A situation analysis study for chillies oleoresin ... File.pdf · foods 2. shan foods 3 ......

U.S. PAKISTAN PARTNERSHIP FOR AGRICULTURAL MARKET DEVELOPMENT

U.S-PAKISTAN PARTNERSHIP FOR

AGRICULTURAL MARKET DEVELOPMENT

(AMD)

‘A situation analysis study for chillies oleoresin extraction,

focusing on stakeholder’s identification, potential oleoresin

investors, feasible zone for grant implementation and

potential markets”


Chili World Wide: The native land of Chili is considered to be Mexico with

secondary origin in Guatemala.

Chili imparts pungency and color to the dishes.

It is an important ingredient in day to day curries, pickles and chutneys.

It is also a rich source of Vitamin A, C, E and P assists in digestion.

It also prevents heart diseases by dilating blood vessels.

It is also called as hot pepper, red pepper, cayenne pepper, capsicum, etc.


World Chili Production - Tones: Country 2013 2004-13

(Average)

% Share (Average)

India 1,376,000 1,238,084 40%

China 300,000 261,934 8%

Peru 164,000 156,877 5%

Thailand 156,000 154,485 5%

Pakistan 150,000 138,587 4%

Others 1,316,134 1,182,762 38%

Total 3,462,134 3,132,731 100%

Source: www.faostat3.fao.org

Data relates to Red and cayenne pepper, paprika, chilies (Capsicum frutescence;

C.annuum); allspice, Jamaica pepper (Pimenta officinalis).


Rejections by EU – 2004 - 2015: 94 consignments of Pakistani

commodities (including

Chilies, rice etc.) were

rejected due to Aflatoxin

contamination during last

decade.

Source: NAPHIS, MNFSR, GOP.


Red Chili in Pakistan: o Locally renowned varieties are Dandi cut (Longi, Nagina etc) and

Hybrid (Skyline etc.). This year (2015-16) hybrid : Dandi cut had been sown with the ratio

of 1:3.

o Total Area = 62,742 Hectare (Sindh shares 83%)

o Total Yield per Hectare = 2.32 Tons

o Total Production (Dry) = 145,856 Tons (Sindh shares 88.8%)

o Estimated domestic consumption = 75% of total production.

o Export of Red chilies = 2,281 Tons (Rs. 569 millions)

o Import of Red chilies = 5,668 Tons (Rs. 559 millions)

Source: Fruit, Vegetables And Condiments Statistics Of Pakistan, MNFSR, GoP.


Issues with Pakistan Chili: o Unavailability of quality seeds (disease free).

o Substandard Nursery development.

o Inappropriate transplantation from Nursery to the field

o Traditional picking practices

o Poor Quality due to Aflatoxin produced as a result of;

Poor drying practices

Unhygienic practices

Mixing of old & new crops

Improper storage at farm level

Injudicious use of pesticides and fertilizer application

o Unawareness of local consumers and growers about chili quality

o Poor control over quality and pricing

o Less financial and technical support to chili growers

o Non availability of appropriate storage infrastructure


What is Oleoresin

Oleoresin capsicum:

Obtained from the longer, moderately pungent Capsicum used in the production of red chili. Commercial red chili oleoresins are mainly used as a spice supplied in pungency ratings between 80 000 and 500 000 Scoville units (approximately 0,6-3,9 % capsaicin w/w) and a wide range of color


Paprika extract:

Obtained from varieties of C. annuum from which paprika powder is produced. It has a high colour value, but little or no pungency. Commercial paprika oleoresin is available in different colour strengths up to 150 000 colour units (equivalent to 10.8% total carotenoids).


Chili Oleoresin: Oleoresins are extracted natural aromatic liquid containing

essential oils and resin.

Obtained by the solvent extraction of the chilies through supercritical CO2 or solvent-solvent extraction method.

Oleoresins are highly concentrated and hence provide a very economical method of flavoring.

Easier to control for quality, cleaner than the equivalent ground chilies.

An excellent solution to overcoming the issue of chili aflatoxins.

Give rise to opportunities for entering more lucrative international markets.


Chili Oleoresin World Market: • The global oleoresin market is expected to

reach USD 1.69 billion by 2022.

• India exported chili oleoresin worth USD 38.44 million with total quantity of 2.48 tons.

• China is the largest buyer of chili oleoresin accounting for exports worth USD 35.04 million followed by South Korea and United Kingdom USD 2.34 million and USD 0.29 million respectively.

http://www.grandviewresearch.com/industry-analysis/oleoresins-market




Global Growing Popularity of spices: Various studies show that there is increasing trend in use of

spices like:

– 80% increase in interest in spicy foods in the USA

– around 60% in Europe Middle East & Africa,

– 45% in Asia Pacific and

– 40% in Latin America


China as potential market for Pakistan

• China market can be a big potential for Pakistani Oleoresin in future. As currently china is importing a huge amount of oleoresin from India and most of the trade is being done by air which no doubt is an expensive way of transport. China Pakistan economic corridor would be cheapest way to trade between Pakistan and China. And if can tap this potential we would have edge over all world as being the most economical for China i.e around 65% cheaper in transport than the world.


Future Global Market Trend


Supply chain analysis of Pakistan

The agro-ecological suitability of the southern zone of the country to the production of chilies has resulted in the raising of 89.7 % of total production from Sind. Punjab produces 6.3 % and Balochistan 3.4 %. KPK contributes only 0.6 % of total production. In Punjab, the main chili producing areas are Kasur, Okara, Pakpattan, Sahiwal, Multan, Sheikhapura, Khanewal, Vehari and Bahawal Nagar. In Sindh, main chili producing areas are Mirpurkhas, Hyderabad, Badin, and Sanghar. In KPK, the main chili producing areas are Mohmand Agency, Bajour, Dir and Kohat. In Balochistan, the main chili producing areas are Killa Saifullah, Khuzdar, Loralai and Musa Khel.


Chilli Growing Area in Pakistan


http://www.agricorner.com/wp-content/uploads/2015/04/Chilli-Production-Pakistan.jpg


Land holding trends in Pakistan

0%

10%

20%

30%

40%

50%

60%

70%

< 10 10 to 20 20-40 40-80

Punjab

Sindh


Pakistan market: Following companies imported around 60 Tons of Oleoresins in 2015 and 2016

1. National Foods

2. Shan Foods

3. Mitchell,s Fruits Farms

4. Mehran Foods

5. NAURAUS (PVT) LTD.

6. RAKAPOSHI

TRADERS

7. CORNISH FOOD INDUSTRIES

8. STANDARD CHEMICAL CO

9. AHMED FOODS PVT LTD

10. W.WOODWARD PAKISTAN (PVT.) LTD

11. ADIL & CO

12. SAFEER CORPORATION

13. UK TRADERS

14. AL KARIM CORPORATIO

N

15. YOUNGS (PVT) LTD

16. ALLIED AXIOM CHEMICAL (PVT) LTD


INTRODUCTION TO OTHER SPICES

1. BLACK PEPPER (PIPER NIGRUM)

Extraction

Essential oil by steam distillation from the dried & crushed peppercorn.

Description and History

A very important stimulant in the treatment of certain digestive disorders,

constipation, loss of appetite. It helps cold and can be used as a sexual tonic,

might help in diarrhea, flatulence, pains, and poor circulation. As a

Carminative it can be added to foods. Occasionally used in blends for

energetic enhancement. Used for toothache and externally for joint and

muscle aching.


2. CARDAMOM (ELETTARIA CARDAMOMUM )

Extraction

The oils are distilled from the Plants.


The Cardamom of commerce consists of the dried ripe fruit of Elettaria

Cardamomum. There are two varieties of this species.

1. Var. minuscule Burkhill, also called Alpha Minor.

2. 2. Var. Bita Major, also called Elettaria major, or Long Wild Cardamoms.


3. CASSIA (CINNAMOMUM CASSIA)

Extraction

Essential oil by steam distillation from the Plant.


Cassia are contains medicinal qualities similar to cinnamon but its smell

is sweeter and more pleasant. It is used to give colors to many perfume

blends. In certain areas the primitive distillation apparatus, still used,

contains copper piping which gives a red tone to the oil. Rare because it

comes from China and Vietnam .


4. CORIANDER (CORIANDRUM SATIVUM)

Extraction

The oil is distilled from the leaves.


This fresh herb is also known as cilantro or Chinese parsley, and is a

favourite in Mexican food. The essential oil is produced from the seed, is

an antidote to hot food, very decongesting to the liver, and is a great

reducer of fire and heat in the body. It is thought to be an aphrodisiac

because of its phyto-estrogen content. It`s also a carminative,

stimulating digestion.


5. GARLIC (ALLIUM SATIVUM) Extraction Essential oil by steam distillation of the roots. Description and History The bulbs or cloves of the common garlic have been used since antiquity, particularly in Mediterranean Countries, as a popular prophylactic and curative against all kinds of intestinal ailments chronic infections of the stomach and the intestines, dysentery, typhoid fever, cholera, etc and even against arteriosclerosis and hyperpnea. Phoenician sailors carried good stocks of garlic on their long sea voyages. Oil of garlic has lately come to be appreciated as a valuable flavoring agent, for use in all kinds of meat preparations, soups, canned goods, and table sauces.


6. GINGER (ZINGIBER OFFICIANLIS) Extraction The oil is distilled from the roots, plants Description and History Ginger is one of the most commonly used herbs in Ayurveda and Chinese medicine. Because of its digestive properties, it is without peer in cases of illness due to poor absorption and assimilation. Its wonderful for regulating the blood, for motion sickness, weight loss; Its helpful in bringing any condition in to balance. For sea sickness, air sickness, or problems in balance use it on a small circular bandage behind the ear. Light often adds it to her bath on cold mornings and to daily skin massage lotion in the winter.


