A Project Repor1

7/27/2019 A Project Repor1

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Challenges and Constraints of Marketing and Export of Indian Spices in

India

Rohatash. K. Bhardwaj

B. K. Sikka

Ashutosh Singh

M. L. Sharma

N. K. Singh

[email protected],

[email protected]

[email protected]

[email protected]

[email protected]

College of Agribusiness Management, Pantnagar

Rahul Arya

[email protected]

Symbiosis Institute of Distance Learning, Pune

1. Introduction

Spices are the currency of developing countries. India, Egypt, China, Indonesia, Malaysia, Mexico,

Turkey and

Brazil are the primary producers of spices. Since spices are always in demand in the industrialized

world, the

export of these basic agricultural commodities by developing countries can be relied upon to earnvaluable

foreign exchange. The major importers are the US, Europe, Japan, East Asian and Middle East

countries. India,

blessed with vivid agro-climatic zones, exports spices to 120 countries. Her biggest trading partners

are the US,

Europe and Japan. India has the status of mere a commodity exporter in these markets, except for

spice oils and


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oleoresins. The processors/packers in these countries and a few multinational companies buy Indian

products

and sell them under their brands at a price 4 to 5 times more than they cost. Indian brands have yet

to find

markets beyond middle-class and ethnic populations. Reduction in exportable surplus on account of

increasing

domestic demand, dependence on nature, pest and disease problems, low technology infrastructure

and arbitrary

imposition of standards and stringent food laws by importing countries are the major challenge with

the spice

industry in India. Quality improvement, value addition and compliance with stipulations under WTO

agreements are required for better market access. It is essential to chanellize exports, to use

effective processing

and packaging techniques, to develop recognized international brand and to focus on niche markets.

2. Indian Spices

The history and culture of Indian spices is probably as old as human civilization itself. The Vedas, the

Bible and

the Quran are all replete with references - direct or indirect - to Indian spices. The earliest literaryrecord in India

on spices is the Rig Veda (around 6000 BC), and the other three Vedas - Yajur, Sama and Atharva.

Spices

constitute an important group of agricultural commodities, which are virtually indispensable in the

culinary art.

They can be primarily defined as farm products used in various forms viz; fresh, ripe, dried, broken,

powdered

etc. which contributes aroma, taste, flavour, colour and pungency to food, rather than a lone food

seasoning

factor. Spices may be bark, buds, flowers, fruits, leaves, rhizomes, roots, seeds, stigmas and styles or

the entire

plant tops. They are well known as appetizers or preservatives and many of them have rich

medicinal properties

and are used in pharmaceutical, perfumery, cosmetic products, religious rituals etc.


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The Spices Board, India is the apex body for the export promotion of Indian spices. Established in

1987, the

Board is the catalyst of these dramatic transitions. The Board has been with the Indian Spice industry

every step

of the way. It plays a far-reaching and influential role as a developmental, regulatory and

promotional agency

for Indian Spices. Within the past one decade the international trade in spices has grown by leaps

and bounds.

An estimated 500,000 tonnes of spices and herbs valued at 1500 million US dollars are now

imported globally

every year. An impressive 46% of this supply comes from India. India's exports of spice extracts have

shown

spectacular growth attaining over 50 percent of the global market within a short span of few years.

Spices

exports from India have registered substantial growth during the last one-decade. It has increased

from 109636

tonnes valued US$ 135 million in 1990-91 to 235611 tonnes valued US$ 472 million in 1999-2000.

During the

year 2002-03, the spices export quantity has touched an all-time high of 264107 tonnes. However,during 2003-

04 the export has declined to 246566 MT valued US $ 415 million. The decline was mainly due to

decline in International Conference on Technology and Business Management March 28-30, 2011

740

export of Mint Products and also because of low volume of pepper exports coupled with low unit

value

realization. Still India commands a formidable position in the World Spice Trade with 46% share inVolume and

27% in Value.

3. Problem Statement

The traditional marketing of spices from the state is much of the domestic nature. There is

prevalence of a large

number of intermediaries. The export of spices like chillies, ginger and turmeric is negligible. AEDU

wants to


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generate a database for the use of the growers, entrepreneurs and exporters of these spices from

Uttaranchal. It

wants to get an insight of the problem faced by the growers and help farmers by providing

alternatives as to

what to produce for better price realization. AEDU wants to encourage more private players for

exports of these

spices from Uttaranchal and in setting up spice processing units by finding alternatives for value

addition and

processing. AEDU also wants to use this study for further policymaking regarding Spice Exports. A

study of the

local markets might reveal that what the villagers purchase can as well be produced locally. The

opportunities

must be fully explored. At the same time, it must be remembered that it is neither feasible nor

desirable to

produce all goods in all places. Marketing problems are more frequently faced by growers and

exporters mainly

due to failure in establishing market linkages rather than lack of market opportunities. The present

study has

been undertaken with following specific objective:

4. Research Methodology

Descriptive research has been undertaken to study the present status of spices production and

marketing coupled

with analysis of backward and forward linkages in spices trade and to explore the possible channelsof spices

marketing and exporting that could replace the existing channels and prove to be more successful.

