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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 allconquering 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 recovery from the economic slowdown. The turnaround came in the second quarter of 200910 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 countries export 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 growth of

can pay

for

imports Many

of

capital

goods,

technologies, a

manufactured products and other essential commodities for the sustained developing countries. developing countries have 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 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 agroclimatic 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. the valuable foreign exchange. Such a policy will lead to the use trade as an engine of growth, as well

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

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. high-income elasticity. Agricultural and horticultural products have a Therefore, developing countries This situation makes developed countries to turn to

the developing countries to meet their demand.

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

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 a great 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 in the 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 20072008, 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 sector accounted 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 DRCAFTA (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 and release 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 considered desirable 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 report or 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 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 longterm 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 of numeral used for counting. 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 of years 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 animalbased 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

1.4.1 Prices 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 vegetable prices 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 exporters have 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 billiondollar 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 turmeric prices 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 variety fetched 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 PRODUCE PROCESSING 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 on imagination 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 Data Primary 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 Agricultural Produce 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 31-122010, 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, MiddleEast, 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, precooling 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 promote the 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, precooling 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 Onions Potatoes Turmeric Powder Chillies Dried Grapes Fruits & Vegetables Qty in Mts. 8000 2000 100 100 50 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, precooling 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 vegetables like 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 like exporters 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 Silver Trophy 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 precooling 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, Agriculture. Honourable Minister of

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 longterm 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 offers a comprehensive picture of how well a nation has performed on the front of exchange of commodities and services both in domestic and international markets. If a country continues to accrue gains from trade for successive years, then the economy of that country is said to be in a stable position. On the other hand, if a trading nation incurs loss from international trade, then that economy is said to be in an unfavorable state. Trade review also provides us with an idea about the availability of resources in a particular country and technology used in the production of goods and services. It is the difference in comparative advantage that determines the terms of Reports or Reviews Used in Trade Analysis The World Trade Report is extensively used in the analysis of trade. Besides the yearly World Trade Report, there are many other country-specific trade reviews that are widely used in analyzing the pattern and trends of trade. The yearly and quarterly trade data are extremely helpful for the analysis of domestic and crossborder trade.

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5.1 ONION
Onion is the largest vegetable produced and consumed not only in India but also in the world. Although, it is classified as vegetable, it has special qualities, which add to taste and flavour to food and hence it is mainly used in India cuisine and culinary preparations. In addition to its use in cuisine, it is also relished in raw form with meals. Onion is consumed by all classes of people-poor and rich and hence assumes a place of essential item. Onion possess very good nutritive and medicinal values.

TABLE-1 (2006-2008)
Table showing the export of onion from KAPPEC LTD. YEAR 2006-2007 2007-2008 QUANTITY(mts) 6771.25 4310 VALUE (fob in lakh) 783.82 514.57 PERCENTAGE (%) 100% 63.6%

ANALYSIS

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The above table indicates that the export quantity of onion has been decreased in the 2007-2008 when it compared in the year 2006-2007. Due to the shortage in production the export of onion declined.

GRAPH 5.1.1 GRAPH SHOWING EXPORT OF ONION (2006-08)

100 80 60 40 20 0 2006-07 2007-08 %

INFERENCE

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From the above graph we can inferred that the company had the export during the year 2006-07 was Rs.783.82 lakh. During the year 2007-08 it was decrease by 34.4% and reaches to 63.6% value Rs. 514.57 lakh.

TABLE- 2 (2008-2010)
Table showing the export of onion from KAPPEC LTD.

YEAR

QUATITY(mts)

VALUE (fob in lakh) 387.95 398.52

PERCENTAGE (%) 100

2008-2009 2009-2010

2610 2128.350

ANALYSIS
The above table indicates that the export quantity of onion has been decreased in the 2009-2010 when it compared in the year 2008-2009. Due to the shortage in production the export of onion decline.

