Manuscript Number: 3195

Indian Journal of Ecology (2021) 48(1): 210-215 NAAS Rating: 4.96

Growth, Geographic Concentration and Stability Analysis of

Coir Products Export from India

M. Anoop, C.N. Anshida Beevi1 and R. S. Bhawar2

Department of Agricultural Economics, Banaras Hindu University, Varanasi- 221 005, India
1
Transfer of Technology Section, ICAR- Central Research Institute for Dryland Agriculture, Hyderabad- 500 059, India
2
Faculty of Agriculture, Sri Sri University, Cuttack-754 006, India
E-mail: anoopmangalasseri@gmail.com

Abstract: Coir is an important export commodity, giving income and employment opportunity to a number of people across the country.
Present study tries to analyse growth and instability of coir products export to major importing countries and also looks into the geographic
concentration and stability of direction of trade. Highest growth rate in export quantity (85.66%) and value of export (81.71%) was for China,
whereas growth in unit value of export was highest for South Korea (7.47%). High instability in export quantity, value of export and unit value
was found for China. Most other importing countries were having low instability, except unit value of export to UK and USA. Geographic
concentration was not much high either for quantity or value of export. Markov chain analysis showed China as the most stable importing
country with high probability of retention (0.89), whereas, South Korea emerged as the most unstable importer with least probability of
retention. Interventions are needed to ensure increasing share of high value coir products in the total export quantity by reducing the share of
low value coir products in order to improve the amount of foreign revenue realized through the export of coir products.

Keywords: India, Coir, Export, Geographic concentration, Stability

Indian coir industry is one of the most important agro- employment opportunities and generation of income in the
based cottage industries contributing significantly to the rural sector (MSME 2019).
economy of the country. It is a labour intensive and export India accounts for more than two-thirds of the world
oriented traditional cottage industry employing around seven production of coir and coir products which are exported to
lakhs coir workers of which 80 per cent are women. more than 110 countries. China, United States of America
Processing activities centred on it provide employment (USA), Netherlands and South Korea are the main buyers of
opportunities to people in rural areas of coconut producing coir products from India. China is the principal buyer of coir
states of the country viz. Kerala, Tamil Nadu, Karnataka, products from India with market share of nearly 40 per cent of
Andhra Pradesh, Telangana, Odisha (Coir Board 2018). It is total export quantity. The export of coir and coir products from
biodegradable, eco-friendly, and can be used for multiple the country touched an all-time high record of 9,88,996
purposes in different forms and, contributes to resource million tonnes valued at Rs.2757.90 crore during the year
conservation and ecological balancing. Since coir is a labour 2019-20, which is around Rs.30 crore higher than that of the
intensive and export-oriented industry that provide ample last year (2018-19). The domestic and international markets
employment opportunities and export revenue, government for coir and coir products show an increasing trend during this
has also played a vital role in reviving the lost fame of this period. Hence, there is further scope for making better
traditional Indian industry by introducing various schemes returns for the entrepreneurs if they can tap these growing
and programmes to promote it. The opportunities to initiate markets (PIB 2020). Since a number of competitors have
manufacturing of value-added products and introducing emerged during the past few years, and are eating into the
schemes like SFURTI (Scheme of Fund for Regeneration of market share of Indian coir products in many major importing
Traditional Industries) and Coir Udyami Yojana has given countries, it is important to look into the export performance
wings to this golden industry. With the concerted efforts of the of Indian coir products at a disaggregate level at each major
Coir Board and the State Governments, the production of coir importing countries. In this backdrop, the present study
and its value-added products in the major coconut producing attempts to analyze the performance of export of coir
States have been making a steady progress for the last few products from India to major importing countries in terms of
years. The promotion of the coir industry in the traditional and growth, instability, geographic concentration and stability of
non-traditional coir producing states has enhanced direction of trade.
 Coir Products Export from India 211

