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Market Analysis of the Lentil Sub-Sector in Nepal

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Market Analysis of the Lentil Sub-Sector in Nepal VALUE CHAIN/ MARKET ANALYSIS OF THE LENTIL SUB-SECTOR IN NEPAL Contract No. AID-367-TO-11-00001 August 2011 This publication was produced for review by the United States Agency for International Development. It was prepared by ANSAB- sub-contractor to NEAT Activity under Prime Contract No. EEM-I-00-07-00008, AID-367-TO-11-00001 Nepal Economic Agriculture, and Trade Activity—Value Chain/ Market Analysis of the Lentil Sub-Sector in Nepal Contract No. EEM-I-00-07-00008, AID-367-TO-11-00001 United States Agency for International Development General Development Office Kathmandu, Nepal The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. CONTENTS Acronyms ..................................................................................................... iii Executive Summary ...................................................................................... 1 1. Introduction .................................................................................................. 2 1.1 Background ................................................................................................... 2 1.2 Objective .......................................................................................................... 3 1.3 Scope of the Study ............................................................................................ 3 1.3.1 Location ................................................................................................. 3 1.3.2 Information Collection ............................................................................ 4 1.3.3 Data Presentation .................................................................................... 4 1.3.4 Limitations of the Study .......................................................................... 4 2. Industry Analysis .......................................................................................... 5 2.1 World Market ................................................................................................ 5 2.1.1 Worldwide Production ............................................................................. 5 2.1.2 World Market ......................................................................................... 7 2.1.3 Major Exporters and Importers ............................................................... 8 2.2 Domestic Market ......................................................................................... 10 2.2.1 Yield, Production, and Area ................................................................... 10 2.2.2 Export/Import Condition ........................................................................ 11 2.2.3 Quality Standards .................................................................................. 12 3. Value Chain Mapping ................................................................................ 13 3.1 Value Chain Map ......................................................................................... 13 3.2 Actors and Roles ......................................................................................... 15 3.3 Seasonal Market Variability and Price Trend ............................................... 16 3.4 Profitability of the Lentil Business ............................................................... 16 3.5 Enablers of Value Chain .............................................................................. 18 3.6 Horizontal and Vertical Linkages ................................................................. 19 3.7 End Markets ................................................................................................ 19 3.8 Value Chain Governance ............................................................................. 20 4. Competitive Analysis .................................................................................. 20 5. Analysis of Constraints and Opportunities ............................................... 23 5.1 Constraints ................................................................................................. 23 5.1.1 Input Supply .......................................................................................... 23 5.1.2 Production ............................................................................................. 23 5.1.3 Processing........................................................................................... 24 5.1.4 Marketing ........................................................................................... 24 5.1.5 Policy Environment ............................................................................ 25 5.2 Opportunities ........................................................................................... 25 5.2.1 Input Supply .......................................................................................... 25 5.2.2 Production ............................................................................................. 26 Value Chain/ Market Analysis-Lentils i 5.2.3 Processing ..................................................................................... 26 5.2.4 Marketing ..................................................................................... 26 5.2.5 Policy Environment ....................................................................... 27 6. NEAT Strategic Interventions .................................................................... 27 6.1 Short-term Interventions ........................................................................ 27 6.1.1 Production ..................................................................................... 27 6.1.2 Processing ..................................................................................... 28 6.1.3 Marketing ..................................................................................... 28 6.1.4 Policy and Institutions ................................................................... 29 6.2 Long-term Interventions ........................................................................ 30 6.2.1 Production ..................................................................................... 30 6.2.2 Processing and Marketing ............................................................. 30 6.2.3 Policy and Institutions ................................................................... 30 7. References ..................................................................................................... 31 8. Annexes ......................................................................................................... 32 Annex 1: Lentil Producing Pocket Areas of Visited Districts ....................... 32 Annex 2: List of Lentil Exporters/Processors in Nepal ................................. 32 Annex 3: Importers of Bangladesh ................................................................ 34 Annex 4: World Export Trends in Terms of Value ....................................... 34 Annex 5: Word Export Trends in Terms of Quantity .................................... 34 Annex 6: World Import Trends in Terms of Value ........................................ 35 Annex 7: World Import Trends in Terms of Quantity ................................... 35 Annex 8: Canada Exports to the World ........................................................ 36 Annex 9: Sri Lanka’s Import from the World ............................................... 36 Annex 10: Bangladesh’s Import from the World .......................................... 36 Annex 11: Overseas Export of Lentil from Nepal ........................................ 37 Annex 12: Nepal’s Export of Lentils ............................................................ 38 Annex 13: Nepal’s Import of Lentils ............................................................ 38 Annex 14: Lentil Seed Replacement Rate of Nepal ...................................... 38 Annex 15: List of the Groups/Industries/People Interviewed ........................ 39 Annex 16: List of Nepali Lentil Importers in Bangladesh ............................. 42 Annex 17: List of PSDM participants .......................................................... 49 Annex 18: List of Actors interested in working with NEAT ......................... 50 Annex 19: Cost/Benefit Analysis of Lentil ................................................... 51 Value Chain/ Market Analysis-Lentils ii ACRONYMS AAFC Agriculture and Agrifood Canada ANSAB Asia Network for Sustainable Agriculture and Bioresources MoAC Ministry of Agriculture and Cooperatives ANROPI Association of Nepalese Rice, Oil and Pulses Industry DADO District Agriculture Development Office DFTQC Department of Food Technology and Quality Control DDC District Development Committee DCCI District Chamber of Commerce and Industry FAO Food and Agriculture Organization EC European Commission FGD Focus Group Discussion FNCCI Federation of Nepalese Chambers of Commerce and Industry FORWARD Forum for Rural Welfare and Agricultural Reform for Development GAP Good Agricultural Practices GMP Good Manufacturing Practices GoN Government of Nepal ha Hectare ITC International Trade Centre kg Kilogram LDC Least Developed Country LIBIRD Local Initiatives for Biodiversity, Research and Development MFIs Micro Financial Institutions MFN Most Favored Nation MRL Maximum Residue Limit MT Metric ton NARC Nepal Agricultural Research Council NARDF National Agricultural Research and Development Fund NEAT Nepal Economic Agriculture
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