Cardamom in Nepal:

Large cardamom (Amomum subulatum Roxb.) or ‘Alainchi’ in nepali, known as ‘queen

of spices’, also called ‘grain of paradise’, is a perennial herbaceous spice crop
belonging to the family of Zingiberaceae. Large cardamom is the third most expensive
spice in the world after saffron and vanilla.
Large cardamom was introduced into Ilam (Nepal) in 1865 AD, by Nepalese laborers
although, commercial cultivation started much later in 1953 AD and further development
of this crop began after the establishment of Cardamom Development Centre at Fikkal
of Illam district in 1975. The price of large cardamom has dropped significantly to almost
Rs. 850 per kg in 2018 which was more than 2500 in 2014.

Opportunities:
 Nepal earns 20 million dollars annually from cardamom production out of which
12 million comes from the export of the product.
 Possibility of earning more by quality improvement.
 The market for organic essential oil extracts is increasing from a small base, and
a high premium is often available for many essential oils.
 The spice is a major cash earner for thousands of farmers in the eastern districts
of Nepal.
 Easy and open border.

Michael porter’s diamond model:

Challenges:
 ‘Duplicate Large Cardamom’ is the major problem.
 The market is facing emerging competition which is slowly disrupting export
performance and lowering market prices.

Opportunites:
 Easy and open boarder.
 The market for organic essential oil extracts is increasing from a small base, and
a high premium is often available for many essential oils.
Product life cycle theory:
Challenges:
 Fluctuation of price.
 Duplicate large cardamom are different in shape and smell but they are mixed
with the original Nepali large cardamom to gain higher profit.

Opportunities:
 Possibility of earning more by quality improvement.
 Nepal earns 20 million dollars annually from cardamom production out of which
12 million comes from the export of the product.

Challenges:

1. In recent years, encouraged by the high economic return from large cardamom,
major green cardamom producing countries namely Guatemala, China and Vietnam
began to export ‘duplicate’ large cardamom to Pakistan.
2. This is due to the fact that when Nepal exports large cardamom to the world
market, ‘Duplicate Large Cardamom’ is the major problem.
3. Nepalese farmers have started facing several problems in cardamom production
such as spread of viral diseases, poor soil conditions, price fluctuation, etc.
4. Another problem of large cardamom export is absence of unique HS code at six-
digit level [8].
5. Since, 99% of the total cardamom production is exported to India alone, it has
indirectly but negatively impacted on large cardamom sector in Nepal.
6. The Nepali cash crop entrepreneurs are unable to export in large numbers to
foreign markets due to the high cost of production, inadequate storage facilities, tariff
 constraints, transportation constraints, and lack of knowledge from actual production
to the export market.
7. Large cardamom (Black cardamom) shares the same HS code to the green
cardamom, which has similar appearance and is more widely produced globally.
8. The price of large cardamom was 2,700 in the year 2014 and Rs.3000 in 2016
but it has dropped to Rs.850 in 2018, a drop of about 68% (Fluctuation of price).
9. Duplicate large cardamom are different in shape and smell but they are mixed
with the original Nepali large cardamom to gain higher profit.
10. Only few districts of the country are actively involved for the production of large
cardamom.
11. The market is facing emerging competition which is slowly disrupting export
performance and lowering market prices.

Impact of Covid 19:

 Not only the demand dropped but also the production of the supply dropped.
 The trade routes are currently either closed or have very limited turnaround.
 Some countries also impose restrictions on export and import certain goods.
 If you only export in one market you’re very vulnerable and in this condition your
business may be literally shut down.

Strategies:

 Meet the required quality standards

 Comply with food safety requirements
 Provide clear product information
 Develop a brand
 Set reasonable prices
 Choose your segment and channel carefully
 Meet your buyers in person
 Provide correct packaging and transportation
 Be aware of differences in business culture
 Deliver what you promise
 Start by doing thorough market research
 Decide which countries you want to focus on.
 Study market requirements and prepare yourself well before starting to sell
 Review the websites of European sector associations
 Participate in trade fairs and conferences
 Network and meet buyers face-to-face
 Use direct marketing
 Make sure you can be found online

6 8. Analysis of Strengths, Weaknesses, Opportunities and

Threats (SWOT) of Priority Export Potential Goods and Services
SWOT analysis was developed based on in-depth study of each of the twelve
priority export sectors identified in NTIS 2016. The SWOT and the detailed sector
analyses presented in the Full Report were used to identify required courses of
actions for value chain development and promotion of the priority export
potentials. Those actions are reflected in the Action Matrix of NTIS 2016.
SWOT Analysis: Large Cardamoms
Strengths:  Nepal is one of the largest producers and exporters  High value
agro-product with increasing demand in global market  Significant source of
income and employment for farming household, including women  Suitable
geographical and climactic conditions ,mainly in hilly districts  Cardamom
production helps to prevent soil erosion

