Saffron Production cost in Afghanistan The comparative advantage of saffron investment in Afghanistan

Type Cost /KG Approved five year saffron development program

seed Approved Saffron Sector National Export Strategy

Farmer practices Low production cost compared with other saffron
Planting
US$ 488 producing countries.
Harvesting
International community interest and support
Processing

Bulk packaging
The current rate of return on investment in
saffron production is about 116 % . WTO membership
Ready market ( saffron price per kg increased from 200
The Comparative
Saffron financial rate of Investment
US$ to 1200US $ during last 16 years)
Availability of skilled/non-skilled labor
Advantage of the
Producers
Production
Afghan Exporters Foreign Companies Foreign Companies

Buying
Import
Retail sell
Import
Availability of sufficient supply of Corm (seed)
Most parts of Afghanistan is Suitable for saffron Saffron Sector in
Harvesting
cultivation.

Afghanistan
Processing Processing
Processing
Irrigation
sorting
sorting Country-wide investment area for saffron production in
Harvesting sorting
Bulk Packaging
Packaging
Afghanistan estimated more than 20,000 hectares.
Processing
Export
Packaging After cultivation of this area, total production will be
Sell price/kg Sell price/kg US$ whole Sell price/kg Retail Selling price
Up to US$ 11000
about 100,000 to 150,000 kg (50 % of world saffron
US$ 1050 US$ 3000
1200
The rate of return on The rate of return on
production ) , the value estimated USD 200,000,000 to
300,000,000.
The rate of return on The rate of return on investment for whole sale investment for whole sale
investment is about 116 % investment is about 15 % traders/foreign companies is traders/foreign companies is
estimated at 150 %). estimated at 267 %).

Suitable soil and climate ( possible produce 10kg/hac

Product Quality: best quality saffron)
Saffron quality test facilities.
Quality of saffron in Afghanistan, because of suitable
climate and soil, is higher than the recognized ISO 3632 Saffron processing centers
standard (picorcrocine, (safranal, crocines). Based on
Electricity
laboratory tests of Afghanistan saffron, it has the best
quality and has been selected as the best saffron of the Active private companies
world for 3 years in a row among 300 types of saffron from
Farmer interest
different countries and it is the best evidence of this claim.
Farmers association

4 5
 Baseline information Saffron production development in Afghanistan Investment area according to saffron value chain
map in Afghanistan :
Saffron is a very high-value spice crop with particular 1. Production:
potential for profitable production in Afghanistan.
Currently, total production of saffron is 10.6 MT in
Total economic value of saffron is about USD 8 Billion Afghanistan constitutes 2 % of the world production
globally. but with further investments there is the possibility of
increasing it up to 150 MT or 50 % of the world saffron
The Saffron market has been growing at an average production.
rate of %30 per annum in recent years.
Currently, the production cost of 1kg saffron is about
Currently, there are around 30 countries that produce US $ 800 in Iran, but in Afghanistan it’s about 488 US $.
saffron around the world and after Iran and India ,
Afghanistan has the third position among them. According to above estimates, the total return is
estimated about 116 %.
Total area under saffron cultivation in Afghanistan is Total Expenses (one hac)
Duration of 5 Years
5200 hectares which shows %36 annual growth rate in
the past five years. No. Description Amount
AFN
Rate Amount
USD
۱ Cost Estimation for 1Hectare Saffron Planting: 1141950 66 17302.27273
Currently, saffron from Afghanistan is being exported ۲ Annual Dynamic Cost: 402500 66 6098.484848
to India, France, Spain, Unites Arab Emirate, China, ۳ Saffron Processing Cost Produced from 1 Hectare:
Total Amount
551032 66 8348.969697
31749.72727
Saudi Aribia, USA, Sweden, Germany, Italy, Holland
,Tajikistan, Canada and Australia.
Total return from one hectare after5 years will be:

Returned Amount of Money

Value Chain Mapping In Duration of 5 Years
No. Description Quantity Unit Unit Price No of Amount
USD Year USD
1 Saffron Production 30 kg 1200 5 36000
2 Saffron Seed Production 16000 kg 3 5 48000
Total Amount 84000

Total Benefit:
Return amount – Total Expenses = 84000 – 31749 = 52251 USD

2. Saffron processing:
Currently, due to the limited access to processing and
packaging facilities, saffron producers sell their products in
bulk with low prices after primary processing.
a. Producers:
Production Flower harvesting Stigma separation
drying bulk packaging selling US$ 1050-950 /kg . (The
rate of return on investment is about 116 %)
b. Afghan saffron companies:
After secondary processing , and sales to foreign companies
US$ 1200/kg (The rate of return on investment
is 15 %)
c. Foreign Buyers/companies:
After final processing, sorting and packaging and whole sale
at US$ 3000 (The rate of return on investment for whole sale
traders/foreign companies is estimated at 150 %).
Retail sales up to 11000$/kg (The rate of return on
investment for whole sale traders/foreign companies is
estimated at 267 %).
Estimated Production cost /kg US$ 488
Estimated Processing cost/kg = 150 USD
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