Exporting Candle...........
HS Code : 34060010
Despite tough competition from China, India’s candle exports have been rising at a fast pace. The credit for this, to an extent, goes to high anti-dumping duties that have been imposed on China-made candles in US and EU
Don’t be surprised if the next time you walk into a big branded home décor store in New York, pick up a designer candle placed on the shelf and find that it sports a ‘Made in India’ tag. While Chinese candles continue to flood markets across the western world, a good number of scented and decorative candles adorning homes and offices in US, UK and Australia are now increasingly being sourced from India.
In FY2016, India exported $27.80 million worth of candles to US – a market where candles are used in 7 out of 10 households (as per the National Candle Association, USA).
Well, this was a 31.34% y-o-y jump. In the same year, India exported candles worth $9.96 and $2.89 million to UK and Australia reporting y-o-y increases of 22.81% and 47.44%, respectively. Ireland, Sweden and Italy were some of the other big markets where India’s exports of candles witnessed impressive growth in FY2016 over the previous year.
Unfortunately, despite such impressive growth numbers, candle exporters from India are still struggling to counter competition from Chinese exporters who continue to rule the roost as far as candle exports are concerned. Candle (HS Code: 340600) exports from China stood at $594.29 million in CY2016, surpassing the likes of Poland and US, while India’s exports during the same period stood at $50.53 million.
What gives Chinese candles an advantage over India-made candles? “Low pricing and large volumes,” rue most exporters. China-made candles sell at very low prices that Indian manufacturers are unable to match. “While India supplies tealights for say Rs.2, China, on the other hand, ends up selling it for only 90 paise! Chinese candles are machine-made, while the ones from India are even today mostly the hand-poured varieties. So, competing when the price differential is so high gets extremely challenging,"
Q. Then how India can succeed in the International Market of Candle?
A. Actually Chinise candle prove to be very costly for importer - HOW ?
"Anti-Dumping duty on Chinese candles in us has helped Indian exports"
Most foreign countries are imposing anti dumping duties on chinese products which results in costly import for buyer. This is not the case with indian imports
Q. What is Anti Dumping Duty ?
A. Suppose manufacturing cost of a candle in China is 1 INR and when they supply in a foreign market at 0.50 INR to break the market of others and when gov sees a threat to domestic market they impose anti-dumping duty to stop negative dumping from China.
Q. Why our Prime Minister travel to other countries?
A. They mainly travel for free trade agreement, they try their best that Indian products face less or no import duty to importers, so by this way automatically Indian exports would boost.
Indian hollow candles are highly demanded in international market
The primary raw material used for making candles – paraffin wax – is not only expensive, but is also prone to severe price fluctuations. As this variety of wax is made from petroleum, its prices see an increase whenever there is a hike in petroleum prices. Adding to that are the challenges of managing and sourcing labour as well as maintaining consistency, since candle-making is a labour-intensive industry.
In fact, if one looks at data offered by National Candle Association (NCA), a trade association representing US candle manufacturers and their suppliers, it reveals an interesting habit of US consumers. Most US consumers start using candles within a week of buying them. This makes its demand a continuous one unlike in India where most of the times the candles are used only during festivals and on special occasions. Their research also indicates that 42% users in US light up candles in the living room, 18% in the kitchen and 13% in bedrooms. This makes fragrance and colour two crucial influencers among US buyers.
So, when it comes to exports its obvious why manufacturers in India lean towards decorative scented candles. Most of the exporters we spoke to feel there is a good demand for decorative vegetable wax candles abroad. On the other hand, in the Indian market, they say, it is the cheaper, non-scented, paraffin wax candles that sell more. “We get export orders for vegetable wax candles since they are more eco-friendly and non-toxic. The designer candles are also in high demand amongst overseas clients. In India, however, it is the paraffin wax candles that are bestsellers with their low entry price points,”
Incidentally, there is an assortment of waxes which are available when it comes to the making of candles. Paraffin wax, for instance, is by far the most commonly used – however its use has been considered hazardous and toxic owing to the soot emanated from it. “The wax in paraffin candles is filled with petrochemicals – it is like breathing exhaust from a car! It is not at all safe to inhale. Vegetable-based waxes are expensive but well worth the investment.”
Besides paraffin, there is soy wax, made from soya beans is known to burn cleaner with less soot being released. Most soy waxes are made from 100% soya bean oil, while some may also include other vegetable oils. Then there is gel wax, which is an amalgam of resin and mineral oil. It is often used to replicate water or liquids. The texture is clear and rubbery and gel wax boasts of staying alight for twice as long as paraffin, without the hazardous fumes associated with burning paraffin wax candles.
Another popular but slightly expensive variety is beeswax, a traditionally famous candle-making wax which is produced by bees during the honey-making process. This is more expensive owing to its natural and chemical free characteristics. Yet another environment-friendly but expensive wax is palm wax that is produced from hydrogenated palm oil. It is a firm wax that is perfect for pillar candles and votives. At times, it is also mixed with soy wax to strengthen its form further. While both are known for their environment-friendly components, their high cost adds to the overall pricing of a candle.
If one talks about bestsellers that hog the limelight, candle varieties such as tealights, pillar candles, container candles and votives find a robust demand abroad. One variety found in many homes outside India (with a growing domestic demand during festivals) is tealights, which are essentially candles enclosed in a metal or plastic cup, typically small in size, and burn for approximately 3-5 hours. Another type of candle which is a favoured option internationally are votive candles – these are small cylindrical candles that melt into oil once lit. Incidentally, both tealights and votives are low-cost options for home décor and an easy way to brighten up one’s home. Container candles, on the other hand, come in non-flammable containers full of wax and wick. Another category is the pillar candle, which is a sturdy candle and can either be short or tall or for that matter square or round – they are thick and wide which makes them burn for a longer duration, and are also used as decorative pieces. In fact, the width of a pillar candle is its defining feature as it can be cast in different shapes. And this is the variety of candle Indian exporters are focussing on as of now.
The versatility of candles can hardly be questioned, especially with such a plethora of options that can notch up the aesthetics and appeal of any space, manifold. According to ‘Global Candle Market Research Report 2017’, the candle manufacturing industry is expected to continue to draw benefits from a buoyant demand, both domestically and abroad. This will be triggered by an increased spending power and an inclination towards candles as a source of fragrant and coloured add-ons to homes.
According to the same report, there is also expected to be an increasing inclination towards candles which are environment-friendly and stay clear of any health disadvantages. Interestingly, in India, candle manufacturers are already customising their offerings in step with this all significant and ‘healthy inhaling’ trend. It has a line-up of products that include pure vegetable wax candles and will soon be coming up with ‘ghee’ candles for the domestic market. The brand also uses indigenous ingredients such as lemongrass and sandalwood which are mixed with essential oils for a unique aroma.
Well, it’s time to make the most of this lucrative opportunity.