value chain/ market analysis of the lentil sub-sector in ... - Nepal Trade

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chain actors in various aspects such as input supply, technology dissemination, infrastructure development, policy lobbying, and trade. There appears to be a lack of consolidated efforts among the many service providers in supporting the lentil value chain. Financial institutions There are more than five financial institutions in each lentil producing district in Terai providing loan services. However, they are reluctant to provide loan services to small holder farmers. Currently they are focusing their activities towards large traders and processors. The interest rate ranges from 12 to 25% per year depending on who the clients are and their business type. 3.6 Horizontal and vertical linkages The lentil value chain is characterized by informal and underdeveloped market systems. Lentil is marketed as a raw product up to the processor level. After processing, it is marketed as polished whole and split lentil and goes to the consumers of the national and international markets. As the product moves through a series of different market channels, there are no strong vertical or horizontal linkages among the key market actors. Large scale collectors and exporter/processors dominate the lentil value chain. They have the ability to buy large quantities of lentils and hold them for a long period of time. Farmers have good access to input service providers in the village, but improved varieties of seeds, fertilizers, and insecticides/pesticides/herbicides are increasingly in short supply. 3.7 End markets Processor and exporters sell split lentils to the national market while polished whole lentils are exported mainly to Bangladesh. Some spilt lentils are also exported to countries in the Middle East. Member countries of the Organization for Economic Cooperation and Development (OECD) import a small volume of Nepalese lentils. Middle class Nepalese citizens are consumers of lentils, but low income citizens rarely consume lentils from the domestic market. The domestic market is exhibiting an increasing trend in prices over the last decade due to the export market. The national average retail price of lentil increased significantly from 40 NPR/kg in 2000-01 to over 100 NPR/kg in 2009-10 (See Figure 4). Value Chain/ Market Analysis-Lentils 19
Figure 4: Trend of National Retail Price of Lentil 120 100 80 Price(NPRs/kg) 60 40 20 0 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Years Source: MoAC, 2010 3.8 Value Chain Governance The lentil value chain is characterized by an underdeveloped market system due to a lack of mutual understanding and trust among the key actors. Lentil producers work as individuals rather than as a large group which restricts their bargaining capacity when dealing with collectors. Large scale collectors and exporters dominate the value chain by holding large quantities of lentils in their storage facilities until the sale to market price fluctuates to a rate that suits them. Exporters and processors interviewed for this analysis reported that they have adequate contact with international buyers, but they strongly complained about Bangladeshi buyers regarding tardiness in making payments. 4. COMPETITIVENESS ANALYSIS The following competitive analysis identifies strengths, weaknesses, opportunities and threats within the lentil value chain. Strengths and weaknesses address the internal factors governing the lentil sub sector, while opportunities and threats refer to external factors in the business environment. The table below provides details of competitive analysis of lentil sub sector in Nepal (Table 15). Value Chain/ Market Analysis-Lentils 20
Page 1 and 2: VALUE CHAIN/ MARKET ANALYSIS OF THE
Page 3 and 4: CONTENTS Acronyms .................
Page 5 and 6: ACRONYMS AAFC ANSAB MoAC ANROPI DAD
Page 7 and 8: The input supply system should be s
Page 9 and 10: value chain map. Information on ava
Page 11 and 12: South Asia (SA) is the largest lent
Page 13 and 14: 2.1.3 Major Exporters and Importers
Page 15 and 16: 2.2 Domestic Market 2.2.1 Yield, Pr
Page 17 and 18: 2.2.3 Quality Standards Nepalese ex
Page 19 and 20: Figure 2: Value Chain Map of Lentil
Page 21 and 22: Wholesalers Wholesalers buy spilt l
Page 23: Table 13: Benefit-Cost Analysis of
Page 27 and 28: Opportunities Production · New imp
Page 29 and 30: isen at the community level which d
Page 31 and 32: 5.2.2 Production High scope to incr
Page 33 and 34: Support to seed producing groups: T
Page 35 and 36: Advocacy and advertising to use imp
Page 37 and 38: 8. ANNEXES Annex 1: Lentil producin
Page 39 and 40: Annex 3: Importers of Bangladesh SN
Page 41 and 42: Annex 8: Canada Export to the World
Page 43 and 44: Annex 12 Nepal Export of Lentil (tr
Page 45 and 46: 23 KD Surana(KD Babu) Pooja Dal Mil
Page 47 and 48: S N Annex 16: List of Nepali Lentil
Page 49 and 50: 69 ,, 27, Bijoy Nagar, Flat- Rezaul
Page 51 and 52: 132 ,, Shoshi Risa Traders Inter Tr
Page 53 and 54: 180 ,, Habib Kibria Traders Station
Page 55 and 56: Annex 18: List of Interested Actors
Page 57 and 58: 12 Develop linkage/networking with

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