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GRAPH 5.1.2 GRAPH SHOWING EXPORT OF ONION (2008-10)

40 35 30 25 20 15 10 5 0 2 008-0 9 200 9-10 %

INFERENCE

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From the above graph we can infer that the company had the export during the year 2008-09 was 387.95 lakh that was 38%. During the year 2009-10 it was decrease to 31% value 514.57 lakh.

5.2 POTATO
Potato is the world's fourth important food crop after wheat, rice and maize because of its great yield potential and high nutritive value. It constitutes nearly half of the worlds annual output of all root and tuber crops. With an annual global production of about 300 million tonnes, potato is an economically important staple crop in both developed and developing countries.

TABLE-3 (2006-2008)
Table showing the export of potato from KAPPEC LTD. YEARS 2006-2007 2007-2008 QUANTITY(mts) 336 924 VALUE (fob in lakh) 51.28 147.08 PERCENTAGE(%) 100 275

ANALYSIS
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The above table indicates that the export quantity of potato has been increased in the year 2007-2008 when it compared in the year 2006-2007. Due to the huge increase in the production, the supply of onion has also increased.

GRAPH 5.2.1 GRAPH SHOWING EXPORT OF POTATO(2006-2008)

300 250 200 150 100 50 0 2006-07 2007-08 %

INFERENCE
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From the above graph we can inferred that the company had the export during the year 2006-07 was Rs.51.28 lakhs . During the year 2007-08 it shows the increase by 275% and the value was Rs.147.08 lakhs

Table-4 (2008-2010)
Table showing the export of potato from KAPPEC ltd. YEAR 2008-2009 2009-2010 QUANTITY(mts) 728 56 VALUE (fob in lakh) 116.88 32.36 PERCENTAGE (%) 216.6% 16.6%

ANALYSIS
The above table indicates that the export quantity of potato has been decreased in the 2009-2010 when it compared in the year 2008-2009. Due to the decrease in the demand from foreign country.

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GRAPH 5.2.2

GRAPH SHOWING EXPORT OF POTATO(2006-2008)

250 200 150 100 50 0 %

2 008-09

2 009 -10

INFERENCE

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From the above graph we can inferred that the company had the export during the year 2008-09 was 116 lakh that was 216.6% . During the year 2009-10 it shows the decrease to 16.6% and the value was 32.36lakh .

5.3 TURMERIC POWDER


Turmeric is a spice derived from a rhizome (a type of root) native to India and Southeast Asia. Turmeric was prized as a dye for centuries, thanks to its power to tint fabric--or food--a brilliant yellow-gold. The dried, powdered rhizome is used in curry powder, some types of pickles, and prepared mustard, and is used as a natural food coloring, in cheese, for instance. Turmeric is sometimes substituted for saffron (which is far more expensive); but aside from their color, the two spices have little in common. Turmeric's flavor has been described as peppery and somewhat bitter, so it's important to be judicious when adding this spice to foods.

TABLE-5(2006-2008)
Table showing the export of turmeric powder from KAPPEC LTD. YEARS 2006-2007 2007-2008 QUANTITY(mts) 36 VALUE (fob in lakh) 10.52 PERCENTAGE (%) 100% -

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ANALYSIS
The above table indicates that the export quantity of turmeric powder has been nil in the year2007-2008 when it compared in the year 2006-2007. Due to the decrease in the demand and production form the foreign country.

GRAPH 5.3.1

GRAPH SHOWING EXPORT OF TURMERIC POWDER(2006-2008)

100 90 80 70 60 50 40 30 20 10 0

2006-07 2007-08

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INFERENCE
From the above graph we can inferred that the company had the export in the year 2006-07 for the value of 10.52 lakh. During the year 2007-08 it shows the nil export.