Product wise share of Oleorsin


Processing Technology

• Methods and extraction

1. Solvent –Solvent Extraction

2. Super-critical CO2

3. Steam Distilation


Supper Critical Extraction Method

Worldwide, Supercritical Fluid Extraction (SCFE) Technology has emerged as a superior alternative to the conventional techniques for extraction of natural products in food, pharmaceutical and chemical industries.

Pakistan with its rich botanical resources has very high potential for the use of SCFE to achieve value addition to its traditional export of natural materials in raw form.

Thus use of SCFE technology can help Pakistani industry to gain its share in rapidly growing international market for high quality, value added natural products.


Applications of CO2 extraction unit

• Spice extracts (oil & oleoresin)

• Flavours & fragrances

• Food colours

• Cholesterol free food products

• Food preservatives

• Herbal medicines

• Pesticides (neem)

• Deoiling of fast foods

• Decaffeination (coffee & tea)

• Hop extracts (bitter)

• Nicotine / tar free tobacco


Challenges

Compared to traditional extraction technologies SCFE is comparatively more capital-intensive due to the requirements of high pressure operation (100-500 bar) and very accurate process control.


Process Diagram


CO2 Extraction Unit


Solvent Extraction

• In this method Oleoresins are obtained from spices by extraction with a non-aqueous solvent followed by removal of the solvent by evaporation.

• Solvent to be used

a. Hexane

b. Acetone

c. ethylene dichloride, or alcohol


Factors affecting recovery

• Solvent selection

• Particle size of the powder

• Grinding temperature

• Extraction time


Typical Process Flow

Cleaning and

grinding of Spices

Extraction with

Solvent

Distillation of Extract

Recovery of Solvent

Blending and

Packaging


Typical Solvent Extraction Plan


Extraction recovery and analysis results • Recovery %

– Max 14 %

– Min 10%

• Color value

– Standard = 4000-20,000 units

– Local = 22326 units

– Hybrid = 17751 units


Scoville heat units

– Standard = 240,000 units minimum

– Local = 489574.94 units

– Hybrid = 394675.40 units

Total capsaicin

– Standard = 1.5% min

– Local = 3.05%

– Hybrid = 2.46%


Business Model • Plant capacity per annum: 300 Tons

• Expected Yield: 10%

• Working days per annum: 300

• Average Chili Buying price: PKR 130/Kg

• Oleoresin Selling Price: PKR 2,500/Kg

• Inflation: 10%

• Depreciation: 5% - 10%

• Asset Replacement: 6th year

• Asset Replacement cost: 50%

• Annual Efficiency: 75% - 85% - 95%

• Discount Rate 12%


Initial Investment – All figures in PKR

• Oleoresin extraction plant 20,000,000

• Infrastructure 12,000,000

• Standby Generator 500,000

• Furniture & Fixtures 200,000

• IT & other Equipment 400,000

Total 33,100,000


Financial Assumptions • All CAPEX has been booked in the base year in order to obtain improved

results in first operational year.

• % of depreciation on CAPEX has been accounted for while remaining will be covered through O&M cost and asset replacement cost.

• Conservative approach has been used while calculating revenues.

• Revenues are based on gradual annual increase.

• Revenues and cost has been projected over 10 years.

• To avoid biased results, a percentage of inflation has been accounted for.

• Sensitivity Analysis for 3 scenarios has been performed.


Financial Highlights • All proposed interventions are financially viable and cash positive at the

end of 1st year.

• AMD Grant will serve as the catalyst factor to mitigate the initial investment risk, encouraging long term private sector participation.

• The sector is highly sensitive to cost and sale pricing.

• Shifting toward advance and right technology is the game changer in the whole scenario.


Projected Profit & Loss Years Operating

Revenue Operating Cost Gross Profit Net Profit

1 53,437,500 40,667,000 12,770,500 10,045,500

2 66,618,750 48,540,155 18,078,595 15,353,595

3 81,901,875 58,014,538 23,887,338 21,162,338

4 90,092,063 63,620,800 26,471,262 23,746,262

5 99,101,269 69,787,689 29,313,579 26,588,579

6 109,011,396 76,571,267 32,440,128 29,715,128

7 119,912,535 84,349,703 35,562,832 31,775,332

8 131,903,789 92,557,832 39,345,956 35,558,456

9 145,094,168 101,586,774 43,507,393 39,719,893

10 159,603,584 111,518,611 48,084,973 44,297,473


Projected Financial Results • Free Cash Flows:

IRR 59%

Payback Period Year 3

CBR 1.50

• Discounted Cash Flows:

IRR 42%

Payback Period Year 4

CBR 1.28

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Prepared for review by the United States Agency for International Development under USAID

Contract No. AID-391-C-15-00003, U.S.-Pakistan Agricultural MarketDevelopment (AMD) Activity in

Pakistan implemented by CNFA

U.S-PAKISTAN PARTNERSHIP FOR

AGRICULTURAL MARKET DEVELOPMENT

(AMD)

‘A SITUATION ANALYSIS STUDY FOR CHILLIES

OLEORESIN EXTRACTION, FOCUSING ON STAKEHOLDER’S

IDENTIFICATION, POTENTIAL OLEORESIN INVESTORS,

FEASIBLE ZONE FOR GRANT IMPLEMENTATION AND

POTENTIAL MARKETS’

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U.S-Pakistan Partnership for Agricultural Market Development

Assignment Title:

‘A SITUATION ANALYSIS STUDY FOR CHILIES OLEORESIN EXTRACTION,

FOCUSING ON STAKEHOLDER’S IDENTIFICATION, POTENTIAL OLEORESIN

INVESTORS, FEASIBLE ZONE FOR GRANT IMPLEMENTATION AND POTENTIAL

MARKETS’2015-2019

Consultants:

1. Dr Fayyaz Ahmad

’ 2. Shahbaz ul Hassan Jafary

USAID Contract

AID-391-C-1500003

Implemented by CNFA

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Submitted on: 10th Jan 2017

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Table of Contents

EXECUTIVE SUMMARY 6

OVERVIEW OF AMD PROJECT 8

CHAPTER 1 9

1. INTRODUCTION TO CHILI 9

A. HISTORY 9

B. USES OF RED CHILI ...........................................................................................................................9 I. RED CHILI AS A SPICE .........................................................................................................................9 III. OLEORESIN OF RED CHILI ................................................................................................................ 10 C. FOOD QUALITY AND FOOD SAFETY ...................................................................................................... 10 D. VARIETIES .................................................................................................................................... 10

CHAPTER 2 12

2. CHILI CROPPING SYSTEM 12

A. INTRODUCTION TO CHILI CULTIVATION 12

B. MAJOR CHILI PRODUCING COUNTRIES 12

C. NOMENCLATURE IN DIFFERENT PART OF THE WORLD 14

D. LOCAL NAMES IN SUB-CONTINENT 14

E. SEASON OF SOWING IN CHILI CULTIVATION 15

F. PESTS AND DISEASES IN CHILI CULTIVATION 15

CHAPTER 3 17

B. LAND HOLDING TRENDS IN PAKISTAN 17

CHAPTER 4 20

B. PRE-REQUISITE PROGRAMS FOR FOOD SAFETY AND QUALITY 20

C. HACCP BASED FOOD SAFETY SYSTEM REQUIREMENTS 21

I. PRELIMINARY STEPS TO ENABLE HAZARD ANALYSIS 21

1. FOOD SAFETY TEAM 21

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CHAPTER 5 23

G. CHINA AS POTENTIAL MARKET ........................................................................................................... 28

CHAPTER 6 33

C. SOLVENT EXTRACTION UNIT ............................................................................................................. 35

II. DESIGN, PACKAGING AND STORAGE 37

CHAPTER 7 38

7. FINANCIAL SUITABILITY OF THE PROJECT.............................................................................. 38 A. SUPER CRITICAL METHOD ................................................................................................................. 38 I. VARIABLE COST STRUCTURE ................................................................................................................ 38

II. INVESTMENTS ............................................................................................................................... 38

CONCLUSION 42

REFERENCES: 43

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EXECUTIVE SUMMARY

Situation Analysis

The study was conducted to access the suitability of the Oleoresin extraction in Pakistan.

Global market for Oleoresin is increasing very rapidly due to its ease of handling, transportation,

meeting food safety requirements and diversified use in ready to eat products like food,

pharmaceuticals and other applications. Chili Oleoresins are most widely used for their color and

pungency characters in variety of products especially in food. Currently India is the largest

producer of Oleoresins and most of its production is exported all over the world.

Proposed Solution

Pakistan is equally suitable for taping this potential as similar agro-climate prevails here as in

India. Sindh and Punjab are the famous Chili producing areas of Pakistan. There is a big gap in

both domestic and international market for Pakistan. Major food processing companies having

their setups in Pakistan are currently importing Oleoresins from India and other countries and in

near future, China with the courtesy of CEPAK will be a big market for Pakistan as well. The initial

analysis and survey conducted showed that the varieties being grown in Pakistan both local and

hybrid are very much capable of meeting the international requirements in terms of Pungency

and color value. The Local variety Kunri gave very promising results where as the hybrid variety

“Skyline0-2” was also found equally good for the purpose. Two most widely used methods for

extraction of oleoresins are Supercritical and solvent extraction methods. The first one is more

efficient in terms of quality of the product and is more sophisticated in Operations but heavy

initial capital investment is required, where as the later one in comparatively cheaper as per

initial investment is concerned but the quality is not as comparable to the supercritical. Mostly

used method is solvent extraction due to its low initial capital investment.

