Global Horticulture Market Outlook 2015 projects that horticulture industry plays vital role in the future. The globe has initiated measures to support this industry. In 2011, global fruits and vegetables production were 548 million tonnes and 990 million tonnes respectively. And the global floriculture industry size was around USD 109 billion [1] .

Globalization has witnessed the focus on integration of developing country firms geographically with PAN world with supply networks or commodity chains. These global supply chain linkages help to connect developing countries’ firms with developed countries’ suppliers and customers. Gereffi [2] [3] , emphasises not only that independent companies in different countries are linked together in trading relationships, but also that the chain should be considered as a network governed to a large extent by key agents within it. Watts’s paper focused on the trade in fresh vegetables and said that this sector has become one of the most vibrant sectors in international trade, and during the l990s, imports of fruit and vegetable products by EU countries surpassed all other categories of agricultural products (Wattsl 994).

Gereffi [3] reported GCCs [Global Commodity Chains] novel in increasingly organizing international production and trade in strategic decision making and economic networks at global scale by industrial and commercial firms. Gereffi [2] classified the commodity chains are producer-driven and buyer-driven. Producer-driven commodity chains are governing by transnational firms and buyer-driven commodities govern by retailers, importers and brand-name companies. These firms link overseas factories and traders with evolving product niches in their main consumer markets.

India is one of the largest agrarian economies of the world. In the context of economic liberalization, it promotes export led growth. The Indian National Agriculture Policy (NAP) focuses more on demand driven agricultural growth in domestic and export markets. Of late, WTO trade liberalization and multilateral negotiations also focus more on international agricultural commodity markets in the light of improvement of market access and limitation of export subsidies.

Horticulture marketing define as finding out what your customers want and supplying it to them at a profit therefore involves: identifying buyers, understanding what they want in terms of products and how they want to be supplied, operating a production-marketing chain that delivers the right products at the right time and making enough profit to continue to operate.

Horticultural sector contributes 54% of agricultural Exports and 28% of AgGDP in India. Over the last decade this sector grown at the growth rate of 3.6 percent. NHB, 2011 reported that India is second largest producer of fruits and vegetables in the world next only to China. This tremendous production potential offers India’s greater opportunities for exports. India produced in 2010-11, 146.55 MTs of vegetables and 74.88 MTs of fruits. And its requirement is 175.2 MTs vegetables and 74.40 MTs fruits. In 2011-12, India exported vegetables and fruits worth Rs. 4801.29 crores. The consumption basket is changing towards fruits and vegetables. National Horticultural Mission started in 2005, Foreign Trade Policy (2004-09) advocating to boost export growth and promotion of horticultural products. XI & XII Plans also emphasizing accelerated horticultural growth.

India is one of the world’s leading producers of finest tea 23 per cent share by volume in 2013. Its contribute 12 per cent share in world tea exports in 2013- 2014. The CIS countries accounted for 19.8 per cent of total exports in 2013- 2014 with US$ 152.46 million. India registered exports of 225.7 million kg. for approximately 78 per cent of total exports during 2013-2014 [4] . In 2013-2014, the Russian federation was the topmost importer of Indian tea, followed by UAE and Iran respectively.

Coffee Board, 2014 reported that India ranked in coffee production seventh largest in the world and third largest Asia. India exported coffee during 2013- 2014, 313,025 metric tonnes and earned foreign revenue 793.22 US$ million. India exports coffee to over 45 countries, over 50 per cent of to Europe. Italy is the largest importing more than 25 per cent from India [5] .

We are living in multi-speed world economies. Horticultural commodities play significant role in living economics. World Development Report [6] reported that markets are central to the lives of poor people and World Bank, World Development Report [7] framed institutions that support the development of markets.