TABLE 6 (2008-2010)
Table showing the export of turmeric powder from KAPPEC LTD LTD. YEAR QUANTITY(mts) VALUE (fob in lakh) 2008-2009 2009-2010 34 50.350 15.39 30.37 PERCENTAGE (%) 94.4% 139.8%

ANALYSIS
The above table indicates that the export quantity of turmeric powder has been increased in the year 2009-2010 when it compared in the year 2008-2009. Due to the increase in demand from foreign countries.

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GRAPH 5.3.2

GRAPH SHOWING EXPORT OF TURMERIC POWDER(2006-2008)

140 120 100 80 60 40 20 0 2008-09 2009-10 %

INFERENCE

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From the above graph we can inferred that the company had the export in the year 2008-09 for the value of 15.39 lakh that was 94.4%. And during the year 2009-10 it had a bumper increase in export that was 139.8% value of 30.37 lakh .

5.4 FRUITS & VEGETABLE


The vegetable usually means an edible plant or part of a plant other than a sweet fruit or seed. This typically means the leaf, stem, or root of a plant. However, the word is not scientific, and its meaning is largely based on culinary and cultural tradition. Therefore, the application of the word is somewhat category. arbitrary and subjective. For example, some people consider mushrooms to be vegetables, while others consider them a separate food

TABLE- 7 (2006-2008)
Table showing the export of fruits & vegetable from KAPPEC LTD. YEAR 2006-2007 2007-2008 QUANTITY(mts) 1.435 VALUE (fob in lakh) 0.40 PERCENTAGE (%) 100 -

ANALYSIS

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The above table indicates that the export quantity of fruits & vegetable has been nil in the year 2007-2008 when it compared in the year 2006-2007 . due to the decrease in the demand form the foreign countries.

GRAPH 5.4.1 GRAPH SHOWING EXPORT OF FRUITS & VEGETABLE(2006-2008

100 90 80 70 60 50 40 30 20 10 0

qtys

2006-07 2007-08

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INFERENCE
From the above graph we can inferred that the company had a export in the year 2006-07 of 1.435mts value 0.40 lakh . During the year 2007-08 it shows the nil export.

TABLE-8 (2008-2010)
Table showing the export of fruits & vegetable from KAPPEC LTD. YEAR QUANTITY(mts) VALUE (fob in lakh) 2008-2009 2009-2010 0.210 0.06 PERCENTAGE (%) 100

ANALYSIS
The above table indicates that the export quantity of fruits & vegetable has been increased in the year 2009-2010 when it compared in the year 2008-2009. Due to the decrease in production the export of fruits & vegetable.

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GRAPH 5.4.2

GRAPH SHOWING EXPORT OF FRUITS & VEGETABLE(2008-2010)

16 14 12 10 8 6 4 2 0 2008-09 2009-10 %

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INFERENCE
From the above graph we can inferred that the company had a export in the year 2008-09 was nil . During the year 2009-10 it shows the export of 0.210 mts value of 0.06 lakh that was 14.6%.

5.5 PAMOGRANETES
There is tremendous potential for Indian pomegranates in the global markets. Karnataka and Maharashtra states are the leading producers of pomegranates in India. The role of Karnataka State Agricultural Produce Processing and Export Corporation (KAPPEC) in equipping the pomegranate farmers from Karnataka to be competitive in the global markets is crucial. The present study is aimed at understanding the growth of pomegranate exports from India. It also examines the various activities undertaken by KAPPEC for the development of pomegranate exports from Karnataka and the effectiveness.

TABLE- 9(2006-2008)
Table showing the export of pamogranetes from KAPPEC LTD. YEARS QUANTITY(mts) VALUE (fob in lakh) 2006-2007 2007-2008 PERCENTAGE (%) -

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ANALYSIS
The above table indicates that the export quantity of pamogranetes has been nil during the last two year . Due to the decrease in the demand from the foreign countries.

GRAPH 5.5.1 GRAPH SHOWING EXPORT OF PAMOGRANETES(2006-2008)

1 0.8 0.6 0.4 0.2 0 %

2006-07 2007-08

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INFERENCE
From the above graph we can inferred that the company had not exported during the years 2006-07,2007-08.