Implementation

In Pakistan, Sindh has been the major producer of Chilies, followed by Punjab and

Baluchistan. According to the Pakistan Crop Reporting Services Statistics, in the year 2011-12

Pakistan produced 40,414 tons of red Chilies on around 24,776 hectares, out of which Sindh had

a production share of about 24,113 tons from an area of 13,853 thousand hectares, with an

average yield of 1.74 tons per hectare. In Sindh, a small town of Kunri, once called the “Chili

capital of Asia” alone produces 55% of the province’s entire produce. Other cultivation hubs are

Mirpur Khas, Sanghar, Badin, Tando Muhammad Khan, Khairpur, Shikarpur, and Ghotki. The

main varieties from Kunri are desi, mexi, and nageena while talhari, a winter variety, comes from

Badin.

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The dried Chili industry in Pakistan has previously been one of the major success stories for

smallholders in semi-arid areas under low-tech irrigation. Smallholders often lack the means to

improve their crops with modern methods, and dried Chilies have added to their annual income.

However, during the past 10 years, food safety regulations have come into play in international

markets with the result of limiting the participation of Pakistani dried Chilies.

Oleoresins are extracted natural aromatic liquid containing essential oils and resin. They are the

concentrated liquid form of the spice/herbs/plants and reproduce the character of the

respective spice and spice oil fully. They are obtained by the solvent extraction of the powdered

dried spices with the subsequent removal of solvent or through the supercritical CO2 extraction

method. Oleoresins are highly concentrated and hence provide a very economical method of

flavoring products. They are also easier to control for quality, cleaner than the equivalent ground

spices and are more stable when heated. The main products in a spice oleoresin plant are

oleoresins of Chili, pepper, ginger and turmeric. The co-products are the corresponding spice

oils, which are widely used in food and pharmaceutical industries.

An excellent solution to overcoming the issue of Chili aflatoxins prevalent in Pakistan is opting for

Chili oleoresin production, which not only appreciably reduces the chances of aflatoxin infection

but also standardizes the product, giving rise to opportunities for entering more lucrative

international markets. Oleoresins provide a more complete flavor profile than essential oils.

Further advantages are the concentration at source of the product and the minimizing of color

losses (capsanthin breakdown).

To provide an alternative market and confront the issue of aflatoxin in Chilies and other

horticulture products produced in Pakistan, AMD proposes to mobilize private sector investment

in the commercial extraction of oleoresins from fresh products with a critical focus on Chilies. In

order to equip the Pakistani Chili industry and provide an alternate viable business solution, AMD

is considering supporting the investors in establishing oleoresin extraction plant to streamline

the supply chain, optimize profit margins, increase participation of women entrepreneurs, and

ultimately make Pakistani HV/OSV sector more profitable and more competitive.

AMD will support the private sector to establishment of a modern processing plant in Sindh

for oleoresin extraction through a matching grant with the objective of spurring private sector

investment in this new value addition technology and further linking them with the local and

international high end markets for increased profit margins on sustainable grounds. It has the

potential to result in spin-off investments after success has been demonstrated. AMD will also

link the extraction plant with high-end processors, red Chili grower associations and their

members to ensure sustainable supply. It is important to note that since the same technology

can be employed for the extraction of essential oils from other plant products and spices, the

program considers this venture to be extremely profitable and self-sustainable.

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Projected Outcome

The objective of this assignment is to provide technical input and assistance to the AMD

team to conduct a situation analysis study on oleoresin extraction and to write a report outlining

a proposed business model with the financial feasibility of an oleoresin extraction facility in

Pakistan to be used by the AMD team for further designing and development of Chilies Oleoresin

matching grant.

OVERVIEW OF AMD PROJECT

The U.S.-Pakistan Partnership for Agricultural Market Development (AMD) activity in Pakistan is a

USAID funded activity implemented by CNFA with the goal of supporting the development of

Pakistan’s commercial agriculture, particularly through improving the ability of Pakistan’s

agriculture and livestock sectors to meet both international and domestic demand and

requirements in targeted product lines in citrus, mango, high value/off season vegetables and

livestock. AMD envisions transforming the four targeted product lines into efficient, private

sector-led value chains that deliver competitive products to domestic and export markets. AMD’s

targeted training, matching grants, and technical assistance will leverage private sector

investment and encourage innovation. Together, these approaches will support upgrading,

streamline supply chains, optimize profit margins, increase participation of women

entrepreneurs, and ultimately make Pakistani meat, HV/OSV, citrus and mango more profitable

and more competitive.

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CHAPTER 1

1. INTRODUCTION TO CHILI

a. History

Chili is originated from the Latin American tropical regions of the South (New Mexico and

Guatemala) approximately 7500BC. The Mexico is considered the native home of Chilies.

Portuguese’s prior to 1585 brought hot Chilies from Brazil to Indo-Pak subcontinent.

The origin of Red Chili is marked by an interesting history. It all started by two mistakes when

Christopher Columbus thought he had sailed to India, whereas in 1492 he had actually

discovered the America’s, the New World. For this reason he believed the bushes with the

pointed red berries to be Chili, or Piper Nigrum, from South East Asia. The existing name Chili

was now adopted for a plant never seen before in the Old World. The Chilies were however a

good substitute for the highly priced black Chili and were successfully introduced for production

in Europe, whereas for black pepper this had not been possible due to climatic conditions.

The Spanish and Hungarian products traditionally produce around 100-150 ASTA on a ‘whole

pod’ basis. The most important factors influencing ASTA levels are variety, soils and nutrient

level, water availability and climate factors such as total rainfall, rainfall distribution, light

intensity and temperature variation. It is however impossible to quantify these factors. The

higher the ASTA value the higher the value of the fruit. On the contrary, the higher the

concentration of capsaicin, the substance responsible for the level of pungency, the less desired

the product and the lower the value of the fruit. The aroma, especially as in fruits from

Hungarian varieties, may command a premium.

b. Uses of Red Chili

i. Red Chili as a spice

The word ‘Red Chili ’is Hungarian and the Hungarians ‘invented’ the use of the red, dried and

ground Chili as a food ingredient. The Red Chili used for spices has a thin wall which facilitates

drying, but this makes them less crunchy and therefore spice varieties are less attractive for

fresh consumption. Nowadays, the use of Red Chili powder has spread all over the world.

Production of ready-to-use Red Chili powder requires the highest possible care during

production. Red Chili powder producers cannot sell directly to supermarkets and retailers,

because it is sold within a (very) large assortment of herbs and spices which supermarket buyers

prefer to buy as a whole, usually in special shelves and racks. Hence powder producers have to

sell in bulk to specialized wholesalers, who repack, store and subsequently distribute to retailers.

ii. Red Chili as a colorant

As already mentioned, the value of the Red Chili is in the color of the product, more than its

taste. Red Chili s derive their color in the ripe state mainly from carotenoid pigments, which

range from bright red (capsanthine, capsorubin and more) to yellow (cucubitene); total

carotenoid content in dried Red Chili is 0.1 to 0.5%. A distinct red color makes Red Chili wanted

as a natural colorant in the food and pharmaceutical industry. Colorants usually sold to

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specialized wholesalers and occasionally directly to the food or pharmaceutical industry. The

market value depends on the color intensity measure in ASTA. The minimum acceptable level is

180 ASTA, the maximum 350. Red Chili for colorants can be sold as compressed whole pods

(with or without the stem) or as flakes (pods, usually broken, without seed list and seed)

iii. Oleoresin of Red Chili

Oleoresin of Red Chili (ORC) is extracted from Red Chili powder. ORP producers buy either

dried whole Red Chili, dried Red Chili flakes (without the seeds) or Red Chili powder. The active

coloring ingredient is only 5-10% of the weight of Red Chili powder and it is increasingly used as

a substitute for it. ORC is a liquid and therefore, it substantially reduces the need for (expensive)

manpower for accurate dosing and transportation of ingredients inside the food or

pharmaceutical factory. Also essential is the minimizing of color losses (capsanthin breakdown).

The color loss in Red Chili oleoresin is reduced to approximately 1-2% per year only as opposed

to 2-4% per month in compressed whole pods and up to 5% per month in Red Chili powder.

These color losses are caused by oxidation and are greatly influenced by exposure to oxygen,

light and heat. ORC saves cost and is clearly the future for Red Chili colorants. The very high

value of ORC makes it attractive for Pakistan, as its competitive disadvantage of being landlocked

and having high transportation cost, hardly affects the C&F cost price.

a. Oleoresin capsicum: obtained from the longer, moderately pungent Capsicum used in the

production of red Chili. Commercial red Chili oleoresins are mainly used as a spice supplied in

pungency ratings between 80 000 and 500 000 Scoville units (approximately 0,6-3,9 % capsaicin

w/w) and a wide range of colour.

b. Paprika extract: obtained from varieties of C. annuum from which paprika powder is produced. It

has a high colour value, but little or no pungency. Commercial paprika oleoresin is available in

different colour strengths up to 150 000 colour units (equivalent to 10.8% total carotenoids).

c. Food quality and food safety

Since 1990,s food industries have become very demanding regarding product quality and

safety. In paprika, aside from the regular requirements for clean spices, levels of aflatoxin,

microbiological and pesticide contamination are strictly monitored. Further the trade has

become increasingly competitive whereby processors can only afford to be in business by using

high quality and efficiently operated, processing equipment.

d. Varieties

Chili varieties grown in Sindh are Ghotki, Loungi, Talhar and Sanam. The Ghotki variety is

grown in Ghotki, Khairpur, Shikarpur and Kotri in February and March. The fruits of this variety

are thin long, straight, or curved with little quantity of seeds inside. It is an early variety and

farmers get good price for this variety. Loungi is grown in Mirpurkhas, Nawabshah, Sanghar and

Tharparkar districts. This variety is familiar with growers because they get more prices. Its yield

potential is 35-50 maunds per acre. Talhar is grown in Badin, Thalhar and Tando Muhammad

Khan and some areas of Hyderabad. This is a late variety. Nursery is raised in June, July and

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transplanting done in August. Its fruits are long, thick, just like finger and straight. Fruits are less

pungent if supplied in green stages. Its yield potential is 80-100 maunds per acre. Sanam is

mostly grown in Karachi division, but is successfully grown in Mirpurkhas and Hyderabad

districts, also. This is grown both in winter and summer. Its fruits are long and cylindrical. The

collection and selection of Chili germplasm for resistance to diseases, tolerance to low and high

temperatures, high yield with good fruit shape and color should be the main goal

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CHAPTER 2

2. CHILI CROPPING SYSTEM

a. Introduction to chili cultivation

The Chili is a fruit of plants belongs to the family of "Solanaceae" and genus of "Capsicum".