UNCTAD [8] study revealed that India’s exports to world are income elastic and found that 1% decline in GDP growth of world will lead to 1.88% decline in India’s growth of exports. Singh and S. K. Singla [9] found from their study (1992 to 2006) that India has been unable to diversify its exports as well as export destinations. Export from India has experienced instability primarily in the developing countries. Demand for India’s exports was found to be elastic to both relative prices and income of the importing countries. Traill [10] predicts that by 2015 supermarket’s share of the retail food market will reach 61% in Argentina, Mexico, and Poland, 67% in Hungary and 76% in Brazil. IFPRI’s [11] research shown that agricultural Market reforms liberalization programs adopted by many developing countries in the past had limited success in developing private, efficient, and competitive agricultural markets. Dastagiri and Immanuelraj [12] advocates reforms needed to shift Indian farming from traditional farming to an agribusiness sector and develop linkages farmers to super markets and export markets is a key driver for industrialization of agriculture.

Alberto and Stefano [13] estimated import price demand elasticity in the destination markets of Italian exports found that Italy has a relatively low elasticity of substitution in main specialization sector (machinery and equipment), while has higher substitution elasticity for traditional goods like textiles, jewelry and leather. Reardon and Hopkins [14] ; Minton (2008) found that super markets and retailers competing om price, convenience, quality of the products and safety. Mithofer et al. [15] found that smallholders were linked to the export market by middlemen in Kenya. Galanopoulos et al. [16] reported that though Mediterranean countries are traditional growers of fruit and vegetables but unable to competitive in the global market. Dastagiri et al. [17] estimated and found that for all vegetables the NPC is less than 1 indicating they are competitive in the international markets. Lenné & Ward [18] found that the export vegetable subsector as a role model for improving the efficiency, growth and economic value of domestic vegetable marketing systems in East Africa. Dastagiri et al. [19] reported that most of the Indian horticultural commodity markets were operating efficiently and producer-consumer was the most efficient channel. Diego et al [20] found in Niamey, Niger for market retailers net profit (NP) for amaranth and lettuce on marketplace, whereas the NP of cabbage and tomato strongly depended on season and marketplace.

This paper examines the position of Indian producers and exporters in the horticultural export trade from the perspective of the global supply chain analysis. There are limited studies on market research of horticulture commodity global supply chains and identification of major global markets. This study analyses Indian horticultural commodities export markets linking to global supply chains and price trends, elasticity’s and instability & identification of their destinations. Finally, the study will suggest multispeed strategies for improvement of global supply chains, prices, production, and trade.

The Specific Objectives are:

1) To analyze exports price growth rates of India’s horticultural commodities.

2) To estimate export elasticity’s for Indian fruits, vegetables, flowers and Tea & Coffee.

3) To identify major destinations for horticultural commodities and their share in world horticultural exports.

4) To trace India’s horticultural commodities Global Supply chains.

5) To suggests polices and strategies for boosting Indian horticultural exports and foreign earnings.

The study analyses the marketing of horticultural commodities exports with global supply chain perspective. India’s major export horticultural commodities were selected. It includes fruits, nuts, vegetables, flowers, coffee and tea. Study Period is 1990-1991 to 2012-2013. Data on quantity, values, and prices of exports, international prices and destinations of fruits, vegetables, flowers coffee and tea were collected. India is exporting these commodities to maximum 130 countries. Data sources are Agricultural Produce Export Development Authority (APEDA), Directorate General of Commercial Intelligence (DGCIS),National Horticultural Board (NHB), FAO Stat, Centre for monitoring on Indian economy (CMIE), Foreign Trade Year Book, Planning commission reports, National Bank for Agricultural and Rural Development (NABARD), EXIM Bank, export companies, Tea & Coffee Boards. Compound annual growth rates and trends of quantity exports, prices, and price elasticity’s of exports were estimated. For each commodity, the countries classified in to the top 10 countries based on major share of exports and rest as other countries. Finally top 3 countries of India’s exports for each commodity are identified. India’s horticultural commodities global supply chains traced with the help of experts of export companies, growers and literature. The compound growth rates, price elasticity’s, instability index of exports were estimated using the following formulae’s.

Growth rate formulae: [21]

The growth rates were calculated by fitting Exponential function for exports, prices etc for the period 1990-1991 to 2012-2013.

