in export products.

FINDINGS

This chapter provides general finding of the study.

RECOMMENDATION AND CONCLUSIONS

This chapter offers recommendations based on the finding and overall conclusions

of the study.

ANNEXURE

It consists of data which are collected.

BIBILOGRAPHY

It consists of various books and journals referred for the study.



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COMPANY PROFILE

ORIGIN OF THE COMPANY

As per the recommendations of the Agriculture Policy of the state to develop and

promote the production, processing and export of agriculture, horticulture and

floriculture products, government has established Karnataka State AgriculturalProduce Processing and Export Corporation Limited (KAPPEC) on 22nd April

1996.The main aim of the KAPPEC is to develop and promote the export of

agricultural, horticultural and floricultural products. Since inception till 31-12-

2010, KAPPEC has handled about 532543 metric tonnes of agricultural and

horticultural commodities valued at Rs 91580 lakhs. In addition to grapes,

KAPPEC has also exported Mangoes, Pomegranates, Drumstick, Watermelon, Red

split lentils, Niger seeds, Menthe seeds, Coconuts, Onions, Potato, Chillies, Garlic,

Coriander, and Turmeric to USA, U.K., Singapore, Srilanka, Malaysia, Middle-

East, Turkey, Australia, Netherlands, Mexico, Brazil etc.

The main obstacles and hindrances for development of horticulture are as

under:-

Low productivity per unit area.

Subdivision and fragmented land holdings because of which mechanised

cultivation is not possible.



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Inadequate post-harvest infrastructure facilities like procurement centres,

grading, washing, waxing, packing units, refrigerated transport, pre-

cooling and cold storages, intermediate cold storages, processing units

and export house.

These products are seasonal in nature and the season is so short that the

entire produce enters the market at a time which makes the market to

collapse and the farmers are not getting remunerative prices.

To overcome these problems in the interest of the farmers and as per the

recommendations of the agricultural policy of the state and to develop and promotethe production, processing and export of agriculture, horticulture and floriculture

products, Government has established Karnataka State Agricultural Produce

Processing and Export Corporation Limited (KAPPEC)on 22nd April 1996.

ACTIVITIES

Procurement, Processing and export of variety of agriculture and horticulture

commodities.

Exported Mangoes, Pomegranates, Grapes, Drumsticks, Watermelon, Red

split lentils, Niger seeds, Coconuts, Onion, Potato, Chillies, Garlic,

Coriander, Sugar and other fruits and vegetables to Singapore, Srilanka,

Middle East, U.S.A, Kuwait, Egypt, Saudi Arabia, Mexico, Turkey,

Maldives, Mauritius, Europe etc.



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Signed MOU with University of Agricultural Sciences, Bangalore for

Development of high yielding Lustrous and Bold seeded varieties with high

oil content in Niger seeds.

Procurement of good quality Agri found variety of Bangalore Rose Onion

and Agri Found Light red onion seeds from The National Horticultural

Research & Development Foundation and distribution to farmers of the

State.

Creation of awareness among the farmers about growing export quality

produce. KAPPEC in consultation with the scientists of IIHR, UAS,Bangalore and the senior officials of Department of Horticulture had

organized seminars, workshops, and study tours in the growing areas of

grapes, Mango, Bangalore Rose Onion, and Pomegranates etc for the benefit

of farmers.

Published a booklet titled package of practices for growing export quality

grapes with the assistance from the senior scientists at IIHR and distributed

to grape growers/ Growers Association in Bijapur.

Active involvement in the activities of the WTO cell established by Govt. of

Karnataka.

Assisting and guiding the budding entrepreneurs for undertaking exports of

agriculture and horticulture commodities from Karnataka.

Published a booklet titled package of practices for growing export quality

Bangalore Rose Onion with the assistance from scientists at IIHR and

distributed to farmers.



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Acting as the nodal agency for the implementation of Agri Export Zone for

Gherkins and Bangalore Rose Onion in Karnataka.

Acting as one of the State Trading Enterprises (canalizing Agency)

appointed by the Govt. of India for the export of all varieties of onions from

India.

Involved in the creation of post harvest infrastructure facilities in various

parts of State in a phased manner to facilitate the export of agriculture and

horticulture exports.

Encouraging joint ventures under Public Private Partnerships (PPP model)

for the processing and value addition to agriculture and horticulture produce

for the benefit of farmers.

Participating in domestic and international exhibitions to showcase the

potential of agriculture and horticulture commodities of Karnataka to

increase exports.