2
MATERIAL AND METHODS n
 X it 
Time series data on export of coir products from India Hirschman Index, HI = 100  
i1  X t 

during 2003-04 to 2018-19 was used for the analysis.
Country-wise yearly export data was collected from Coir Where, xit is the value of exports of coir products from
Board and Indiastat websites. For better understanding of the th
India in year t to the i market, xt is the total value of coir
scenario at different time periods, the data were divided into products exports from India in year t and, n is the number of
two sub-periods viz. Period I: 2003-04 to 2010-11 and Period countries importing coir products from India.
II: 2011-12 to 2018-19. Analysis were conducted for each of The highest possible value of the coefficient is 100,
these sub-periods separately, and also for the combined time which indicates that the country exports to only one
period. Five major importing countries, namely USA, China, destination. When the value of the coefficient is lower, the
Netherlands, UK and South Korea were considered for the greater is the number of export markets and vice versa.
analysis based on the value of exports during the entire Changes in the direction of trade: Markov chain analysis,
period under consideration. All other importing countries as used in Angles et al (2011), Ganeshkumar et al (2016) and
were pooled into 'Other countries', and is considered for the Vivek et al (2019) was used to analyze the changes in the
analysis along with the major five importing countries. direction of trade. Estimation of a transitional probability
Analysis of growth in export: Compound annual growth matrix P is the major part of Markov chain analysis. The off-
rate (CAGR) was calculated for analyzing the growth in diagonal element Pij of this matrix indicates the probability that
export to different countries over time by fitting exponential the export share of a particular country will shift to another
function for the variables under consideration (Gujarati et al country over time. The diagonal elements indicate the
2012). Following estimation form was used for the probability that the export share of a country will be retained.
calculation: The average export to a particular country was considered to
ln Y = a + bt be a random variable which depends only on its past exports
Where, 'Y' is the time series data of quantity, value or unit to that country and which could be denoted algebraically as:
r
value of coir products export to a particular country for which
growth rate is calculated, 't' is the time variable and 'a' is the
E jt  E
i 1
P  e jt
it  1 ij

intercept. The slope coefficient 'b' measures the relative Where,

th
change in Y for a given absolute change in the value of Ejt = Exports from India during the year t to j country,
th
explanatory variable 't'. Compound annual growth rate can Eit-1 = Exports to i country during the year t-1,
th th
be calculated from the value obtained for 'b' as: Pij =The probability that exports will shift from i country to j
CAGR = [Antilog (b) – 1] x 100 country,
The values of compound growth rates obtained were ejt = The error term which is statistically independent of Eit-1,
also tested for their significance using student't' test. and
Analysis of export instability: Apart from growth, stability r = The number of importing countries.
of exports is an important aspect to look for the risk involved. The transitional probabilities can be arranged in a (c x r)
The instability index as estimated by Raju et al (2014) and matrix, and have the following properties:
Vijayan and Devi (2018): 0 ≤ Pij ≤ 1
n
Instability Index = Standard deviation of natural
logarithm (Yt+1/ Yt)
P
i 1
ij
 1, for all i

Where, Yt is the export quantity/ value/ unit value in the The transitional probability matrix is estimated in the
current year and, Yt+1 is the same in the next year. This index is linear programming (LP) framework by a method referred to
unit free and very robust. A low value of the index refers to low as minimization of Mean Absolute Deviation (MAD). The LP
instability in exports and vice versa. formulation is stated as:
Geo gra phic co n cen tr ati on in exp ort: P rope r Min OP* + Ie
understanding on the spread of export destinations is Subject to XP* + V = Y. GP* = I, P* ≥ 0
imperative to have an idea on the risks involved. If the exports Where, P* is a vector of the probabilities Pij, 0 is a vector
are concentrated in a few countries only, it increases the of zero, I is an appropriately dimensioned vector of country, e
chances of instability and thereby risks in export earnings. is the vector of absolute errors (|U|), y is the vector of exports
Hirschman Index as used in Sarada et al (2006) and to each country, x is a block diagonal matrix of lagged values
Indushree and Kuruvila (2019) were used to measure of y, and v is the vector of errors and G is a grouping matrix to
geographic concentration in the export of coir products. add the row elements of P arranged in P* to unity.
212 M. Anoop, C.N. Anshida Beevi and R. S. Bhawar

