A multiple regression and instability analysis of Indian dry chilli exports

Abstract:

India stands as the premier global producer, consumer and exporter of spices, with dry chilli being a strategically significant crop that accounts for thirty-five to forty percent of worldwide production. This comprehensive study meticulously evaluates the statistical growth, market instability and macroeconomic factors directly influencing India's dry chilli exports over a twenty-year period from 2004-05 to 2023-24. Employing analytical tools such as compound annual growth rates, the Cuddy-Della Valle instability index and multiple linear regression, the analysis conclusively reveals that overall export quantity and value experienced highly significant growth rates of 6.92 per cent and 12.38 per cent, respectively. Although the pace of growth markedly decelerated during the second decade (2014-2024), the export value instability significantly decreased, thereby securing a more stable revenue stream for the nation. Market-specific trends showcase explosive, stabilized growth in China, heavily contrasted by volume contractions or plateaus within traditional markets like Sri Lanka, Thailand and Malaysia, albeit with improved overall market stability. Finally, the robust regression model practically demonstrates that total global demand alongside international pricing positively drive export performance, while rising Indian export prices and increased domestic production negatively impact total export volumes primarily due to international price sensitivity and domestic consumption.