Weaknesses:  Inadequate specialized manpower  Weak linkages of Research

and Extension  Limited value addition due to lack of modern processing and
storage facilities  Inadequate supply of improved seeds and seedlings 
Inefficient internal quarantine facilities  Limited supply of tissue culture seedlings
and high price

Opportunities Possibility of production area expansion along hilly region 

Possibility of productivity enhancement  Possibility of establishing processing
facilities for value addition  Development of disease free seedlings  Higher
demand on third country

THREAT:  Managing disease/pests  Pricing mechanism  Higher dependency

on a single market  Climate Change
Market analysis:
 Globally, demand of cardamom is increasing because of its multiple
uses i.e. food and medicine.
 Cardamom is known  as “Queen of Spice” due to its rich taste and aroma.
 Indian soil and topography gives an added advantage for spice
manufacturers, spice producers and spice suppliers to venture
towards large scale production of cardamom thus spice exporters can
push the product intensively in the global market.
 The policy of the government of export promotion combined with
latest tools and resources, India can become a global leader in export
of cardamom driven by some of the best spice exporters of the
Country.
References:
https://www.intracen.org/uploadedFiles/intracenorg/Content/Redesign/Audience/policy_makers/Nepal
%20Cardamom%209_web.pdf

https://www.business-to-you.com/porter-diamond-model/?fbclid=IwAR1mEHE_RIXopD-yer_Ri-
Ju7EUPRfCBjOpi_ISTva2tPpAPeN35n5DiJFE

https://www.investopedia.com/terms/p/product-life-cycle.asp

file:///C:/Users/wd/Downloads/109f4cd3-5464-484c-bd15-31782fe5270a-1.pdf

file:///C:/Users/wd/Downloads/24741-Article%20Text-75347-1-10-20190705.pdf

file:///C:/Users/wd/Downloads/MalaysianJournalofHalalResearchAReviewonStatusofProductionofLarge
CardamominNepalanditsMarketinginNationalandGlobalScenario.pdf

file:///C:/Users/wd/Downloads/Nepal%20Rapid%20Assessment%20COVID19%20Final3.pdf

http://www.eec-nepal.org.np/pdf/how_to_export_to_europe_final.pdf

https://www.oecd.org/aidfortrade/countryprofiles/dtis/Napal-DTIS-2016.pdf

http://floraspices.com/blogs/market-analysis-green-cardamom/

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Bruin, L. D., 2020. Business to you. [Online]

Available at: https://www.business-to-you.com/porter-diamond-model/?fbclid=IwAR1mEHE_RIXopD-
yer_Ri-Ju7EUPRfCBjOpi_ISTva2tPpAPeN35n5DiJFE
[Accessed 18 June 2018].

NEPAL NATIONAL SECTOR EXPORT STRATEGY, 2020. LARGE CARDAMOM. [Online]

Available at:
https://www.intracen.org/uploadedFiles/intracenorg/Content/Redesign/Audience/policy_makers/Nepal
%20Cardamom%209_web.pdf

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Acharya, K. R., 2020. Nepalese Foreign Trade. [Online]

Available at: file:///C:/Users/wd/Downloads/24741-Article%20Text-75347-1-10-20190705.pdf

Bruin, L. D., 2020. Business to you. [Online]

Available at: https://www.business-to-you.com/porter-diamond-model/?fbclid=IwAR1mEHE_RIXopD-
yer_Ri-Ju7EUPRfCBjOpi_ISTva2tPpAPeN35n5DiJFE
[Accessed 18 June 2018].

Khatiwada, A., 2020. A review on status of production of large cardamom in nepal and its marketing in
national global scenario. [Online]
Available at:
file:///C:/Users/wd/Downloads/MalaysianJournalofHalalResearchAReviewonStatusofProductionofLarge
CardamominNepalanditsMarketinginNationalandGlobalScenario.pdf

NEPAL NATIONAL SECTOR EXPORT STRATEGY, 2020. LARGE CARDAMOM. [Online]

Available at:
https://www.intracen.org/uploadedFiles/intracenorg/Content/Redesign/Audience/policy_makers/Nepal
%20Cardamom%209_web.pdf

NEPAL, U., 2020. Rapid ASSESSMET OF SOCIO ECONOMIC IMPACT OF COVID-19 IN NEPAL. [Online]
Available at: file:///C:/Users/wd/Downloads/Nepal%20Rapid%20Assessment%20COVID19%20Final3.pdf

Noyele, T., 2020. Nepal Trade Integration Strategy. [Online]

Available at: https://www.oecd.org/aidfortrade/countryprofiles/dtis/Napal-DTIS-2016.pdf
[Accessed 2016].
Rupareliya, P., 2020. Flora spices. [Online]
Available at: http://floraspices.com/blogs/market-analysis-green-cardamom/
[Accessed 10 march 2020].