The Chili is also being termed as "Chili Chili" in many parts of world. Chili is one of the most

important and the largest produced spice crop in Asia. The fruit is actually called "Chili" and is

used as a spice in a variety of cuisines all over the world in different forms as green Chilies, dried

red Chilies as a whole or in the form of powder. Basically, Chilies contain capsaicin, which gives a

strong burning tangy sensation when eaten and the red colour is because of the presence of

pigment capsanthin. Generally, Chilies are valued based on their high pungency and colour.

Production of Chili is very high in Asian countries due to high consumption. Commercial

cultivation of Chili is very much successful and one can expect decent profits in Chili farming due

to its market value in local areas and international markets (export market). Most of the people

think that Chili is native to India but it is originated from 'South America" and these were brought

to Asia by Portuguese at the end of 15th century. India is the largest producer, consumer and

exporter of Chili. Chilies can be grown in open fields, greenhouses, polyhouses, under shade

nets, pots, containers, even in back yards. The quality and production would be high if they are

grown in controlled environment such as greenhouses. Chilies can also be grown successfully in

hydroponic system.

b. Major Chili Producing countries

Major Chili growing countries are India, China, Ethiopia, Myanmar, Mexico, Peru, Vietnam,

Pakistan, Ghana, and Bangladesh. India tops among all of these in exporting Chilies. Among

these India is the largest grower of spices with 1492,000 Tons in 2014 and Pakistan produced

145,856 Tons of Chilies and peppers in 2014.

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Figure 2.1: Showing area harvested for Chili in Top producing countries of the world

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Figure 2.2: Graph showing Chili production of top 10 countries in the World

c. Nomenclature in different part of the world

Chili (English), Chilischote (German), Poivre de Guine (French), Capsicum Annum L. (Latin),

Pimento, Chile (Spanish), Spaansepeper (Dutch), Peperone, Peperoncino (Italian), Pimento

(Protuguese), Kovypyeret,KpacHbalnepeLt (Russian), Togarashi (Japanese), .;--11 FilfilAhmar

(Arabic), Hsiung - yali - chiao (Chinese), khursani (Nepali),ynaaHLiiiii>kyy (Mongolian), Papryczka

(Polish), Basbaas (Somali), T§illi (Estonian), milk' (Greek),_71_-T- (Korean), 4111111 (Serbian),

Llrinri (Bulgarian), Sili (Filipino), a (Mandarin), Chili (Norwegian), iiiviin(Thai),detpho'ikho

(Vietnamese), Nga Yote (Burmese), Latvian (Latvian), ardeiiute (Romanian), t 5.11. (Sinhalese),

MahTehs (Cambodian), Chladnjr (Czech), 4HnH (Macedonian),acibiber (Turkish),Upelepele

(Zulu), So c.,0 (Georgian), Chili (Danish), Cilimerah (Malay), .2Ait-I.A (Persian), eili (Slovenian),

,1001 (Taiwanese), c-rpyLiKoBi4 nepeLtb (Ukrainian).

d. Local names in Sub-continent

Chili is called with different names in different languages in India. Mirch, (Hindi, Punjab and

Urdu), Morich (Bengali), Marcha (Gujarati), Menessinakayi (Kannada), Marstu,Waungum

(Kashmir), Mulaku (Malayalam), Mirchi (Marathi), Lauka (Oriya), Miagai (Tamil), Mirapakayi

(Telugu), Mirchan (Punjabi), Jeevisaang (Konkani), Jolokiya (Assamese), Morok (Manipuri),

GaarhaaMirch (Sindhi), Marachwangun (Kashmiri).

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e. Season of Sowing in Chili Cultivation

Chili can be grown all around the year provided enough irrigation facility is available. In some

Asian countries. sowing will take place in January -February, June - July and September - October.

f. Pests and Diseases in Chili Cultivation

The following are the common pests found in Chili cultivation:

A. Aphids:

a. Symptoms: Aphids are small, succulent, pear shaped insects. Aphids attack the crop in winter

months and at the later stages of the crop. Due to this effect, the quality of pods will be

deteriorated.

b. Control Measures: Spraying dimethoate at 0.05% is effective for controlling these insect pests.

B. Thrips

a. Symptoms: This insect pest causes curling of leaves and fall down of flowers pre-maturely. This

pest will be sever at flowering stage though it can affect the crop its entire life cycle.

b. Control Measures: Crop rotation and weed control can reduce this pest. However. Treatment of

seeds with imidacloprid 70% WS @ 12 grams /kg of seed will also control these pests. Applying

carbofuran 3% G @ 33 kg /ha (or) phorate 10 % G @ 10 kg/ha will check these.

C. Fruit borer:

a. Symptoms: The caterpillar eats leaves and later on bores the pod. which results in the

deterioration of quality of the fruit.

b. Control Measures: Collect and destroy the damaged fruits and grown up caterpillars. Spraying

Bacillus thuringiensis @ 2 grams/liter of water will check this.

D. Broad Mites:

a. Symptoms: These mites suck the plant juice near the mid vein on the underside of the leaf

causing the Chili plant leaves to curl downwards. This causes to develop corky tissues on the

fruits.

b. Control Measures: How can we control these?, First and foremost, selecting pest resistant

cultivars (varieties) and weed control in the field, crop rotation help reducing the infestation.

However, spraying dimethoate @ 0.05% will also check this insect pest.

E. Mealy bug:

a. Symptoms: These bugs suck sap from the Chili leaves, tender shoots and the fruits. This pest

causes the leaves to become curly and ultimately fruit drops.

b. Control Measures: Spraying the crop with dichlorvos (0.02%) or quinalphos (0.025%) with fish oil

rosin soap effectively control these bugs.

F. Root knot nematode:

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a. Symptoms: This insect pest damages the root system by forming the small galls on the roots of

the plant. The effected plants become yellow and wilt. Warm weather and light sandy soils are

source of these pests.

b. Control Measures: Selecting resistant cultivars, crop rotation and flooded rice field help in

reducing nematodes.

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CHAPTER 3

3. SUPPLY CHAIN MANAGEMENT IN PAKISTAN

a. Cultivation zones

The agro-ecological suitability of the southern zone of the country to the production of

Chilies has resulted in the raising of 89.7 % of total production from Sind. Punjab produces 6.3 %

and Balochistan 3.4 %. KPK contributes only 0.6 % of total production. In Punjab, the main Chili

producing areas are Kasur, Okara, Pakpattan, Sahiwal, Multan, Sheikhapura, Khanewal, Vehari

and Bahawal Nagar. In Sindh, main Chili producing areas are Mirpurkhas, Hyderabad, Badin, and

Sanghar. In KPK, the main Chili producing areas are Mohmand Agency, Bajour, Dir and Kohat. In

Balochistan, the main Chili producing areas are KillaSaifullah, Khuzdar, Loralai and Musa Khel.

Figure: 3.1 Chili Growing areas in Pakistan

b. Land holding trends in Pakistan

Like many other developing countries where 45 to 80 per cent of the population derives its

livelihood, agriculture is the key-determining sector in the economy of Pakistan. Contribution of

agriculture to GDP in 2000-2001 was 24.6 per cent and in 2001-2002 it has declined to 24.1 per

cent. Size of land holding in Pakistan is very small and has decreased over time. Asper

Agricultural Census, there are 5.1 million farms in the country and 93 per cent of these are small

and marginal farms accounting for 60 per cent of the total cultivated area. The large farms are

only 7 per cent of the total farms accounting for 40 per cent of the total cultivated area. There

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has been further subdivision of farms because of inheritance and transfer. Since land in

agriculture production process is natural agent, therefore decreasing size of holding has

detrimental effect on investment, farm productivity and farm income resulting in 52per cent

poor Pakistanis.

Over the last one decade, agriculture grew at an annual average rate of 4.5 per cent. This low

growth rate is attributed to poor weather conditions and pest attack on crops. Agriculture has

also been suffering from various problems. Such as traditional methods of farming, low yields,

shortage of key inputs (credit, fertilizer, improved seed), adulterated pesticides, improper plant

protection measures etc. All these factors in turn stem from lack of funds and technical know-

how. Our recent study showed that for Chili growing is majorly located in Sindh and Punjab

where the land holding trend is quite different. 60 percent of the land holders in Sindh possess

between 40 to 80 acers or more than 80 acers, where as in contrast it is different in Punjab

where it is less than 10 percent. Small land holder i.e less than 10 acers in Punjab are more than

50% as compared to Sindh where it is below 10 percent.

Figure 3.2 Land holding trend in Punjab and Sindh

0%

10%

20%

30%

40%

50%

60%

70%

< 10 10 to 20 20-40 40-80

Punjab

Sindh

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Figure 3.3: Figure showing comparison between area harvested and yield since 2000

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CHAPTER 4

4. FOOD SAFETY AND QUALITY MANAGEMENT SYSTEM

a. Food safety and Quality situation in Pakistan

Globalization has added to the complexities of the food supply chain, making issues like food

safety, quality and logistics even more tortuous than before. What is needed is a comprehensive,

‘farm-to-fork’ approach to food safety. Food producers, processors and manufacturers are

turning to food safety management systems (FSMSs) as effective tools to manage this problem

all over the world.