RESULTS AND DISCUSSION this observation. Growth in unit value was negative in the first
Growth and instability in export: The quantity and value of period, but a positive growth rate is evident in the second
total coir export from India showed comparatively high period.
growth rate during both the periods under consideration. Highest growth in unit value of exports was for South
Whereas growth rate in unit value was negative during the Korea (7.47%) and was in next position in terms of value of
first period, which then improved to a small positive growth - growth rate in export quantity (22.77%) and export value
though insignificant- during the second period. The high (31.94%) after China. Contradictory to that of growth of coir
negative growth rate in the first period compared to the very export to China, South Korea's growth in export value was
small positive growth in the second period made the growth in found higher than growth in export quantity owing to high
unit value during the overall period negative (-3.06%). This positive growth rate in unit value. This might have been
was also reflected in the low growth rate in the value of export caused by high proportion of value-added products in the
compared to growth in export quantity. Higher proportion of total coir exports to the country. Growth in unit value was
low value coir products in the total coir export might be the found significant increase in the second period compared to
reason for low growth in unit value/ value of export compared that of first period. The growth in export quantity and value of
to growth in quantity of export. Raseena (2018) also exports was higher in the first period compared to that in the
observed high proportion of comparatively low value second period. Netherlands and UK also showed positive
products like coir pith and coir fibre in the recent years growth rate in unit value of exports (2.77% and 1.07%,
(starting from the middle of last decade) in India's coir respectively) in the overall period. Owing to this, as
products export, which was earlier dominated by value added expected, growth in export value was higher than that of
products like handloom mats. growth in export quantity for both these countries. USA and
While looking into the growth and instability in export of other countries showed positive growth rate in export
coir products from India to major export destinations (Table quantity and value, but negative growth in unit value during
2), China emerged as the top destination with highest growth the overall period. While looking into the instability values,
rate in export quantity (85.66%) and value of exports China came with high instability in all three parameters i.e.,
(81.71%) during the entire period (2002-03 to 2018-19). export quantity, value of export and unit value. Instability in all
Though it showed high growth rate in export quantity and these three were high during the first period, but were
value, growth in unit value was found to be negative. significantly low in the second period. Thus, decreasing
Reduction in proportion of value-added products in the export instability over time was for China, which is a favorable
composition and increase in the proportion of low value raw aspect in export. Instability values of export quantity, value
products over time might have caused the negative growth in and unit value were found low for all other countries except
unit value. Thus, the growth in value of exports might be unit value of UK and USA. Both these countries showed
caused by the high growth in quantity of exports. A glance at moderate instability (26.61 and 18.20% respectively).
the results of growth rate analysis at two time periods gives Looking at growth and instability separately may not help
more insights. Growth in quantity and value was very high in to get clear understanding of the entire scenario. Therefore,
the first period, but both decreased in the second period the combinations of these two is need to be checked
compared to their earlier values. Just like that in the overall thoroughly for proper understanding of the phenomenon
period, growth in export quantity was higher than that of value under consideration. Different combinations are possible -
of export during the first period. But this trend got reversed in like, high growth high instability, high growth low instability,
the second period. Results of growth rate analysis of unit low growth high instability and low growth low instability. First
value of exports during the two periods further strengthens two scenarios are not much problematic, but a low growth

Table 1. Growth and instability in total coir export from India

(Per Cent)
Particulars Period I Period II Overall

CAGR Instability Index CAGR Instability Index CAGR Instability Index

Total export
Quantity (tonnes) 17.63*** 0.91 15.62*** 0.80 17.70*** 0.85
*** *** ***
Value (Rs.) 10.13 0.82 15.66 0.65 14.09 0.78
Unit Value (Rs.) -6.38*** 4.99 0.04 5.04 -3.06*** 5.86
***
Significant at 1 per cent level
 Coir Products Export from India 213