Shah, B., 2020. EEC-NEPAL. [Online]

Available at: http://www.eec-nepal.org.np/pdf/how_to_export_to_europe_final.pdf
[Accessed OCTOBER 2017].

Shrestha, J., 2020. Research Gate. [Online]

Available at: file:///C:/Users/wd/Downloads/109f4cd3-5464-484c-bd15-31782fe5270a-1.pdf
[Accessed october 2018].

Opportunities:
Easy and open Boarder:
Nepal is one of the world largest producer of cardamom. Nepal being neighbouring
country of India, the NEPAL-INDIA boarder is very easy and open. So, we can export
our products in a large quantity without any restrictions or any difficulties to India.
Therefore it is also one of the main opportunity.
Used as medicinal herbs:
The second opportunities is that the cardamom is mainly used as a medicinal herbs. So,
India imports large amounts of cardamom from Nepal for the various medicinal
purposes as well as to give unique flavor of original Nepali cardamom in the foods.
Increasing market for organic essential oil extracts:
Likewise, it is also one of the main opportunities. The market for organic essential oil
extracts is increasing from a small base, and a high premium is often available for many
essential oils.
Annual income of $12 million from export:
Moving towards, another opportunities that is annual income of 12 million dollar from
export. Nepal earns 20 million dollars annually from cardamom production out of which
12 million comes from the export of the product which is very good point.
Possibility of earning more by quality improvement:
Similarly, another opportunities is possibility of earning more by quality improvement.
For the quality improvement various strategies should be made. Traders and farmers
should receive training on quality management and modern production techniques
using centralized processing and the establishment of cooperatives so, we can earn
more.

Challenges:
Duplicate large cardamom:
Duplicate large cardamom is one of the main challenges for us. In recent years,
encouraged by the high economic return from large cardamom, major green cardamom
producing countries namely Guatemala, China and Vietnam began to export duplicate
large cardamom.
Fluctuation of price:
Moving on, another major challenges is fluctuation of price. The price of cardamom was
2700 in the year 2014 and 3000 in 2016 but it has dropped to 850 in 2108, a drop of
about 68% which is really a bad loss.
Mixing of duplicates with Nepali cardamom for higher profit:
Likewise, mixing of duplicates with Nepali cardamom for higher profit is another main
challenges. Duplicate large cardamom are different in shape and smell but they are
mixed with the original Nepali cardamom to gain higher profit by Indian traders.
Emerging competition disrupting export performance and lowering market prices:

Moving towards, another challenges is emerging competition disrupting export

performance and lowering prices. The market is facing emerging competition which is
slowly disrupting export performance and lowering market prices. It is because of
increasing production of cardamom in different countries which is indirectly loss for
Nepal.

Strategies
Meeting the required quality standards:

Meeting the required quality Standards is our main strategy because it provide
organizations with the shared vision, understanding, procedures, and vocabulary
needed to meet the expectations of their stakeholders. Businesses and organizations
complying to quality standards helps products, services, and personnel cross borders
and also ensures that products manufactured in one country can be sold and used in
another.

Complying with food safety requirement:

The second one strategy is complying with food safety requirement. The food business
is responsible for developing and implementing a Food Safety plan for the food its
processes or manufactures.  A specific Food Safety plan is needed for each food and
for each processing system employed by a food business because every food and
every processing system/procedure poses different risks and requires different risk
management practices.
Providing clear product information:

Likewise, providing clear product information is another our main strategy. The best
product descriptions build trust with users and make your company look polished and
legitimate Product descriptions can also help you stand out from competitors by telling
customers what your product has that others don’t! If your product solves a problem for
people that no other product can, you are likely to succeed but only if you have the best
product description.

Developing a brand and reasonable prices:

Moving towards developing a brand and reasonable prices,  it doesn’t matter how big (or
how small!) our company is; if you’re in business, you need to think about branding your
business. And, Price is also a very important weapon which a seller can use to
overcome competition. A seller, by fixing a reasonable price and by offering value for
money can overcome competition.

Delivering what you promise via market research:

Moving on delivering what you promise via market research, if you want to be
successful, you must build a powerful emotional brand. You must stop looking at
customers with dollar signs in your eyes and start creating relationships with them.
When your customers see that you truly value them and care about the service you can
provide them, they'll be customers for life. 

Provide correct packaging and transportation:

The last but not the least, provide correct packaging and transportation is our main
strategy. The best products in the world will be useless if you can’t get them where
they need to be. From making transportation possible to protecting your goods
during transit, logistics packaging is a vital part of the delivery process.