With the rise in outsourcing, food and food products are being sourced from around the

world, making the supply chain very complex. The challenges of an already complex supply chain

increase when conflicting interests of various stakeholders across the value-chain come into

play. What is needed is a comprehensive ‘farm-to-fork’ approach to food safety.

Since no food manufacturer can guarantee food safety on its own and cannot take over the

food safety guarantees of its upstream suppliers, certification standards play a key role in

ensuring food safety. Independent third parties or certification organizations make the necessary

audits of the companies and suppliers involved during the entire value chain and issue a

certificate to confirm a successful audit.

In Pakistan only large scale industries and the industries exporting their products abroad are

interested in food safety systems due to customer requirements for export or corporate policies.

But what we require is to understand the importance of food safety systems in real sense i.e not

only to get the certificate but to implement the system at its best. A fully implemented food

safety system will ensure a safe and quality product from ‘farm-to-fork’. This will also reduce

product loss during processing and storage and also shelf life of the product will be more than

conventional practices.

On the other hand education and awareness is needed to be created among the consumer of

Pakistan so that they could ask for a safe and quality product from a certified source. This

practice can also encourage the industries to adopt the food safety systems.

Food safety systems which can be adopted from, ‘farm-to-fork’ are GLOBALGAP, SQF 1000,

ISO 22000:2005, HACCP, IFS, BRC.

b. Pre-Requisite Programs for Food Safety and Quality

The company has to establish, implemented and maintain PRP(s) to assist in controlling

(a) possibilities of introducing food safety hazards in the product through the work environment,

(b) biological, chemical and physical contamination of the product(s) including cross contamination

between products and

(c) Food safety hazard levels in the product and product processing environment.

The PRP(s) are

(a) Appropriate to the company needs with regards to food safety

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(b) Appropriate to the size and type of operation and the nature of the products being

manufactured or handled

(c) Approved by the food safety team

(d) All statutory and regulatory requirements related to above points are fulfilled

Company has considered the following in documented PRPs

a) Construction and layout of the buildings and associated utilities;

b) Lay out of the premises, including workspace and employee facility;

c) Supply of air, water, energy and other utilities;

d) Supporting services, including waste and sewage disposal

e) The suitability of equipment and its accessibility for the cleaning maintenance and preventive

maintenance.

f) Management of purchased materials (e.g raw materials, ingredients, chemicals and packaging),

supplies (e.g water, air, steam, and ice), disposals (e.g waste, and sewage) and handling of

products (e.g storage and transportation)

g) Prevention of cross contamination

h) Cleaning and sanitation

i) Pest control

j) Personal hygiene

k) All other aspects as appropriate

Company has to develop a verification plan and all the modification after verification are

recorded and maintained

c. HACCP based Food safety System requirements

i. Preliminary steps to enable hazard analysis

1. Food Safety team

The company has to appoint a food safety team which has a combination of multi disciplinary

knowledge and experience in developing and implementing the food safety management

system. This includes but not limited to the company’s products, processes, equipments and

food safety hazard within the scope of the food safety management system.

2. Product characteristics

The company needs to establish and maintain a documented description of raw materials,

ingredients and product-contact materials needed to conduct the hazard analysis, including the

following;

(a) Biological, chemical and physical characteristics;

(b) Composition of formulated ingredients, including additives and processing aids;

(c) Origin;

(d) Method of production;

(e) Packaging and delivery methods;

(f) Storage conditions and shelf life;

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(g) Preparation and/or handling before use or processing

(h) Food safety-related acceptance criteria or specifications of purchased material and ingredients

appropriate to their intended uses.

(i) All the regulatory and statutory food safety requirements related to above mentioned points are

identified and fulfilled.

3. Intended Use

Company has to establish, maintain and update a document which has the intended use,

expected handling of the end product and all other unintended but reasonably, expected

mishandling and misuse of the end product.

4. Flow Diagrams

Company has to establish, maintain and update flow diagrams for its products. Flow

diagrams provide a basis for the possible occurrence, increase or introduction of food safety

hazard.

Flow diagrams are clear, accurate and sufficiently detailed. Flow diagrams are as appropriate,

including the following the sequence and interaction of all steps in the operations;

- all outsourced processes and subcontracted work;

- where raw materials, ingredients and intermediate products enter floe ;

- where reworking and recycling takes place;

- where the products, intermediate products, by-products and waste are releases

or removed. 5. Identification and Traceability

The company needs to make provision for identifying status of products, where applicable,

by suitable means throughout product realization. Goods are stored in marked areas identifying

the type of goods. Different areas are designated to store conforming and nonconforming goods.

Goods ready for delivery are stored in Dispatch section.

The company’s products are uniquely identified in the form of finished products as follows:

Monogram/name.

Product name, Weight, Ingredients etc.

Barcode and Batch Code

Manufacturing date, Expiry date

The traceability of products is done according to demand sheet or gat pass in the form

customer complaint handling at the stage of finished products by Manager Food Safety

Assurance.

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CHAPTER 5

5. OLEORESINS OF RED CHILI

a. Global Market

The global oleoresin market is expected to reach USD 1.69 billion by 2022, according to a

new report by Grand View Research, Inc. Increasing flavors demand is expected to remain a key

driving factor for global oleoresin market over the forecast period. Shifting consumer

preferences towards natural ingredients over synthetic flavors is also expected to have a positive

impact on the market growth. Oleoresins are widely used in treating cancer, stress and back pain

owing to its antioxidant and anti-inflammatory properties which is expected to help in its market

development further. The global oleoresin market size was USD 449.4 million in 2015. Owing to its high temperature applications along

with favorable solubility characteristics, oleoresin is widely used as a flavoring agent in the food industry. Growing

market demand for packaged spices and spice mixes in food applications has assisted the overall market growth.

They mostly have their applications in salad dressings and coloring pickle products. They are mainly suited for high

temperature applications which consist of baking and frying. Besides, they are used widely as an additive in food

industry due to its solubility characteristics. Oleoresins are mostly preferred because of their microbiological

advantages, uniformity in flavor and aroma, ease of storage and transport.

Factors such as growing population, dynamic lifestyle, and increase in a number of fatal diseases across the globe

are anticipated to positively impact the market. These extracts are also used in pharmaceutical industry for

treatments related to back pain, distress and cancer. Oleoresin commonly derived from certain spices such as

turmeric and paprika are not only intended for their flavor but also for their intense coloring properties they offer.

Growing confectionery & baked food products demand in developed regions is presumed to aid the overall market

shortly. Changing dietary trends and food consumption patterns are expected to aid the confectionery & baked food

along with beverages demand.

Oleoresin extraction process involves huge investments in the preliminary stages, making the entry barriers high for

new entrants in the industry. India held over 50% of the overall production in 2015. Growing preference for natural

ingredients over synthetic colors and flavors among consumers are also expected to benefit the demand. Rising raw

material prices due to pesticide usage and reduction in cultivable land in recent past may have negative impact on

the market.

Current and Likely consumers of Oleoresins

Current users of imported paprika products are principally confined to the manufactured food sector, beverage and

food service sector. This sector continues to have growth of prepared foods, including, processed meats and

sausage, pizza and salsas foodstuffs. This sector is also dominated by major multinational corporations.

Consumption of foods using such additives for flavor and colorings is likely to increase reflecting such changes to

eating preferences and internationalization of cuisines and increasing use of prepared foods and increased use of

natural rather than artificial additives. With increasing concerns about artificial ingredients used in cosmetics and

demand for natural products, pigments and oleoresins from sources such as paprika. The nature of the

manufacturing companies involved in this sector is very wide-ranging, from niche product developers to global

cosmetic brand companies. The main implications are that such demand may be satisfied through targeted

marketing and matching of targeted specification, thus creating a differentiated market opportunity for producers.

At the core of this identification of new customers will be relationships which satisfy demands such as quality,

security and reliability criteria. From a regional perspective Japanese cosmetic industry may well be a prime target (J

Lancaster, 2009).

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The European Food Safety Authority has declared the usage of capsicum oleoresin as a potential feed additive for

chicken for helping them increase their fattening ratio. Such regulations are expected to assist the growth for

oleoresin market over the forecast period.

Several R&D initiatives has been taken to introduce oleoresins for aromatherapy applications. Recent advances are

being made to produce raw material components which are cheaper and are not affected by microbial

contamination.

U.S. oleoresin market volume by product, 2014-2024 (Tons)

High prices of oleoresins are expected to remain a key hindrance for their market

penetration. High initial investment cost may prevent new entrants from entering the market.

Several R&D initiatives have been undertaken by government to unlock potential applications

related to healthcare and to introduce less expensive oleoresins components which are not

affected by microbial contamination. Such trends are projected to create new avenues for

market participants.

The growing sense of scarcity is perhaps the single most important issue in the spice

sector at the moment. In the past decade, prices levels have increased significantly and the

sourcing challenge of buyers has increased. Together with many other changes in the supply

chain the future looks more uncertain than it has done in the past. Therefore, to what extent

scarcity is expected to be an issue for Chilies will be explored in this study. Different scenarios

will provide insights into what the future might hold and which are the related opportunities and

threats for exporters from developing countries.

Scarcity is on the agenda of the entire food sector and stakeholders are taking actions to

ensure future supply. It is clear that all agricultural markets will be directly or indirectly affected

by the effects of an increasingly tight balance between supply and demand. All product markets

however have a different dynamic and some will be more affected than others. In this document

the main question is to what extent scarcity will affect the Chili market in the coming decade (i.e.