Y t = Y 0 ( 1 + r ) t (1)

Assuming multiplicative error term in the Equation (1), model may be linearized by logarithmic transformation

ln Y t = A + B t + € (2)

where, A ( = lnA 0 )   and   B ( = ln ( 1 + r ) ) are the parameters to be estimated by ordinary least square regression, t = time trend in year, r = exp ( B ) − 1

Price elasticity of exports formulae:

∑ P e = %   change   in   quantity   exports / %   change   in   price

The percentage change in quantity exports is % ΔQ, and the percentage change in price is %ΔP. We calculate %ΔQ as ΔQ/Q_ave and we calculate %ΔP as ΔP/P_ave, so we calculate the price elasticity of exports as ( Δ Q / Q a v e ) / ( Δ P / P a v e ) .

Instability Index formulae:

Coefficient   of   Variation = StandrdDeviation Mean ∗ 100

The study findings were useful in designing policies and programs for escalating exports and foreign income, recognizing profitable destinations and modern export supply chains. The export growth rates during 1990-2012 (%) of India’s fruits, vegetables and flowers are positive except mushroom and walnut. The export growth rates (qty) range from 5.8% Mango to 19.6% banana and vegetables; 8.4% onion to 23% green chillies and rose export growth rate was 7.8%. Mango, grapes, onion and gherkins exports are stable whereas Banana, Pomegranate, Green chillies and Potato are unstable. During this period the price elasticities of exports of fruits, vegetables and flowers are positive except walnut and mushrooms. This implies that Indian exports of these commodities are highly responsive to price changes in the international markets. Among fruits, the highest elasticity was found for banana (4.58%) and among vegetables green chillies recorded high (3.98%). This implies that India should increase exports of these commodities to earn more foreign earnings. Bangladesh, UAE, Pakistan, Malaysia, Sri Lanka, UK, Saudi Arabia, Nepal, Netherland and France are the major destinations (65% - 90%) for Indian fruits. Nepal, UK and France (40%) are the major destinations for walnut. The major share 50% to 65% of India’s vegetables (potato, onion, green chilies) are exported to Saudi Arabia, UAE, Pakistan, Malaysia and UK.

The export growth rates during 1990-2012 (%) of India’s Tea (0.7%) and coffee (4.9%) are positive. The exports of Tea are stable and of Coffee are unstable. During this period the price elasticities of exports of Tea and Coffee are elastic. Among the highest elasticity was found for Coffee (61.4%) and Tea (13.1%). During 1996-1997 to 2013-2014, Saudi Arabia has showed the highest coffee export elasticity (1.77) followed by UK (1.57), Italy (1.39) and France (1.27). India has comparative advantage to export to Middle East and Europe markets. While during the same period, UK has showed the highest tea export elasticity (3.93), followed by France (2.42) and Australia (1.90). Tea is export commodity for developed countries. The major destinations which accounted 50% to 60% share for Indian Tea and Coffee are Australia, Russia & USA, Italy, Germany, and Belgium.

India has top leading modern horticultural export and import companies. The supply chain channel to Europe, UK, US shows that highly developed model and no middlemen involved. Similarly, the same type of channel found for Middle East countries. In case of South Asia, Africa and South East Asia importing countries supply chain channels lengthy and middlemen involved. UK, Europe, US (developed countries) farmers connecting with direct customers in domestic markets as well exporters. This eliminated middlemen as they are no use in improving quality and commercial gains.

The study helps in designing agricultural policies and programs to increase horticultural exports and foreign earnings in Asia, Africa and East European markets and USA. India should develop modern supply chains and apply multispeed straggles of exports. Scientific, planned and organizing required to fore see demand and supply position in international and local markets. South Asia, East Asia, Latin America and Africa the supply channels are lengthy and middlemen are involved. In this connection Digital India will help in various export activities. The exporter has an access to various resources available at government level. In the Globalization era the global supply chain model must be connecting producers directly with exporters and importers or consumers of importing countries. This is possible digitalization of data and single window processing.

The international trade in general and export marketing in particular is complex phenomenon because of too many variables effects on trade. This study estimated only few indicators such as elasticities, growth rates, market destinations and traced global supply chains. Hence, future research should be focus on more trade parameters and policies influencing on them.

Dastagiri, M.B. (2017) India’s Horticultural Export Markets: Growth Rates, Elasticities, Global Sup- ply Chains, and Policies. Modern Economy, 8, 847-864. https://doi.org/10.4236/me.2017.87059