TABLE-10 (2008-2010)
Table showing the export of pamogranetes from KAPPEC LTD. YEAR QUANTITY(mts) VALUE (fob in lakh) 2008-2009 2009-2010 30.240 41.16 PERCENTAGE (%) 100

ANALYSIS
The above table indicates that the export quantity of pamogranetes has been increased during the year 2009-2010 when it compared in the year 2008-2009.due to the increase in the demand from foreign countries.

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GRAPH 5.5.2

GRAPH SHOWING EXPORT OF PAMOGRANETES(2008-2010)

10 0 90 80 70 60 50 40 30 20 10 0 200 8-09 200 9-10 %

INFERENCE
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From the above graph we can inferred that the company had not exported during the years 2008-09. And during the year 2009-2010 company had exported the 30.240 mts worth 41.16 lakhs.

5.6 SUGAR
Armed with a surplus of over 5 lakh tonnes of sugar this year, mills in Karnataka have set a target to export 5 lakh metric tonnes. The state is likely to end the present sugar year (October 2009 to Sept 2010) with a total production of 25 lakh tonnes, a growth of 31.5 per cent over last year. Unless we export the surplus production this year, we will not be able to recover a part of the losses that we will suffer. We are facing a state of glut this season and only the export of excess stock will save us from a severe situation," sources in the South Indian Sugar Mills Association said.

TABLE- 11 (2006-2008)
Table showing the export of sugar from KAPPEC LTD. YEARS 2006-2007 2007-2008 QUANTITY(mts) 2080 VALUE (fob in lakh) 234.54 PERCENTAGE (%) 100

ANALYSIS
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The above table indicates that the export quantity of sugar has been increased in the year 2007-2008 when it compared in the year 2006-2007. Due to the increase in the demand from the foreign country.

GRAPH 5.6.1 GRAPH SHOWING EXPORT OF SUGAR(2006-2008)

100 80 60 40 20 0 %

2006-07 2007-08

INFERENCE

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From the above graph we can inferred that the company had the export in the year 2007-08 of 2080 mts worth of 234.54 lakh and during the year 2006-2007 the export was nil.

TABLE-12 (2008-2010)
Table showing the export of sugar from KAPPEC LTD. YEAR QUANTIYT(mts) VALUE lakh) (fob in PERCENTAGE (%)

2008-2009 2009-2010

ANALYSIS
The above table indicates that the export of sugar has been nil in the last two years. Due to suddenly decrease in demand from the foreign countries.

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GRAPH 5.6.2 GRAPH SHOWING EXPORT OF SUGAR(2008-2010)

1 0 .9 0 .8 0 .7 0 .6 0 .5 0 .4 0 .3 0 .2 0 .1 0 20 08-0 9 20 09-1 0 %

INFERENCE
From the above graph we can inferred that the company had the export in the year 2008-2009 and 2009-2010 was nil.
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FINDINGS
FINDINGS
The study entitle A study on export analysis of different products towards processing and export industry with special reference to Karnataka state agricultural produce processing and export corporation ltd. Has been undertaken with the objective to analyze and interpret the companys export performance. The analysis of the company was undertaken with the help of tally and graphical representation.

In general ,the company has achieved tremendous progress over the past two years which shows that the company has started gradually recovering from the recession period. The growth of the company is not in maintenance of the exports as it is fluctuating every year and when comparing with the different products exported. The growth of onion in the year 2006-07 had a tremendous increase in export quantity to 6771.25 mts . It started decreasing from the next year 4310,2610,2128.35 mts in the years 2007-08,2008-09,2009-10 respectively.
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The growth of potato during the year 2007-08 was 924mts . It started decreasing from the next year to 728mts and 56mts in the 2008-09,2009-10 respectively. The growth in the export of turmeric powder is very much uneven. In the year 2009-10 it shows the export of 50.350mts and in the year 2007-08 it was nil. And in the year 2006-07and 2008-09 the export quantity was nominal. The fruits and vegetable shows the average export performance only by exporting in two year. In the year 2006-07 had a export of 1.435mts and in the year 2009-10 had a 0.210mts .and in the year 2007-08 and 2008-09 was nil. The pamogranetes shows the very nominal export performance . It had only exported in the year 2009-10 was 30.240mts.