2014- 2024). Related to this, the influence of the future balance between supply and demand on

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exporters in developing countries will be discerned.

b. Exporters of Oleoresins

Major exporters of Oleoresins are India, Brazil, Indonesia, Sri Lanka, USA, UK, France,

China, Bangladesh

Figure 5.1: Country wise export value of Oleoresin in Year 2015

c. Importers of Oleoresins

Major importers of Oleoresins are USA, UK, Saudi Arabia, China, India, Germany, Japan,

South Koria, Switzerland and others details of import in 2015 is given in below data

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Figure 5.2: Country wise Import of Oleoresin in Year 2015

d. Growing popularity of spicy food

Chilies are increasingly used to add taste, pungency and colour to food. Part of this is fuelled

by increased popularity of cuisines in which spices are widely used (e.g. Indian, Thai and Mexican

cuisine). 80% of the analysts polled by Euromonitor had observed an increase in interest in spicy

foods in the USA, around 60% in Europe Middle East & Africa, 45% in Asia Pacific and 40% in

Latin America (Euromonitor, 2014). The increased popularity of spicy foods will have a significant

influence on the demand for Chilies in regions where it is still relatively low (e.g. Northern

America, Europe, Oceania) as well as in those where it is already high (Asia and Africa). "Paprika oleoresin held over one third of the revenue share in 2015"

Major products include paprika, black pepper, capsicum, turmeric, garlic, ginger, onion, and others. Some other

products include cinnamon, fenugreek, rosemary, savory, vanilla, tamarind, cocoa, mustard, white pepper,

coriander and west Indian bay leaves. Paprika emerged as the leading product segment and accounted for over 25%

of total market revenue in 2015.

Paprika product type produced by extraction of lipids and pigments from sweet red pepper pods find applications in

processed food including snack food seasonings, food coatings, sausage, dressings and dry soluble seasonings. This

is anticipated to spur the demand for paprika oleoresin over the forecast period.

Black pepper helps in stimulating the appetite and also helps people suffering from nausea, dysentery, and

dyspepsia due to its anti-inflammatory and insecticidal properties. Capsicum oleoresin are gaining wide popularity

among law enforcement officers and police agencies due to its usage as pepper spray, which serves as an effective

mechanism to deter any danger faced by individuals.

"Flavor was the largest application segment in 2015"

The major application includes food & beverage, flavors, pharmaceuticals and others. Some other applications

include meat canning, sauces, confectionary, perfumery & soap and as a base in various seasoning applications.

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Flavors accounted for over 35% of the overall market and emerged as the leading segment followed by food &

beverages. Growing demand for flavors can be attributed to shifting consumer preferences to participate in diet and

lifestyle management. Spice oleoresins are especially used as a seasoning agent in fast foods.

Oleoresins Chili contain capsaicinoids which are widely used to cure cardiovascular and gastrointestinal diseases.

They contain inherent properties such as analgesic and anti-obesity which is found useful for cancer treatment.

"Europe held over one-third of revenue share in 2015"

European oleoresin market led the global industry with demand share exceeding 30% in 2015. Countries such as

Germany, UK, Romania and Hungary accounted a large share in the regional spice market. Growing consumption of

ethnic foods has resulted in increased consumption in the regional market.

In addition, changing lifestyle coupled with growing consumption of healthy natural food has resulted in a positive

demand in the recent past. These resins used in food and beverages industry are used by a wide range of consumer

groups.

"Few companies hold a large market share of the overall output"

The global oleoresin market is concentrated in nature with fewer companies holding a major share in the industry.

The global industry is expected to witness an increase in mergers, acquisitions and strategic alliances over the next

seven years.

Major companies include Universal Oleoresins,

1. Ungerer & Company,

2. Plant Lipids,

3. Akay, Synthite,

4. AVT Natural Products Ltd,

5. Indo World, Paprika Oleo’s,

6. Paras Perfumers,

7. Ambe Group,

8. Asian Oleoresin company,

9. Cymbio Pharma Pvt Ltd

10. Bioprex Labs.

e. Developing countries catching up to strict buyer requirements:

There is a positive correlation between a country’s income and the restrictiveness of its

import standards on agriculture goods (World Bank, 2013). Therefore, developed countries such

as the EU and the US have strict buyer requirements regarding food safety, quality and

traceability. As an effect of these stringent requirements, industry sources state that trading

prices of Chilies bought by the EU and US can be up to 20% higher. This has two reasons: 1) the

premium paid to farmers and suppliers for maintaining the land, applying Good Agricultural

Practices and Good Manufacturing Practices, better storage; and 2) Stocks are lower, so buyers

have fewer opportunities to source and wait for prices to drop.

Buyer requirements in developed countries will not ease up. To the contrary, it is likely that

requirements will continue to become stricter as a result of increased detection possibilities and

scientific insights. A recent example is the stricter limit for Aflatoxin A for capsicums (effective

from 1 January 2015) set by the EU.

With the strong economic development and growing awareness of food safety, standards

will also become stricter in countries such as India and China (World Bank, 2013), which are

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important consumers of Chilies. The Indian Spice Board has already pushed towards further

harmonisation of international food safety standards for spices. This means that producing

countries such as India will work more towards complying with stricter limits set by the US and

the EU. The difference between buyer requirements in developed and developing countries is

expected to become smaller but will remain significant. The share of Chilies that comply with

stricter buyer requirements will therefore have to increase.

f. Competitive analysis

Competitive advantage for low cost countries By 2030, real Chinese wages would have

increased by 300% to an average of $ 2,052 per month. Indian wages would increase even faster

(+370%) but will remain relatively low ($ 616 per month). Due to a strong increase of wages

China will become less important as a low cost production location to favour for countries like

India and Pakistan (PricewaterhouseCoopers, 2013). This will benefit countries where wages are

lower and/or are expected to increase less or even decrease: Peru (-1%), Thailand (1%) and

Bangladesh (+67%) by 2030 (Trading Economics, 2015).

The limited availability of land in China and India is increasing prices of arable land. Additional

arable land is more readily available in Latin America, the Caribbean and Sub–Saharan Africa

(OECD, 2014). Sub-Saharan African has vast amounts of uncultivated land – close to half of global

availability, untapped water resources and large scope for improvements in inputs to increase

yields (Deutsche Bank, 2013). As a result it will become more attractive to produce in those

regions in the coming decade.

India exported Chili oleoresin worth USD 38,439,377 with total quantity of 2,472,647. China

is the largest buyer of Chili oleoresin accounting for exports worth USD 35,043,471 followed by

South Korea and United Kingdom which imported Chili oleoresin worth USD 2,335,623 and USD

294,159 respectively.

g. China as potential market

China market can be a big potential for Pakistani Oleoresin in future. As currently china is

importing a huge amount of oleoresin from India and most of the trade is being done by air

which no doubt is an expensive way of transport. China Pakistan economic corridor would be

cheapest way to trade between Pakistan and China. And if can tap this potential we would have

edge over all world as being the most economical for China i.e around 65% cheaper in transport

than the world.

h. Introduction to other spices

1. BLACK PEPPER (PIPER NIGRUM)

Extraction

Essential oil by steam distillation from the dried & crushed peppercorn.


A very important stimulant in the treatment of certain digestive disorders, constipation, loss

of appetite. It helps cold and can be used as a sexual tonic, might help in diarrhea, flatulence,

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pains, and poor circulation. As a Carminative it can be added to foods. Occasionally used in

blends for energetic enhancement. Used for toothache and externally for joint and muscle

aching.

Caution

It is Non-toxic, non-sensitizing, Irritant in high concentration due to its rubefacient

properties. Use in moderation only.

2. CARDAMOM (ELETTARIA CARDAMOMUM )

Extraction

The oils are distilled from the Plants.


The Cardamom of commerce consists of the dried ripe fruit of Elettaria Cardamomum. There

are two varieties of this species.

1. Var. minuscule Burkhill, also called Alpha Minor.

2. Var. Bita Major, also called Elettaria major, or Long Wild Cardamoms.

Cardamom fruit is official in most pharmacopoeias. However, the United States and the

British Pharmacopoeias confine the definition of cardamom to the decorticated seed only;

moreover, the British Pharmacopoeia requires that the seed must have been recently

removed from the capsules.

Like the spice itself, the essential oil is employed widely for the flavoring of various food

products, such as cakes, confectionery, ginger-bread, sausages, and pickles. It finds use also

in spicy table sauces, curry preparations, and in certain bitters and liqueurs.

Medicinally, the oil is frequently employed as an adjuvant or corrective of tonic, carminative,

and purgative preparations.

3. CASSIA (CINNAMOMUM CASSIA)

Extraction



Cassia are contains medicinal qualities similar to cinnamon but its smell is sweeter and more

pleasant. It is used to give colors to many perfume blends. In certain areas the primitive

distillation apparatus, still used, contains copper piping which gives a red tone to the

oil. Rare because it comes from China and Vietnam .

Caution

Its too much used can be irritating to the

skin.

4. CELERY (APIUM GRAVEOLENS L.)

Extraction

Essential oil by steam distillation from the seeds .


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Celery is today widely cultivated in the temperate zones as an important garden crop, the

bleached leaf stalks being relished as a popular vegetable. The volatile or essential oil

distilled from Celery seed is used extensively for flavoring purposes. Celery seed located in

Southern France , India , and lately also in California . Use of this oil – Canned soups and

meats, sausages, and particularly in the flavoring of the popular celery salts, celery tonics,

and culinary sauces. Celery seed oil is one of the most valuable flavoring agents, imparting

warm, aromatic, and pleasing notes to food products.

OLEORESIN CELERY :- The so – called Oleoresins of celery have in late years attained ever –

increasing popularity among food producers. These oleoresins are prepared by extracting

celery seed with volatile solvents, filtering and freezing the solutions, and driving off the

alcohol in vacuo. Depending upon the solvent used, the consistency, appearance and flavor

of the resulting oleoresins will vary.