FUTURE PLANS AND PROGRAMMES OF KAPPEC

Plans to enhance the trading both in domestic as well as overseas markets

for the benefit of farmers to help them to realise a fair return for their

produce of kappec.

Plans to create post-harvest infrastructure facilities like pack house, pre-

cooling unit, cold storage, processing unit, quality control labs &

refrigerated transport etc., in potential areas in a phased manner. Already



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one such project with a financial implication of about Rs.300 lakhs has

been implemented at Bijapur.

Plans to enter into joint venture participation with private sector for

the development and increase of agriculture and horticulture exports from

the state.

To make available quality Bangalore rose onion seeds at reasonable

prices to farmers in order to raise production, productivity and quality of

this variety of onion. KAPPEC has already procured certified quality

Bangalore rose onion seeds from the national horticultural research

development foundation, Nashik and has distributed to farmers.

To conduct seminars, symposiums, training programmes for the benefit of

farmers in order to create awareness among them about the package of

practices to be followed in the area of pre and post harvest management.

To participate in the international & domestic fairs and exhibitions to

increase the demand for agriculture and horticulture commodities grown

in Karnataka Government vide order

NO.AHD:88:HPP:2006 Dated 23rd January 2007 has released Rs.10 crores

to KAPPEC for creating post harvest infrastructure facilities like pack house,

pre-cooling unit, cold storage, processing unit, quality control labs &

refrigerated transport etc., in potential areas in a phased manner.



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ACTION PLAN FOR CREATING INFRASTRUCTURE

FACILITY

Government of Karnataka in the budget 2006-07 has sanctioned an amount of

Rs.10 Crores to the company for creating necessary post harvest infrastructure

facilities in different parts of the state based on potential in a phased manner. The

company has already received and initiated action in this connection. The details

are as under:-

Creation of an integrated cold chain complex consisting of receiving centre,

washing, waxing, grading line, pack house, pre cooling units, cold storages

and also a laboratory for the export of grapes, pomegranates and other

horticulture produce from Kushtagi and surrounding areas in Koppal district.

Land has already been purchased from KIADB. The project proposal with a

financial implication of Rs. 833.05 Lakhs has already been prepared and sent

to APEDA and NHM for funding under their respective financial assistance

schemes.

An IQF unit mooted by M/S. Tropicool Foods Pvt Ltd in Hubli with the

equity participation under Public Private Partnership (PPP) model from a

leading horticulture produce exporter.based in Hubli for the value addition to

the horticulture produce grown by farmers of the area. The project report

with a total financial implication of Rs.1058 Lakhs has already been

prepared and sent to ASIDE and NHM for funding under their various

schemes. The proposal of KAPPEC for taking part in the equity to an extent

of 26% (Rs.78/- lakhs) has been sent to Government for approval.



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ACTION PLAN FOR MARKETING

As explained above, the company is engaged mainly in the back to back trading of

commodities by insulating the risk of market fluctuations and incurring losses in

trading due to volatile market conditions exist in commodity trading. During the

year 2006-2007 the company has achieved a turnover of Rs.1324 Lakhs by trading

in 9772 Mts. of Commodities like Onions, potatoes, turmeric powder, variety of

fruits and vegetables etc to countries like Mauritius, Maldives. Based on this

experience and also to add more and more commodities to the existing list we

propose to undertake the trading as under:-

Commodity Qty in Mts.

Onions 8000

Potatoes 2000

Turmeric Powder 100

Chillies 100

Dried Grapes 50Fruits & Vegetables 10

PLAN FOR COLD CHAIN EXPANSION

The Karnataka State Agricultural Produce Processing & Export Corporation

Limited (Kappec) is setting up three cold storage units in Hubli, Bidar and

Bagalkot for an investment of Rs 31 crore.

The corporation has been sanctioned a financial assistance for its Hubli and

Bagalkot plants under the Assistance to States for Developing Export

Infrastructure and Allied Activities (ASIDE) scheme of the Union ministry of



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commerce. The Bidar facility will be set up with assistance from the Agricultural

& Processed Food Products Export Development Authority (APEDA), a top

official of Kappec said.

We have been sanctioned 80 per cent of the funds under the ASIDE scheme,

while the balance 20 per cent will be invested from our own funds for the Hubli

and Bagalkot facilities. The construction will be taken up by Kappec and the

management will be given to the private companies, K J Devendrappa, managing

director, Kappec told Business Standard.

Kappec is planning to construct a pack house with grading cooling line, pre-cooling units, commercial cold rooms of 2,000 tonnes and reefer vans apart from

ripening chambers, among others at Amargol in Hubli. A similar infrastructure

with a capacity for 1,500 tonnes for pomegranate packaging units would be set up

at Bagalkot, he said.

