China in race to beat India in paprika oleoresin production

KOCHI: Rising paprika cultivation in China, aided by government sops, is posing serious challenges to India, which may result in the latter losing top producer slot of paprika oleoresin. The paprika oleoresin has the highest demand among the spice oleoresins, which are essentially spice extracts, in the global market.

Nearly 35% of India's total spice oleoresin exports of Rs 708 crore came from the paprika oleoresins last year. Higher productivity and the government incentives have led to an increase in paprika - a chilli with bright colour and low pungency - production in China. As a result, China is able to sell paprika oleoresin at 20% lower rates, according to Geemon Korah, CEO of Kancor Ingredients.

Global paprika oleoresin production is about 7,000-8,000 tonne. Of this, China's contribution is in the range of 3,000-3,500 tonne while India's share is around 2,500 tonne. The rest is produced by Mexico, Peru and other countries.

Five years ago, India had a monopoly in the market. India uses bydagi chilli for the production. Unlike Chinese paprika, bydagi chilli has some pungency which is removed for paprika oleoresin production. The bydagi chilli, harvested in January, is expected to be lower this year.

George Paul, director of Synthite Industries, said that there are reports of around 30% drop in paprika production in China. As China has higher paprika productivity, the Indian oleoresin exporters have started importing paprika oleoresin from China for refining and re-exporting. Since a shortfall is expected in Indian crop as well, India may not be able to sell at lower prices.