Nepal’s Large Cardamom Exports Surge Amidst Growing Global Demand
Nepal is experiencing a significant boom in its large cardamom exports, with a remarkable 60 percent increase recorded in the first five months of the current fiscal year. This surge is attributed to a considerable rise in both the demand for and the market value of this aromatic spice. Traders are optimistic, anticipating further price appreciation for this high-value commodity.
Data from the Department of Customs reveals that Nepal exported 2,622 tonnes of large cardamom, valued at Rs 5.53 billion, to India during the period spanning from the beginning of the fiscal year to mid-December. This represents a substantial increase compared to the corresponding period in the previous fiscal year.
The growing international appetite for large cardamom, particularly in West Asia and Gulf countries, has been a key driver of this export success. The spice is increasingly incorporated into popular dishes like biryani and various meat preparations, leading to better returns for Nepali farmers.
“Currently, the bold quality is priced at Rs 2,600 per kg, jumbo jet quality is being traded at Rs 2,425, and ordinary quality at Rs 2,350 per kg,” stated Deepak Nepal, president of the Federation of Large Cardamom Entrepreneurs of Nepal. He added, “Last year, large cardamom traded at Rs 2,800 per kg. We expect the price to grow further.” The favorable pricing at the commencement of the harvest season has also played a crucial role in boosting export volumes.
For the entirety of the last fiscal year, Nepal exported 4,301 tonnes of large cardamom, generating Rs 7.68 billion. The sustained increase in demand and value over the past four years has encouraged farmers to expand their cultivation areas, aiming to enhance overall output.
The Federation of Large Cardamom Entrepreneurs of Nepal reports that large cardamom is now cultivated across 18,000 hectares. This includes a significant portion of newly developed acreage, which is expected to yield produce within a year.
Nepal’s Dominance in Global Cardamom Production
Nepal stands as the world’s leading producer of large cardamom, contributing approximately 68 percent of the global supply. India and Bhutan follow as the next significant producers. The cultivation of this spice is historically concentrated in regions like Sikkim, Darjeeling, and Bhutan. Large cardamom was first introduced to Nepal’s Ilam district from Sikkim in 1865.
The primary cardamom-producing districts in Nepal include:
- Ilam
- Panchthar
- Taplejung
- Sankhuwasabha
- Tehrathum
- Bhojpur
- Dhankuta
More recently, cultivation efforts have extended to the Bagmati and Gandaki provinces, further diversifying the production landscape. The peak harvest season for large cardamom typically occurs between October and November.
India: The Primary Market and Re-export Hub
India remains the predominant buyer of Nepali large cardamom, absorbing an impressive 99 percent of the country’s total exports. From India, the spice is often re-exported to markets in Pakistan and the Middle East. These regions exhibit a strong preference for Nepali cardamom, which allows it to command higher prices.
Pakistan, in particular, is a major importer, sourcing about 60 percent of India’s large cardamom exports. The local Muslim community extensively uses the pods in biryani, a highly popular dish, viewing it as a symbol of prosperity and wealth.
Challenges and Opportunities in Export Markets
Despite the growing demand, traders and experts have consistently urged the Nepali government to engage in diplomatic efforts to reduce the substantial taxes imposed by countries like Pakistan and Bangladesh on large cardamom exports. Diversifying export destinations beyond India is seen as crucial for the long-term sustainability of the sector. However, traders lament that these concerns have yet to be adequately addressed by the government.
Bangladesh, for instance, levies multiple duties, resulting in a cumulative tariff of up to 89 percent on the spice. Nepali traders have explored direct export routes to Bangladesh, utilizing the Kakarbhitta-Panitanki-Phulbari corridor. This 44-kilometer route offers the shortest access to the Banglabandha border point in Bangladesh, facilitating trade with and through the country. Unfortunately, progress on this front has been limited, leaving Nepali exporters heavily reliant on the Indian market.
Transit issues also present a significant hurdle, making it particularly challenging to export large cardamom to Pakistan via India.
Understanding Large Cardamom Varieties and Their Economic Significance
Large cardamom is categorized into three quality grades. The Nepali variety, known locally as “Alaichi,” is a cornerstone of Nepal’s export economy. It represents a high-value cash crop and serves as a vital income source for farmers in the mountainous and hilly regions of eastern Nepal.
According to a joint report by the Food and Agriculture Organization of the United Nations and the Economic and Social Commission for Asia and the Pacific, Nepal holds a respectable fifth position globally in cardamom production and ranks fourth among cardamom exporting nations in 2023.
Obstacles to Export Growth
Despite its export potential, several systemic issues continue to impede the growth of Nepal’s cardamom export sector. These include:
- Inadequate Transportation Infrastructure: Poor road networks and logistics challenges hinder efficient movement of goods.
- Lack of Processing Facilities: Limited investment in value-added processing infrastructure means much of the export is in raw form.
- Underdeveloped Market Auction Systems: The absence of robust and transparent auction facilities impacts price discovery and market access.
- Quality Control and Certification Gaps: Ensuring consistent quality and meeting international certification standards remain areas for improvement.
- Regulatory Bottlenecks: Bureaucratic hurdles and complex regulations at auction facilities create inefficiencies.
The report also highlights that navigating non-tariff measures poses a greater challenge for Nepali cardamom exporters than tariffs, even though the spice enjoys duty-free access in many major import markets. Addressing these multifaceted constraints is essential for unlocking the full export potential of Nepal’s prized large cardamom.