Karnataka produces 13.02 million tonnes of horticulture produce, which accounts

for 7 per cent of the countrys production. Of this, fruit production accounts for

4.73 million tonnes, vegetables account for 7 million tonnes, 600,000 tonnes of

spices, 469,000 tonnes of plantation crops.

There is an estimated loss of 30-40 per cent of fruits and vegetables due to the

non-availability of proper storage facility at the farm level before taking it to the

market, Devendrappa said.

Karnataka exported agriculture and horticulture products worth Rs 4,371 crore in

2008-2009, which includes coffee, cashew, agriculture and processed food, spices,

gherkin, Bangalore rose onion, silk products and flowers.



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In order to increase exports and to reduce the post-harvest losses of fruits and

vegetables in the state Kappec has been improving the cold chain infrastructure

like integrated cold storages in Karnataka with the assistance from Central and

state governments.

With the assistance from APEDA, Kappec is also setting up an integrated cold

storage at Humnabad of Bidar district for increasing exports of fruits from Bidar

district. The facility will be set up at an investment of Rs 6.5 crore from APEDA

and Rs 1.5 crore from Kappec, Devendrappa said.

Bidar produces 36,941 tonne of fruits and produces 121,028 tonnes of vegetableslike tomato, cabbage, onion and cauliflower.

The facility includes components like pack house, washing, grading and waxing

line, pre-cooling units, export cold rooms, commercial cold storage and reefer van.

The project could increase exports of grapes and pomegranates by about 500

tonnes. It would create employment to about 100 persons at the factory and more

than 1,000 persons at the farm level.

It will also help in bringing contract farming for backward linkages.

ACTION PLAN FOR PROMOTIONAL ACTIVITIES

The company proposes to undertake the following promotional activities for the

development of trading (both domestic as well as exports) of agriculture and

horticulture commodities :-



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Procurement and supply of good quality bangalore rose onion seeds to

farmers engaged in the cultivation of bangalore rose onion in the districts of

Kolar, Bangalore Rural and Bangalore Urban.

Association with University of Agriculture Sciences, Bangalore, Indian

Gherkin Exporters Association and APEDA in the Research &

Development Project on Standardization of Production Technology for

Export Quality Gherkins.

Implementation and coordination in respect of the agri export zones for

Bangalore Rose Onion and Gherkins in the State.

Conducting commodity and crop specific Seminars, Workshops in growing

areas by involving scientists from UAS, IIHR and other Departmental

officials for the benefit of farmers.

Providing guidance and information to budding entrepreneurs to undertake

exports of agriculture and horticulture commodities from the State.

Cultivation of White and Yellow Onion in Belgaum district in association

with a leading onion exporter and the College of Horticulture, Arabhavi in

Gokak Taluk.

Equity Participation in the Karnataka Grape Wine Board, a newly

established society by the Govt. of Karnataka for the promotion of wine

industry in the State.

Visit to various institutions belonging to Agriculture Marketing Board,

IIHR, Department of Horticulture, University of Agriculture Sciences,

Bangalore and Dharwad for delivering talks on the role and strategy of



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KAPPEC, Potential exists for the development of export of agriculture and

horticulture commodities.

Government of Karnataka in the budget for the year 2006-2007 has sanctioned and

released an amount of Rs.10 crores (Rupees Ten Crores Only) to KAPPEC for

creating post-harvest infrastructure facilities in a phased manner in different parts

of the State based on the potential. Accordingly, the company has envisaged the

following infrastructure facility in the State in a phased manner:-

FUNCTIONS OF KAPPEC

Encouraging budding entrepreneurs to take up exports by guiding them the

procedures, formalities, market information like demand and supply

position for export of potential commodities.

Conducting seminars or symposium in the growing areas to create

awareness among the farming community about the need to grow export

quality produce steps to be taken on pre and post harvest techniques and

publication of literatures in this regard. Supply of good quality inputs. Participating in international exhibitions to

promote the export of Karnataka products.

Encouraging research activities on the export potential crops to enhance the

quality, productivity and production as per international standards.

Conducting periodical meetings with the exporters in order to address their

greivances. Also interaction with all the concerned stakeholders likeexporters processors, bankers, Government agencies, customs authorities,

growers, research agencies etc., to understand their difficulties and try to

address them in the best interest of the industry and growers in particular

and State as a whole.



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Getting the Agri Export Zone (AEZ) sanctioned for the export potential

crops in order to give special emphasis to boost the export of such crops.

Example Bangalore rose onion Gherkins, flowers etc.