5. CINNAMON (CINNAMOMUM ZEYLANICUM)

Extraction



Cinnamon is one of the best oils for circulation, especially during menopause. It improves

sexual function, increases sexual desire, and improves digestion and appetite. Because it

enhances circulation, it is very supportive of the heart. It is empowering to the

will. Cinnamon bark oil has a high percentage of aldehyde and is not recommended for use

on the skin as it can be irritating. Cinnamon leaf oil has a very low percentage of aldehyde

and is more suitable for use in liniments or message oils.

Caution

Do not use in condition of high pitta ; will aggravate bleeding disorders; skin irritant in high

dose; convulsive in high

doses.

6. CLOVE (CAROPHYLLUS AROMATICUS)

Extraction

Clove are actually the unexpanded flower buds of the clove tree.


Centuries before Christ, envoys to the Han court of China held clove oil in their mouths to

freshen their breath during audiences with the emperor. Later, the oil was to serve as

a Protective agent against the bubonic plague. Clove oil is one of the most effective

antiseptics known, good for treating infections, especially colds and flu. It is often an

ingredient in commercially available mouthwashes and digestive tonics and will bring a

welcome numbness if applied topically for toothache or sore gums.

Caution

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All clove oils can cause skin & mucus membrane irritations, because of the eugenol content.

Use in moderation, in very less dilution.

7. CORIANDER (CORIANDRUM SATIVUM)

Extraction

The oil is distilled from the leaves.


This fresh herb is also known as cilantro or Chinese parsley, and is a favourite in Mexican

food. The essential oil is produced from the seed, is an antidote to hot food, very

decongesting to the liver, and is a great reducer of fire and heat in the body. It is thought to

be an aphrodisiac because of its phyto-estrogen content. It`s also a carminative, stimulating

digestion.

Caution

Except high Vata with nerve tissue deficiency; may cause kidney irritation in high dose, do

not take during pregnancy.

8. FENNEL (FOENICULUM VULGARE)

Extraction

The oil is distilled from the roots.


Fennel is another essential oil from the carrot family. It is useful during pregnancy to prevent

morning sickness, and is excellent for the traveler, helping to reduce or prevent sea

sickness. One of the most important carminative oils, it is useful for upset stomachs, gas,

flatulence, indigestion and is traditionally used in Indian restaurants in herb form as an after

dinner promoter of digestion. It has been recommended for reducing stomach acidity and

prevention of ulcers.

9. GARLIC (ALLIUM SATIVUM)

Extraction

Essential oil by steam distillation of the roots.


The bulbs or cloves of the common garlic have been used since antiquity, particularly in

Mediterranean Countries, as a popular prophylactic and curative against all kinds of intestinal

ailments chronic infections of the stomach and the intestines, dysentery, typhoid fever,

cholera, etc and even against arteriosclerosis and hyperpnea. Phoenician sailors carried

good stocks of garlic on their long sea voyages. Oil of garlic has lately come to be appreciated

as a valuable flavoring agent, for use in all kinds of meat preparations, soups, canned goods,

and table sauces.

10. GINGER (ZINGIBER OFFICIANLIS)

Extraction

The oil is distilled from the roots, plants

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Ginger is one of the most commonly used herbs in Ayurveda and Chinese medicine. Because

of its digestive properties, it is without peer in cases of illness due to poor absorption and

assimilation. Its wonderful for regulating the blood, for motion sickness, weight loss; Its

helpful in bringing any condition in to balance. For sea sickness, air sickness, or problems in

balance use it on a small circular bandage behind the ear. Light often adds it to her bath on

cold mornings and to daily skin massage lotion in the winter.

Caution

Don’t use if inflammatory skin diseases, high fever, bleeding, or ulcers are present.

11. NUTMEG OIL (MYRISTICA FRAGRANS)

Extraction

Essential oil by steam distillation or water distillation from the dried nutmeg seeds.


May be useful in pains, aches, poor circulations, rheumatism, sluggish digestion, impotence,

nervous fatigue, bacterial infection etc. It is said to be very calming. When diffused before

bedtime, nutmeg is said to promote dreamtime. Both oils and oleoresin are used in most

major food categories, including alcoholic and soft drinks.

Caution

Generally non-toxic, non-sensitizing & non-irritant. But use only in moderation only.

However, used in large doses it shows signs of toxicity such as nausea, stupor, and

tachycardia, believed to be due to the myristcin content.

12. TURMERIC (CURCUMA LONGA)

Extraction

The oil is distilled from the Roots.

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CHAPTER 6

6. PRODUCTION TECHNOLOGY OF OLEORESIN

RCO is extracted from Spice Grade Red Chili Powder which is treated with solvents, usually

Hexane. The crude extract is further treated with a polar solvent, usually methanol, to separate

the color (Oleoresin of Red Chili) from the pungent fraction (oleoresin of capsicum). Next, the

solvents are recovered under distillation. The solvent removal is a sensitive operation, which

results in two types of product i.e. solvent at or above 25 ppm and solvent below 25 ppm. For

the factories the first products is the prime product and the second the second grade. Both are

used exclusively by the food and pharmaceutical industries as a substitute of ground spices and

spice tinctures.

a. Methods and extraction

Previous studies associated with the research conducted by the University of Sydney and by

Invetech (report: Commercialisation Potential of Paprika Technology 2004) identified several

extractive systems. These include:

1. Hydrocarbon based solvent

2. Flourocarbon based solvent

3. Super-critical CO2

4. and others

It is premature to speculate on what process is likely to be the most relevant system for any

potential paprika products as this entirely depends upon such factors as:

the regulatory position at the time and the desire to phase out some usages of systems being

seen as damaging to the environment and potential risks in the food chain products,

the particular targeted markets for the products

the specific nature of the paprika grown and pre-processed

the degree and preparedness to further innovate to find new solutions and technologies to

exploit the opportunity.

Also a significant difference will be whether a potential extractive process will be

incorporated into the total venture to make a vertically integrated business unit rather than a

series of separate businesses. Should a vertically integrated business be created it is suspected

there would be a better chance of capturing a greater degree of total benefits available rather

than each phase of business being separate “toll-based” deliveries

b. Supercritical Fluid Extraction (SCFE) Technology

i. Potential of SCFE:

Worldwide, Supercritical Fluid Extraction (SCFE) Technology has emerged as a superior

alternative to the conventional techniques for extraction of natural products in food,

pharmaceutical and chemical industries. India with its rich botanical resources has very high

potential for the use of SCFE to achieve value addition to its traditional export of natural

of 46

materials in raw form. Thus use of SCFE technology can help Indian industry to gain its share in

rapidly growing international market for high quality, value added natural products.

ii. Applications

• Spice extracts (oil & oleoresin)

• Flavours& fragrances

• Food colours

• Food preservatives

• Herbal medicines

• Pesticides (neem)

• Decaffeination (coffee & tea)

• Hop extracts (bitter)

• Deoiling of fast foods

• Cholesterol free food products

• Nicotine / tar free tobacco

iii. Challenges:

Compared to traditional extraction technologies, SCFE is comparatively more capital-

intensive due to the requirements of high pressure operation (100-500 bar) and very accurate

process control. But more importantly, the high premium charged by foreign equipment /

service providers based on novelty of this technology substantially increases costs of SCFE plants,

making the imported SCFE technology economically not attracted

iv. What is SCFE?

SCFE is a two-step process which uses a dense gas as a solvent e.g., carbon dioxide (CO2) for

extraction, above its critical temperature (31oC) and critical pressure (74 bar). The feed, generally

ground solid, is charged into the extractor.

Supercritical CO2 is fed to the extractor

through a high pressure pump (100-500 bar).

The extract laden CO2 is sent to a separator

(60-120 bar) via a pressure reduction valve. At

reduced temperature and pressure conditions,

the extract precipitates out in the separator.

The extract free CO2 stream, leaving the

separator is then recycled to the extractor. In

the case of liquid feed, the extractor is

modified into a column through which feed

and the supercritical CO2 is fed either co-

currently or concurrently

Figure 6.2: SCFE Plant

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Pakistan with its rich botanical resources has very high potential for the use of SCFE to:

• Achieve value addition to its traditional export of natural materials in raw form.

• Gain share in rapidly growing international market for high quality natural products.

However, SCFE is comparatively more capital-intensive, due to the requirements of high

pressure operation (100-500 bar) and very accurate process control. In addition, the high

premium charged by foreign equipment / service providers based on novelty of this technology

adds substantially to the cost of SCFE plants, making the imported SCFE technology economically

non-viable in developing countries like Pakistan. Thus indigenous innovative design,

development and manufacture of SCFE plant & equipment to optimize the capital investment

and availability of technical support services locally, represent the key requirements for in

adopting SCFE in Pakistan.

c. Solvent Extraction Unit

Oleoresins are obtained from spices by extraction with a non-aqueous solvent followed by

removal of the solvent by evaporation. To start with various raw spices are cleaned and then

ground to the required mesh size. Then extraction is undertaken with the help of proper solvent.

Solvents that can be used are hexane, acetone, ethylene dichloride, or alcohol. Extraction is done

by percolation of the solvents at room temperature through a bed of ground spice packed in a SS

percolator. Then the dark viscous extract containing not less than 10% of total soluble solids are

drawn off and distilled under reduced pressure to remove the excess of solvent. The essential oil

is obtained by steam distillation.

A typical flow chart is shown below

Cleaning and Grinding

of spices

Extraction with the help of solvent

Distillation of the extract

Recovery of the Solvent

Blending and packaging

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Therefore the capsicum or chilly oleoresin is a viscous liquid derived by polar solvent

extraction from ground powder of any Capsicum species; there are three types of oleoresin:

paprika (used for colour), red pepper (used for colour and pungency), and Capsicum (used for

pungency).