high instability situation is dangerous. Similarly, combination concentration was not much high at any time, and it revolved
of low growth and low instability may lead to stagnation, and around 40 per cent (Table 3). The index value of geographic
hence not favorable. Analysis of coir export data showed concentration of export quantity for the second period
situation of low growth along with high / moderate instability in (43.08%) was significantly higher than that in the first period
unit value of export for countries like China, UK and USA.
Making it further worse, apart from being low, growth in unit Table 3. Geographic concentration of Indian coir products
values of China and USA were negative also. This export (Hirschman Index)
Year Quantity (%) Value (%)
necessitates immediate attention as these two countries are
leading international markets for export of Indian coir 2003-04 34.85 40.86
products. A decreasing and unstable unit value realization 2006-07 31.58 40.20
from export to these countries will certainly hamper the 2009-10 35.80 35.70
export value growth of Indian coir products. Efforts are 2012-13 40.40 33.32
needed to improve the proportion of more value-added 2015-16 43.06 38.15
products in the total exports. Proper study on demand
2018-19 41.65 36.89
scenario of specifications of value-added products in the
2003-04 to 2010-11 (Avg.) 33.67 38.65
major export destinations will be helpful to get a stable market
2011-12 to 2018-19 (Avg.) 43.08 36.74
by meeting consumer needs in those markets.
2003-04 to 2018-19 (Avg.) 38.37 37.69
Geographic concentration of export: Geographic

Table 2. Growth and instability in export of coir products to major importing countries
Particulars Period I Period II Overall

CAGR Instability index CAGR instability index CAGR Instability index

USA
Quantity (tonnes) 8.70*** 1.22 14.28*** 2.06 11.28*** 1.67
* *** ***
Value (Rs.) 4.03 1.48 16.02 1.06 9.01 1.26
*** ***
Unit value (Rs.) -4.30 10.17 1.51 22.56 -2.04 18.20
China
Quantity (tonnes) 247.14*** 51.94 20.17*** 1.67 85.66*** 34.50
*** ***
Value (Rs.) 200.00 49.37 22.19 2.15 81.71*** 33.14
Unit value (Rs.) -13.58 62.11 1.68 8.98 -2.13 41.19
Netherlands
Quantity (tonnes) 12.57*** 1.62 12.78*** 0.51 11.85*** 1.14
*** *** ***
Value (Rs.) 11.58 1.53 18.36 0.96 14.95 1.22
Unit value (Rs.) -0.87 5.05 4.95*** 5.19 2.77*** 5.06
UK
Quantity (tonnes) 3.66** 1.61 5.15* 1.84 5.72*** 2.20
*** ***
Value (Rs.) 2.83 1.06 5.53 1.00 6.85*** 1.41
*
Unit Value (Rs.) -0.81 15.48 0.36 35.60 1.07 26.61
South Korea
Quantity (tonnes) 43.60*** 5.93 10.20** 2.40 22.77*** 4.78
*** *** ***
Value (Rs.) 47.72 6.83 22.31 2.46 31.94 5.49
Unit value (Rs.) 2.87 5.68 10.98*** 4.38 7.47*** 5.26
Other countries
Quantity (tonnes) 11.48*** 0.50 14.51*** 0.89 12.77*** 0.68
*** *** ***
Value (Rs.) 9.54 0.76 11.29 0.87 10.92 0.84
** *** ***
Unit value (Rs.) -1.75 6.01 -2.81 6.35 -1.64 6.09
***, ** *
and corresponds to Significant at 1 per cent, 5 per cent and 10 per cent levels, respectively
214 M. Anoop, C.N. Anshida Beevi and R. S. Bhawar

(33.67%). But for the value of exports, geographic During 2003-04 USA was the single largest export
concentration in the second period (36.74%) was lower than destination for India which accounted for 26.30 per cent and
that in the first period (38.65%). Though it is a good sign that 36.54 per cent of total coir products export quantity and
geographic concentration of export value decreased, it is export value, respectively (Table 4). Throughout the years
important to ensure that proportion of low value products in the share of export value was higher than share of export
the export composition of major export destinations need to quantity for USA. This indicates the probability to have high
be reduced and should be replaced with high value products. proportion of high value coir products in the total coir exports
The comparatively higher value of geographic concentration to USA. In China throughout the years the share of export
of export quantity compared to that of value of exports might value is less than that of export quantity, indicating chances
be pointing to a higher proportion of low value products being of high proportion of low value products in the total coir
exported to the major export destinations like China. exports to China. The share of export quantity or value is not
Over time, geographic concentration of export value first highly concentrated in a few countries (Though China and
increased and then showed gradual declining trend till 2010- USA enjoy slightly higher share). The better distribution
11. Then it showed a slight stagnant phase and later started among a number of countries thus helps to reduce risk and to
increasing until 2017-18. In the most recent year (2018-19), it provide stability to coir products export from India.
decreased further. For the export quantity, geographic Direction of trade: Transitional probability matrix (Table 5)
concentration slightly increased and then continuously gives a broad idea on the changes in the direction of trade of
decreased till 2008-09. After that it continuously and coir products export from India. China was the most stable
significantly increased till 2016-17, and then started importing country as reflected by highest probability of
decreasing. The geographic concentration of both quantity retention (0.886). This was strengthened by probability of
and value of export started decreasing in the most recent gaining shares from other importing countries like South
years. This will improve the geographic spread of export and Korea (1.0) and Netherlands (0.039). China showed only
hence the stability of export. small probability of losing its market share to countries like