Encouraging joint venture equity participation for the development of

infrastructure for exports.

OBJECTIVES OF KAPPEC

To develop and promote the production, processing and export of

agriculture, horticulture and floriculture products. To identify the modern technology for increasing the productivity,

production, processing and storage of these commodities and to implement

the same in the state.

To create post-harvest infrastructure facilities for the development and

export of agricultural products (including horticulture and floriculture) and

also to promote the private participation in this sector.

To establish processing units by KAPPEC or with joint venture participation

with private entrepreneurs.

To supply agricultural inputs or technology required by farming community.

To undertake market research about the export quality products and

disseminate the information to both the exporters and growers.

To conduct seminars, meetings involving farmers, scientists, bankers and

other relatedparties to create awareness among them and also to educate

them about the potentiality of agri exports.

ACHIEVEMENTS



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KAPPEC has been designated as the One Star export House of the

Govt.of India for export performance in agriculture or horticulture

commodities.

KAPPEC has been appointed as one of the canalizing agency for export of

all varieties of Onions from the country.

KAPPEC is the nodal agency for the implementation of AEZs in

Karnataka.

KAPPEC has been awarded with the Silver Trophy and a Citation for

the best performing AEZ in the country by Govt.of India and SilverTrophy and a Citation for the overall export performance during the

years 1996-2000 from Government Karnataka.

KAPPEC provided all the necessary facilities and support for the activities

of WTO Cell established by the Govt.of Karnataka. This cell has studied

the impact of WTO regime on Karnatakas agriculture and horticulture and

submitted its report to the Honorable Chief Minister of Karnataka.

Karnataka was the first State in the country to establish an exclusive cell on

WTO and prepared a report on Impact of WTO Regime. This report of the

WTO cell was circulated to all the Honorable Members of both houses of

Parliament, Govt.of India and Honorable Members of the State Legislative

Assembly and Council. This report became a guide to Government of India

for further discussions andnegotiations with WTO in various forums.

KAPPEC has signed an MOU with the University of Agricultural Sciences,

Bangalore for development of high yielding lustrous and bold seeded

varieties with high oil content in Niger seed. The financial implication of

this research project is Rupees seven lakhs.



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KAPPEC has sanctioned funds for this project from its own resources.

KAPPEC is purchasing good quality variety of Bangalore Rose Onion seeds

from the National Horticultural Research and Development Foundation,

Nasik and distributing to farmers of the state directly and also through the

Department of Horticulture.

KAPPEC is helping budding export entrepreneurs by providing them proper

guidelines and advice in order to increase exports of agriculture and

horticulture commodities from

the state.

In order to encourage the floriculture industry, KAPPEC has participated in

the equity in International Flower Auction center Bangalore Ltd., promoted

by Karnataka Agro Industries Corporation Ltd., Bangalore.

KAPPEC has successfully exported Thompson seedless Grapes, Sharada

seedless Grapes and Pomegranates to Europe and Russia from Bijapur and

paved the way for boosting export of agriculture and horticulture

commodities from the area. In order to give a boost for horticulture exports from Bijapur and

surrounding areas, KAPPEC has advanced an interest free refundable soft

loan of Rs 11.90 lakhs to the Bijapur District Grape Growers Processing and

Marketing Co-operation Society Ltd. Bijapur for modernizing their existing

pre-cooling and cold storage facility and also to create additional pre-

cooling unit to facilitate exports.

NAME OF THE PROJECTS UNDERTAKEN



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Creation of post harvest infrastructure facility consisting of two

pack houses, two precooling units, five cold storages, one

washing, waxing and grading unit, two refrigerated vans, one

battery operated forklift, two hydraulic hand pallet trucks, a

laboratory, office complex, packing and grading tables 40

numbers- For the export of Pomegranates and other horticulture

produce from Kushtagi and surrounding areas in Koppal

Creation of post harvest technologies at Chitradurga consisting

of a receiving hall, pack house, pre cooling, Cold storage,

washing and waxing unit and related equipments for the export

of pomegranates, Figs, Papaya and other horticulture produce

from Chitradurga and surrounding areas.

Establishing a State of the art TUR processing unit at Gulbarga

for the benefits of TUR farmers of Gulbarga, Bidar Districts

and surrounding areas.

Establishing an IQF unit at Hubli in North Karnataka for the

export of Quick frozen foods under PPP model.

Establishing six numbers Vanilla Processing units in difference

vanilla growing areas of the State along with all required

equipments and buildings for processing and drying of vanilla

for export markets.

Establishing Pineapple and other horticulture produce

processing and canning unit in Sirsi, Karnataka.

