1Institute of Agribusiness Management, Acharya NG Ranga Agricultural University, Tirupati-517 502, Andhra Pradesh
2Department of Agricultural Economics, S.V. Agricultural College, Tirupati-517 502, Andhra Pradesh
3Department of Economics, S.V. University, Tirupati-517 502, Andhra Pradesh
*Author for correspondence, Email: srikalamedikondu@gmail.com
JEL Classification: Q12, Q13
India is the world's largest producer and leading exporter of chilli in the global market. This paper has studied the direction of trade of chillies by Markov chain analysis and has shown that USA is the most stable market of chilli, followed by UAE and Sri Lanka, while Malaysia, Bangladesh and Pakistan are the unstable importers. The paper has found that during 2011–12, the major markets for Indian chilli were Malaysia (24.83%) and Sri Lanka (14.70%). The estimated NPCs have indicated that the Indian chilli was price competitive during the study period 2006–07 to 2010–11. A comparison of competitiveness of Indian chilli against Chinese red chilli has revealed that Indian red chilli is globally price competitive for three years in the study period of five years, 2006–07 to 2010–11.
Chillies, export competitiveness, direction of trade, nominal protection coefficient, Markov chain analysis