Table 4. India's coir products export to major importing countries

Country 2003-04 2008-09 2013-14 2018-19

Quantity Value Quantity Value Quantity Value Quantity Value

USA 26893.82 14889.48 37819.25 19660.18 55091.03 30026.05 122220.8 60134.19

(26.30) (36.54) (18.92) (30.72) (10.26) (20.34) (12.68) (22.04)
China 113.60 22.18 18137.24 2199.74 192110.6 36050.66 354267.60 71505.98
(0.11) (0.05) (9.07) (3.44) (35.77) (24.42) (36.75) (26.21)
Netherlands 17856.19 3204.93 33372.84 4814.41 53786.54 10870.04 96981.75 24841.02
(17.46) (7.86) (16.69) (7.52) (10.02) (7.36) (10.06) (9.11)
UK 8623.92 4524.6 10819.41 5235.45 11987.01 8600.98 22192.45 11743.33
(8.43) (11.10) (5.41) (8.18) (2.23) (5.82) (2.30) (4.30)
South Korea 1598.39 126.41 18590.94 1484.12 67042.97 7020.54 75186.43 14251.99
(1.56) (0.31) (9.30) (2.32) (12.48) (4.76) (7.80) (5.22)
Other countries 47167.56 17982.06 81185.22 30603.51 157022.20 55035.54 293197.50 90328.08
(46.13) (44.13) (40.61) (47.82) (29.24) (37.29) (30.41) (33.11)
Total export 102253.50 40749.66 199924.9 63997.43 537040.40 147603.80 964046.40 272804.6
(100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)
Note: Quantity in tonnes, Value in Rs. Lakhs. Digits in parentheses indicate per cent to total
Data source: http.coirboard.gov.in and www.indiastat.com

Table 5. Transitional probability matrix of coir products export from India (2003-04 to 2018-19)
Country USA China Netherlands UK South Korea Other countries

USA 0.7034 0.0000 0.0000 0.0924 0.0000 0.2041

China 0.0000 0.8865 0.0094 0.0000 0.1040 0.0000
Netherlands 0.0000 0.0392 0.7815 0.0000 0.1793 0.0000
UK 0.4550 0.0000 0.0000 0.5451 0.0000 0.0000
South Korea 0.0000 1.0000 0.0000 0.0000 0.0000 0.0000
Other countries 0.0968 0.0000 0.0364 0.0049 0.0137 0.8482
 Coir Products Export from India 215

South Korea (0.104) and Netherlands (0.009). China was concern because South Korea was the topper in growth rate
followed by Netherlands (0.782) and USA (0.703) as stable of unit value of exports – which might have emerged from
importers with high probability of retention of their market increasing proportion of high value products in the total coir
shares. Netherlands showed probability to lose the market export. Stability in export to such important markets is
mainly to South Korea (0.179) and China (0.039). USA lost crucial for growth and development of coir industry in a
its market mainly to other countries (0.204) and then to UK sustainable manner. Interventions are needed to maintain
(0.092). UK showed medium probability of retention (0.545). and improve demand for high value products in various
and was having only low probability of gaining market shares export destinations, and also to further decrease
from other countries viz. USA (0.092) and other countries geographic concentration of export both in terms of value
(0.0049). It showed probability to lose a good share of its and quantity.
imports to USA (0.455). South Korea was the most unstable
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Received 17 August, 2020; Accepted 05 January, 2021