Creation of Post Harvest Infrastructure at Srinivaspur / Kolar

consisting of a receiving hall, desapping hall, washing, Packing

and related equipments for the export of Mangoes from



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Srinivaspur, Kolar and surrounding areas.

Establishing a grape processing unit at Bijapur for production of

international quality wine and other related products for

exports.

Creation of post harvest infrastructure (cold chain) facility at

Bidar for the export of fruits & vegetables

INVESTMENT

The authorised share capital of the Corporation is Rs 500 lakhs. So far the state

government has released Rs 75 lakhs out of which Rs 50 lakhs as share capital and

Rs 25 lakhs as grant. In addition to this the Government has released an amount of

Rs 10 crore in the budget for the creation of post harvest infrastructure facilities in

the state based on the potential in a phased manner in order to boost the export of

agriculture and horticulture commodities from the State. The Government of

Karnataka and Government of India are eligible for investment.

STRUCTURE OF BOARD

The Board of Karnataka State Agricultural Produce Processing and Export

Corporation Limited has three directors, representative of the Government of

Karnataka. The Board is headed by Chairman, Honourable Minister of

Agriculture.

ORGANISATIONAL STRUCTURE



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Managing Director: Managing Director being the Chief Executive of the

company, has the overall authority/powers to run the day to day affairs of

the organization subject to the superintendence and control by the board.

General Manager: The general manager is the second line officer supporting

the Managing Director in decision making process besides co-ordinating

various activities of the corporation..

Assistant Finance Manager: Assistant Finance Manager duties generally

cover book keeping and finalization of accounts and general administration

matters of the corporation.

Field Officer: To look after the field level activities of procurement,grading, packing and export of agri and horticulture commodities.

The supporting staff assists the top level management in smooth carrying out

of the business.

PRODUCTS

Maize

Rice

Ground nut seed

Niger seed

Safflower

Sesame seeds

Coffee

Cashew nuts

Fruits and vegetable

Onion

Potato



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Lime

Mangoes

Pomegranates

Grapes

Water melon

Black pepper

Flowers

Ornamental plants

COUNTRIES TO WHICH EXPORTED

USA

United kingdom

Australia

Mexico

Singapore

Srilanka

Turkey

Middle east

Japan

Bangladesh



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Indonesia

Spain

Canada

Italy

Korea

Belgium

Russia

Germany

New Zealand

China

France



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ANALYSIS AND INTERPRETATION OF DATA

EXPORT ANALYSIS

An exports analysis is an in-depth evaluation of a countrys export statistics so that

its economic planners or policymakers can devise policy changes. These policy

changes are required to speed up a countrys economic growth. Areas of concern

such as anti dumping measures, tariff peaks and targeted subsidies may also be

analyzed in detail.

Exports analysis can be performed by businesses or countries to enhance their

growth prospects. A detailed export review can help devise future-oriented export

growth plans. The objective is to increase trade and profits.

ANALYSIS OF EXPORTS STATISTICS

Today, most exports analyses are conducted using reflective indicators. However,

researchers have begun to advocate the use of formative indicators as a basis for

export performance analysis. Formative indicators refer to exploring the causal

indicators, rather than the effect indicators.



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Countries can utilize export reports to perk up their trade policies and programs. In

2008, when Australia released a review of its export policies and programs, it

outlined around 70 recommendations as part of its export promotion and trade and

investment policy. A textile exports analysis of China reveals that the country

continues to make its mark in the world textile market, since the removal of the

quota regime in 1994.

Countries frame their new policies and programs based on the results of the long-

term and short-term export reports. These statistics are a result of comprehensive

study of exports, which is conducted by using both objective and subjective

measures.

However, the fact remains that export review results may vary, depending on the

export data source used. Export data may be obtained from two different sources,

such as the International Monetary Fund and the UN Commodity Trade Statistics.

When the facts and figures from the two sources are dissimilar, it may yield

incongruent results. This difference in data source also affects export-led growth

models. Hence, researchers agree on the point that data can be neither interchanged

nor correlated.

Overall, export reports benefit countries and their efforts to formulate their overall

export-oriented development strategy.

Trade report proves to be of great use in understanding the pattern and trends of

trade. It also comes in handy in analyzing bilateral and multilateral trading systems

and various trade policies that regulate the trading systems across the world.

HOW TRADE IS ANALYZED



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Different measures are used to analyze trade. Trade report provides us with all

sorts of information regarding the volume of exports and imports, nature of

the commodity traded, pattern of trade agreement, and the like. In-depth analysis of

a yearly trade report

Documents

project report on kapec