Honey Export Competitiveness
by Ganesh Shakya
Bee-keeping and honey production is not a new economic concept in Nepal . Honey is one of the products which has direct impact on the economy of the poor rural people. Due to the existence of suitable climatic condition for bee-keeping and possibility to start an enterprise with a small-scale investment, more and more farmers are attracted to this sub-sector. Apart from the sale of honey, additional incomes from by-products like bee wax, pollen, royal jelly and queen bee could be the other reasons why farmers are attracted towards this profession. From the commercial point of view, the demand for honey in the international market is ever increasing. Realising the importance of honey in both national and international markets, the Nepal government has recognised honey as an important high-value crop and accorded priority for its development.
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Nepal has five different types of bee viz. Apis laboriosa (bhir mauri), Apis dorsata (khago mauri), Apis florae (kathyauri mauri), Apis cerena and the Apis melifera. Apis laboriosa is a wild species and usually dwells in altitudes above 3,000 metres from the sea level. Apis dorasta is another wild species found at an altitude of 1,000 metres in the Terai region. Apis florae are small in size and are usually found within altitudes ranging between 1,000 to 2,000 metres. These types of bees are disappearing gradually and their honey is rarely found in the world. Apis cerena is also known as the Asian honeybee and is commonly found in almost all the ecological belts of Nepal at an altitude of 3,000 metres. Apis melifera is native to Europe and was introduced in Nepal for commercial bee-keeping purpose. It is common in the Terai, inner-Terai and mid-hill regions of Nepal at lower altitudes. At present, the major source of honey in Nepal is Apis melifera.
It is estimated that a hive of Apis cerena produces eight to 10 kg of honey per annum and 40 to 60 kg from Apis melifera. Nepal has experience of producing 46 kg honey from one hive. A survey reported that Nepal has the capacity of producing 10,000 metric tons of honey per annum. Despite such a big production potential, Nepal is still not in a position to exploit even one tenth of it. The statistics show that honey production in the year 2004/05 was 850 metric tons from 28,500 beehives. The quantity available for commercial purpose is just 400 to 450 metric tons.
Nepal ’s the domestic demand for honey is estimated at about 300 metric tons. However, Nepal exports a very small quantity to India and some other countries. In 2003/04, Nepal exported 144 MT of honey to India and 2.56 MT to overseas countries. Norway used to be the largest buyer of Nepali honey till 2001/02. At present, Nepali honey is banned from being imported in any European country including Norway due to problems associated with pesticides residue. Japan and South Korea are buying Nepali honey nowadays and the UAE, Thailand and Bangladesh are emerging as new markets.
Apart from export, Nepal imports honey from India and from overseas. As per statistics, Nepal , in 2003/04, imported 1.85 MT and 2.56 MT of honey from India and overseas countries respectively. Honey imports in 2004/05 reached the value of Rs. 3.7 million, which is higher than its previous year import. The imported honey is mostly processed and instant. Almost all of the honey imported by Nepal comes from the US and Saudi Arabia .
Global Scenario
China , USA , Argentina , Turkey and Mexico are the countries foremost in honey production in the world. In 2003/04, China produced 311,000 MT of honey and the total global transaction of honey in that particular year was 402,000 MT, i.e. $973 million in value. Germany comes on the top as a biggest importer of honey in the world importing 935,000 MT per annum. Other major honey importing countries are the US , Japan , the UK , Saudi Arabia , and the Netherlands .
The price of honey in the world market for last three-four years has been found decreasing. The international price of honey in 2003 was $1,600 per MT, which reduced to almost half in 2005.
Trade Competitiveness
The importance of honey trade in the national and international market has been significantly increasing. At the same time, trade competitiveness is also materialising as a direct challenge to stakeholders. In Nepal , honey has already been recognised as potential export product but that much is not enough to be well established in global markets. For export promotion, the present status of trade competitiveness of honey must be augmented.
The quality of honey should conform to the standard as fixed by the buyers; it should be supplied in time and the quantity supplied should be as much as demanded by the buyers. The price must be competitive as well. Quality, quantity and the price are the determinant factors of the trade competitiveness. Hence, the weakness in any one of these factors may shrink the competitiveness.
So far as the quality of Nepali honey is concerned, everything is perfect as per international standard except a little bit higher contents of Hydro Methyl Furfural (HMF) substances. This has been well proved by a quality test jointly conducted by Nepal and Denmark . However, each producer, marketing actor, policy advocate, private sectors entrepreneur, government and non-government agency involved in this sub-sector must realise the importance of quality factor in export business and should do their best to enhance the present quality status of honey.
From the point of view of production, the quantity of honey produced in Nepal as compared to other honey producing countries is significantly low. China produces more than 100,000 tons of honey each year whereas India ’s production is 27,000 tons per annum. The productivity of honey in Nepal is also comparatively low. The productivity of Apis cerena in Nepal is estimated about 8-10 kg per hive and it is 40-50 kg in the case of Apis melifera. The honey productivity in Australia is 120 kg per hive per year. Similarly, it is 55 kg, 64 kg, 65 kg and 66 kg per hive per year in China , Israel , India and Canada respectively. Low productivity has caused low production affecting trade competitiveness negatively.
Statistics show that the production cost of honey in Nepal is also comparatively higher. It ranges from Rs. 60 to Rs. 70 per kg. The honey price in domestic market is also a bit higher due to high cost of production. The farm-gate price of honey in Nepal is about Rs. 110 to 115 per kg whereas it is just Nepali Rs. 40 to 72 in India . The high cost of production is the only reason behind the higher price of honey in Nepal as compared to the Indian market price. In the context of falling price of honey in global market, honey export from Nepal may be negatively impacted if the productivity is not enhanced in order to reduce price.
Possibilities are there to reduce price by minimising the production cost. Currently, the cost of bee migration, beehive and the bees’ feeding is relatively high. It is also necessary to improve the present status of honey processing in Nepal . Beside that the most important international concern is related to the quality. Nepal , from time to time, has been facing the problem associated with sanitary and phyto-sanitary measures (SPS) in agricultural commodities export including honey. This is no doubt all due to the lack of a standard measuring unit in the country. This has to be seriously considered and such a unit should be established immediately at the national level.
Finally, the factors affecting trade competitiveness like price, quality and quantity should be well studied and plans and programmes should be formulated accordingly to boost honey production, marketing and exports.
(Shakya worked as Agri Marketing Economist in the Ministry of Agriculture for 23 years and is currently providing consultancy services to different INGOs and NGOs in agro business promotion and MIS)
