Green Outputs Market Trends & Potentials in India:

India is best known as an exporter of organic tea and also has great export potential for many other products. Other organic products for which India has a niche market are spices and fruits. Org-Marg’s survey also proves this fact as around 30% of respondents that includes producer, exporters and traders has responded that organic tea is produced in India and this is highest response for any single crop, next are spices, fruits, vegetables, rice and coffee (Garibay S V and Jyoti K, 2003). There is small response for cashew, oil seed, wheat and pulses. Among the fruit crops Bananas, Mangos and oranges are the most preferred organic products.

Export Market: Organic agricultural export market is one of the major drivers of greening of agriculture in India. The current production of organic crops is around 14,000 tons (Garibay S V and Jyoti K, 2003). Out of this production, tea and rice contributes around 24% each, fruits and vegetables combine makes 17% of this total production. From India around 11,925 tons of organic product is exported, that makes around 85% of total organic crop production. Major export market for Indian producers are Australia, Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Singapore, South Africa, Saudi Arabia, UAE, UK, and USA. Estimated quantity of various products that are exported from India in 2002 is shown in Table 5.This shows that around 3000 tons of tea was exported and in quantity term it was the highest, next major exports are rice (2500 tons), fruits & vegetables (1800 tons), cotton (1200 tons) and wheat (1150 tons) (Garibay S V and Jyoti K, 2003).

Table: 5 Major organic products exported from India

Product	Sales (Tons)
Tea	3000
Coffee	550
Spices	700
Rice	2500
Wheat	1150
Pulses	300
Oil Seeds	100
Fruits & Vegetables	1800
Cashew Nut	375
Cotton	1200
Herbal Products	250
Total	11,925

Source: Org-Marg, 2002

The burgeoning US and European green markets provides enormous scope for Indian exporters. International Trade Centre’s (ITC) overview of estimation of organic food world-wide shows that there is strong growth in retail sales from US $ 10 billion in 1997 to US$ 17.5 billion in 2000 and about US$ 21 billion in 2001 (in 16 European countries, USA and Japan). If the demand of so called ‘green product’ in Japan that is not certified as organic product is excluded from total estimation, than also it is US$ 16 billion for 2999 and reached around US$ 19 billion in 2001. Though the current market share for organic produced is estimated between one to two percent of total food products market, but the forecasting by experts show that this market is likely to grow at a higher pace. According to experts in medium term around five percent of the market is expected to be organic market share (Minou Yussefi and Heldge Willer, 2003).

Europe is largest market of organic produces in world and consumes around half of the world produce of organic production (Minou Yussefi and Helga Willer, 2003). EU is a net importer of cereals, oilseeds, potatoes and vegetables. For 2001, European market for organic food was estimated to be around US$ 9 billion but with expected annual growth rate of around 20% (Table: 6) depending upon the market, and for 2003 the retail sales for organic food in this market is expected to US$ 10-11billion (Rudy Korbech-Olesen, ITC, UNCTAD/WTO). Within Europe, Germany is largest market for organic products with sales value of around 2.5 billion Euros (.3 billion (US)). On an average the per capita spending on organic produces in Europe was euro 23 for 2000. In terms of per capita consumption of organic products countries like Denmark (72 Euros per head), Switzerland (Euros 68), Austria (Euros 40) and Germany (Euros 31) fared much better than others (Fig: 9). While some of the European countries like Italy not only meet their internal demand for organic products but they also cater to the demands of other neighbouring countries. There are other countries like United Kingdom, which are highly dependent on imports to meet their domestic organic product demand.

Fig: 9 Per capita sales of organic produces in selected European Countries in Euro (2000)

Source: Garibay S V and Jyoti K, 2003

In North America, retail sales of organic products for 2002 was estimated nearly billion (US) out of this US alone is contributing for billion (US). US retail sale for organic product has grown 20-24% per year for the past 12 years and the same growth trends expected to continue for future. Current retail sales for organic food is around 2% of total retail food sale in US (Minou Yussefi and Heldge Willer, 2003).

In Asia largest market for organic food product is Japan and it is estimated to have the retail sales of organic food and beverage of around $(US) 2.5-3.0 billion (Minou Yussefi and Heldge Willer, 2003). Of this total value of organic market, imports are estimated to be to the tune of around $(US) 360 million. Though the organic food market is not more than 0.5% of total food market of Japan but according to the Japanese Integrated Market Institute, import of organic products is likely to grow by 40% (Hiraga, 2002). Other global markets for organic products in Middle East are Saudi Arabia and UAE. Within Africa, South Africa is the only country that has organic market potential. As seen from the global market growth trends for organic foods there are enormous potentials for India to exploit.

Table: 6 Percentage of organic food and medium term growth expected in selected markets

Overview for World Market for organic food & beverages in 2000 (estimates)
Markets	% of total food sales	% Expected growth - Medium term
Germany	1.6-1.8	10-15
U.K.	1.0-2.5	15-20
Italy	0.9-1.1	10-20
France	0.8-1.0	10-15
Switzerland	2.0-2.5	10-15
Denmark	2.5-3.0	10-15
Austria	1.8-2.0	10-15
Netherlands	0.9-1.2	10-20
Sweden	1.0-1.2	15-20
Belgium	0.9-1.1	10-15
U.S.A.	1.5-2.0	20

Source: ITC, January2002

Total commodity wise demand (in volume terms) has been estimated in some selected export markets (Germany, Holland, UK, Switzerland, USA, and Japan) by the FIBL & ORG- MARG survey which shows that for Banana it is 6,410 tons, for wheat and soy bean 1,000 tons, for pineapple around 900 tons and for mango this is around 650 tons (Garibay S V and Jyoti K, 2003).

The attractiveness of organic market gets enhanced also because of the price premium that these products have over the conventionally produced products. Price premium for various organic produces vary in different countries depending upon the distribution channels and market conditions. This premium varies from 30-50% (trader level) for different products.

As seen from above there are immense opportunities for organic agricultural exports for Indian to exploit. Some of the prerequisites for exploiting this potential include:

• Farmers capacity to produce the organically the agricultural products which have global market and
• Prior experience of exporters and traders in exporting agricultural commodities to these markets

In the Fig 10 an attempt has been made to develop a matrix by depicting the conventional agricultural commodities, which India has been exporting to various countries across the world as well as the existence of organic market for these commodities in these countries. Depicting the current conventional agricultural market indicates the capabilities of India in exporting the specific agricultural commodities to different countries and similarly depicting the existence of organic agriculture market for specific commodities in these countries reveal the existence of opportunities for exporting organic agricultural commodities. In developing this matrix we have used annual exports of agricultural commodities as published in CMIE agricultural sector reports and for exploring organic market in different countries for different commodities we have used the internet resources mentioned at the end of this article. The matrix reveals that India has demonstrated capabilities of exporting agricultural commodities like rice, wheat, tea, coffee, spices, oil meals, sugar, fruits & vegetables etc to countries like USA, U. K, Germany, Japan, France, Saudi Arabia, South Africa, CIS Countries, Poland, Netherlands, Italy etc. It also shows that in most of these countries there is a demand for organically produced commodities, which attract price premiums ranging from 10% to 100%. This showcases a window of opportunity that is yet to be exploited to its maximum potentials by Indian exporters and producers of agricultural commodities.

Fig: 10 Conventional agricultural products & their export market and prospective market for Indian organic products.