The main attributes of solvent extraction unit include:

Low flow resistance

Very durable

Require low maintenance

Established and time tested engineering

No marginal deviations in gravities

Ensured complete recovery of product

Fig 6.3 Typical Solvent Extraction Unit

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i. Supplier of Solvent Extraction Unit

1. USA

a. Precision Extraction Solutions Corporate Headquarters 4820

Delemere Ave Royal Oak, Michigan 48073 USA Email:

[email protected] Call Us: 855-420-0020

2. India

a. Flour Tech Engineers Pvt Ltd, 16/5, Mathura Road,

Faridabad 121 002 Tel. No.: 2263017, 2291556, Fax:

2291556

b. Flavourite Foods & Services Pvt. Ltd, 208 Manas Bhavan, 11,

RNT Marg, Indore 452 008

Tel.No.2527644,5046509,Fax:5040953

c. FMC Technologies Hong Kong Ltd, 2 Bhuvaneshwar Housing

Soc, Pashan Road, Pune 411 008 Tel. No. : 5893700, Fax:

5893701

d. SS Engineering, B-24, Khanpur Extension, New Delhi 110

062, Ph: 26081475, 9810217935

e. Sahyog Steel Fabrication, 28 Bhojrajpara, Gondal 360 311

Tel. No. : 224075, Fax: 231375

f. Cowel Can Ltd, Industrial area, Post Barotiwala, Dist. Solan

(HP)

ii. Design, packaging and storage

Oleoresins are packaged in resin lined steel drums of 50 or 200kg capacity, according to the

buyers’ preferences. The drums are imported from abroad and are food grade types. Oleoresins

should preferably be stored in tight full containers in a cool place protected from sun light.

mailto:[email protected]

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CHAPTER 7

7. Financial Suitability of the Project

a. Super Critical Method

i. Variable cost structure

Dried Red Chili makes up 75% of the variable costs for oleoresin production or 1100 PKR per

kg (see Table 7.2). Solvent used in the production process are totally imported from abroad and

represent 1% of the total costs. The other production cost (production labor, steam, electricity,

water) amount to only 25% or 373 PKR per kg. The cost of the drum including poly line bag and

label is just 50PKR per kg.

ii. Investments

Production of RCO requires a piece of land of 10,000 sqft and a building of 5000sqft. The

estimated investment required for land and buildings is PKR 30 million

In addition, equipment of the CO2 Extraction plant needs extraction equipment and

packaging equipment as well as a complete set of utilities. Such equipment with a capacity of

250 Kg capacity will require an investment of about PKR 150 million. Including engineering and

commissioning of the equipment as well as unforeseen, the total fixed investment for the CO2

extraction plant is about PKR 200 million and with a depreciation of 8% the annual fixed cost is

PKR 4 Million. In addition, salaries of fixed staff and other overheads add another USD 337,500

to the fixed cost every year aprox PKR 1.4 Million

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Table 7.1 Conversion factors of transfer of SGCP (Specific Grade Red Chili Powder into ORC (Oleoresins Red Chili)

Sr # Step in process Name of product Weight before Weight Loss % Moisture Loss % Weight After Weight Reduction % Of Start Weight

1 Fresh Red Chili after harvest

Fresh for consumption 89.00% 100.00%

2 Drying Red Chili Semi-dried for processing

0.00% 25.00% 36.00%

3 Picking, cleaning, selection Semi-dried, sorted 10.00% 25.00% 68% 32.40%

4 De-seeding, de-stalking Semi-dried Red Chili De stalked

26.00% 25.00% 24.00%

5 Sun drying Dried Red Chili 2.00% 12.00% 20.40%

6 Ggrading, packing, transport

Dried Red Chili 2.00% 12.00% 38% 20.00%

7 Factory drying Dried Red Chili 5.00% 12.00% 19.00%

8 Grinding and sieving Dried Red Chili powder 1.00% 8.00% 18.10%

9 Storage and transport Dried Red Chili powder 0.50% 8.00% 10% 18.00%

10 Intake inspection Dried Red Chili powder 0.10% 8.00% 18.00%

11 Extraction Oleoresin of Red Chili 93.00% 0.00% 94% 1.16%

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Table 7.2 Return on Investment for CO 2 Extraction unit

Unit

specifications

Pro

cessing

Capacity

kg

Cy

cle Run

Time (H)

C

O 2

Recovery

time

T

otal

run

time

per

cycle

R

uns per

day

(Assume

12 hr)

T

otal

machine

run

time per

day

(hours)

t

otal raw

material

avg

yield

A

verage

yield

per run

a

vg yield

per day

(kg/day)

rev

enue

earned

ra

w

material

cost

l

abour

cost

per

day

maint

enance cost

per day

el

ectrical

cost per

day

c

o 2

cost

per

day

total

daily

operational

cost

equipme

nt cost

100

liter/550 bar

22

5

1

0

1.

5

1

1.5

2 2

3

4

50

10

.00%

2

2.5

4

5

11

2500

4

9500

4

800

200

0

8

000

2

000

66

300

15000

0000

Table 7.3 Return on Investment for Solvent extraction Unit

Unit specifications

Per Run Capacity KG

Time per Run Hour

Runs per day

Material required per day

avg yield

Average yield per run

avg yield per day (kg/day)

revenue earned

raw material cost

labour cost per day

maintenance cost per day

electrical cost per day

Solvent Cost

total daily operational cost

equipment cost

PX40 “The Executioner”

45

3.5

6 270

10.00%

4.5

27

67500

35100

2000

1000 5000

2000

45100

Aprox 40000000

41

Contract#:AID-391-C-15-00003

Page 41 of 46

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Table 7.4 Utility Cost for both CO2 and Solvent Extraction

Raw Material Cost per Liter of Oleoresin 1100 per Liter

Operational Cost per Liter of Oleoresin 373 per Liter

Total Cost per Liter of Oleoresin 1473 per Liter

Selling Price of Oleoresin 2500 per Liter

Margin per Liter 1027 per Liter

Table: 7.5 Summary Financial Details

Capacity 225 KG

Per Day Yield 45 KG

Raw Material Cost 110 Per KG

Oleoresin Price 2500 Per Liter

Building 10000 ft2

Cost of Building @1700/sqft 17 million PKR

Office furniture and equipment 100000 Aprrox in PKR

Electricity consumption per day 600 KWH

Labor Cost 800 PKR / person/shift

Current Electricity cost per KWH 13.5 PKR

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Conclusion

1. Kunri in Sindh and Multan in Punjab are the best suitable locations for Oleoresin Plant

2. Pakistan has good potential for production of Oleoresin from Chili, Turmeric, Ginger, Onion,

Garlic, coriander and many other spices found in abundance in Pakistan

3. China would be a big potential for export with a competitive edge over all world for

transportation (CEPAK)

4. Chilies from Pakistan are Apox 5% more in recovery, pungency and color value as compared to

international specifications.

5. More than 10 Major companies in Pakistan are importing Oleoresin from India and other

countries.

6. Global oleoresin market demand was 14.4 kilo tons in 2014 and is expected to reach 20.3 kilo

tons by 2022, growing at a CAGR of 4.4% from 2015 to 2022

7. Paprika emerged as the leading product segment and accounted for 36.7% of total market

volume in 2014. Turmeric is expected to witness the fastest growth of 4.7% over the forecast

period. Recent advances by pharmaceutical industries to use turmeric oleoresin to reduce stress

and depression among people is expected to drive this segment over the forecast period.

8. Flavors were the leading application segment and accounted for 37.1% of total market volume in

2014. Growth of flavors industry in high growth markets of Asia Pacific and Latin America is

expected to drive this segment over the forecast period. Pharmaceuticals are expected to

witness the highest growth of 4.8% from 2015 to 2022.

9. Europe emerged as the leading regional market with demand share estimated at 26.8% in

2014.Countries such as Germany, Hungary, UK and Romania are anticipated to lead their

regional market over the next seven years. Rising consumption of ethnic foods is expected to

assist the regional market growth.

10. Asia Pacific is expected to witness the highest growth of 4.9% over the forecast period.

Increasing urbanization coupled with growing health awareness particularly in emerging markets

of India and China is expected to drive the regional market over the forecast period.

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References:

1. S. Bavu 2012; India’s spice oleoresin industry: way forward initiatives

2. Chemical and Technical Assessment of Paprika Extract 2008

3. Scarcity of Spices – Chilies: Future expectations on supply and demand: a case study on

the global market for Chilies. CBI 2015

4. Natural Colours, Flavours and Thickeners; CBI Trade Statistics 2015

5. Paprika A Scoping Study of the Market and Value Chain 2009

6. Types of Oleoresins and definition

7. Preparation of Paprika as an Industrial Ingredient in Burkana Faso

8. Profile on production of Oleoresins in Ethopia

9. G. N. SAPKALE; Super critical fluid extraction 2010

10. https://precisionextraction.com/botanical-extraction-equipment/

11. Chili Oleoresin Specification

12. Super critical processing technology IIT Bobmay India

13. J Lancaster, 2009 Paprika: A Scoping Study of the Market and Value Chain

14. http://akay-group.com/science-oleoresins/

15. http://www.swarajherbal.com/solvent-extraction-unit.htm

16. Chili Prices in Pakistan

17. http://www.pakissan.com/english/reportcenter/market.prices/lahore.market.shtml

https://precisionextraction.com/botanical-extraction-equipment/

http://akay-group.com/science-oleoresins/

http://www.swarajherbal.com/solvent-extraction-unit.htm

http://www.pakissan.com/english/reportcenter/market.prices/lahore.market.shtml

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45

Annex IV:

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Prepared for review by the United States Agency for International Development under USAID

Contract No. AID-391-C-15-00003, U.S.-Pakistan Partnership for Agricultural Market Development

(AMD) Activity in Pakistan implemented by CNFA

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