The sugar also shows a nominal export by exporting in a single year during the last four years. In the year 2007-08 it shows the export of 2080mts.

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RECOMMENDATIONS AND CONCLUSION


7.1 CONCLUSION
Karnataka State Agricultural Produce Processing And Export Corporation Ltd. Although having been in the agricultural market ,it has been able to capture a prominent place in this sector with its internationally accepted quality standards and timely delivery. The analysis and interpretation of the export performance of the company has helped to know the export standings of the firm and helped in identifying its strengths and weakness.

The export position of the firm showing the uneven trends towards different products , over the year under study but company has always maintained adequate profit during these years . this implies that the firms position to meet its current obligations with the existing resources is very good. This report shows a very great fluctuation but the firm always maintains the profits which is very comfortable for the suppliers.

The overall export of the firm during the last 4 year has shown a high fluctuation due to the seasonal production of the agricultural products and also heavily hit by
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the down turn and recession. But from the export analysis of the different products we observed that the firm has able to earn the profit during the last five year which signifies that the firm has strongly started recovering from the recession.

Thus, export analysis of different products is very useful to analyse the export performance of Karnataka State Agricultural Produce Processing And Export Corporation Limited and high lightened the export performance of the company in the some products and also helped in the avocation of certain strategies to be followed by kappec ltd which is indispensable to its future growth.

7.2 RECOMMENDATIONS
In the case onion the company shows the moderate growth in the last four year. The growth of onion in the year 2006-07 had increase in export quantity to 6771.25 mts . It had export quantity 4310,2610,2128.35mts in the years 2007-08,2008-09,2009-10 respectively. Though onion is seasonal crop firm is able to export the in last 4 years. For the more export companies had to the stock of onion in cold storage. In the case of potato the company shows the average growth during the year 2007-08 was 924mts . It started decreasing from the next year to 728 and 56 in the 2008-09,2009-10 respectively. The company had to maintain the cold storage for the export when ever demand arises. In the case of turmeric powder the company shows the below the average export. The growth in the export of turmeric powder is very much uneven. In
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the year 2009-10 it shows the export of 50.350mts and in the year 2007-08 it was nil. And in the year 2006-07and 2008-09 the export quantity was nominal. The cultivation of the turmeric plants is seasonal thats why firm is not able to produre the turmeric powder every. For the better export of turmeric powder ,company had to maintain the local suppliers and farmers. In the case of fruits and vegetable the company shows average export because of seasonal cultivation of vegetables. The fruits and vegetable shows the average export performance only by exporting in two year. In the year 2006-07 had a export of 1.435mts and in the year 2009-10 had a 0.210mts .and2007-08 and 2008-09 was nil. To perform good in the case of fruits and vegetable the company had to maintain more cold storage. In the case of pamogranetes the company shows the very nominal export performance and it had a nil export during the year 2006-09. It had only exported in the year 2009-10 was 30.240mts. For this company need to built more cold storage for to export the products in of season also. In the case of sugar the company shows the nominal performance by producing only in last year with the quantity of 2080 mts which very large quantity. The shows the company is recovering very fast and it is very good for the company .

The recession and global down turn being affecting the economys export industry is the major reason for the huge fluctuation in firms business.

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Export form the company is basically depends upon the demand from the outside country. If there is no demand from the outside country has to face many problems. Therefore to maintain stability and prevention of high fluctuation , the firm should try to achieve stability which would help in company better performance and also helps in better utilization of the funds and human resource.

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