Both primary

and secondary data was required for fulfilling the objectives of the study. Secondary data related to

production

was taken from District Horticulture Office, APEDA, government departments, and data related to

arrival and


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prices has been taken from various mandis in Uttarakhand and Delhi. Books, journals, magazines and

internet

are also used as a data source. Primary data and information is collected through personal

interviews of farmers,

Traders, government officials, Hoteliers, transporters, Restaurant owners and Primary processors.

Three districts

of Uttarakhand, namely Haldwani, Ramnagar and Dehradun were studied as these districts have to

favorable

agro-climatic conditions for spice cultivation and are in close proximity to the markets. In addition to

this,

mandis and processing units in Uattarakhand and Delhi and various government departments are

also studied.

Spice growers of Haldwani district, food processors of Kumaun region, hoteliers and restaurant

owners in

Haldwani and Nainital, and functionaries of Dehradun, Haldwani and Azadpur mandi constituted the

universe of

the study.

Judgemental and Snowball sampling technique was applied for selecting sample form universe. The

sample

size was decided based on availability and constraints.

No. of exporters surveyed : 10

No. of commission agents surveyed : 10

No. of growers surveyed : 20

Farmers = 16 Traders = 5 Government officials (DHO) = 3

Hoteliers = 14 Restaurant owners = 8 Transporters = 4 Processors = 3

Structured questionnaire was used as a research tool for conducting the interviews and interactions

with spice

growers, processors, exporters, transporters and Govt. officials in Uttarakhand. Based on the

Information

collected with the help of questionnaire having both open and closed ended questions by interacting

with

farmers, exporters and other functionaries involved in marketing of spices in Uttarakhand. The data

collected


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were first tabulated then analyzed and inferences drawn and interpreted on the basis of simple

statistical tools

(average, percentage, and graphical presentation).

5. Results and Discussions

Market Overview

The current estimate of world imports is 5, 25,000 tonnes valued at US $ 1,500 million, with an

annual growth

rate of 4 per cent. This is against a world production of 8.5 million tonnes valued at US $ 25 billion.

The

difference between world production and import is the domestic consumption of producing

countries. According

to UNCTAD-International Trade Centre estimates, in terms of volume, pepper contributes 34% of

total global

spices trade followed by chillies 22%, seed spices 17%, tree spices 14%, turmeric 5%, ginger 4%,

cardamom

3% and vanilla 1%. As far as the product mix is concerned, the bulk of spices are exported in whole

or

ungrounded form, while only 15-20 per cent of spices are sold in ground form, as mixtures ofground spices

and as essential oils and oleoresins.International Conference on Technology and Business

Management March 28-30, 2011

741

Average Prices in the International Market

Turmeric

The table 1 reflects the average situation of demand and prices in international market for varieties

of turmeric

from India over the period 2004-05 in various importing markets. Indian varieties fetch a good price

at U.S.A.

and Germany. The turmeric powder from India was sold to Kuwait at a good price during September.

Indian

varieties are traded to Germany and Holland mainly during June - July.

Table 1 Average Demand in International Market for Turmeric


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(In US Dollars per Metric Ton C&F unless otherwise Indicated)

Countries India / Madras fing India / Allepy fing India / Raja Powder

Germany 760 spt/675 june-july no quotation no quotations 790 spot/700 june-july

Holland 625-650 june-july no quotations no quotations 645-935 june-july

Japan 650 spot 1000 spot 790 shipment no quotations

U.K. 600 june-july no quotations no quotations no quotations

U.S.A. 1215 spot 1545 spot ,1500 spot no quotations no quotations

Bahrain 660-690 shipment no quotations no quotations 550 shipment

Emirates no quotations no quotations no quotations no quotations

S. Arabia 440 shipment no quotations no quotations no quotations

Kuwait: no quotations no quotations no quotations 900 September

Source The Market News Service for Spices, The International Trade Centre

Ginger

The tables 2 and table 3 reflects the average demand of non- Indian ginger varieties by various

importing

markets as compared to Indian ginger variety over the period 2004-05. The Indian variety for ginger,

the India

Cochin earned a good price in the international market as compared to other marketed varieties viz.,

Nigeria

split, China whole 1 or China sliced. The Indian variety fetched a good price at U.S.A. and Bahrain.

The U.K.

and Germany traded for the Indian variety in June-July.

Table 2 Average Demand in International Market for Ginger Varieties


China Whole 1 China Sliced

Germany 1175 spot no quotations

Holland 1200 spot/june 950 spot/june

Hong Kong 860 FOB june no quotations

Japan 1000 shipment 1200 shipment


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U.K. 900 june-july 700 june-july

U.S.A. 1080 spot 990 spot

S. Arabia 725 june no quotations

Emirates 600 free average quality, bleached no quotations


Table 3 Average Demand in International Market for Ginger Varieties


India Cochin Nigeria Split

Germany 1050 spot/850 june-july 890 spot/765 june-july

Holland 1200 spot 850 june-july

Japan 1100 spot/950 shipment no quotations

U.K. 1000 june-july 1000 spot/900 june-july

U.S.A. 1345 spot 1300 spot

Bahrain 1230 grade 1 nc/1150 free average quality, new crop

Emirates 850 unbleached/900 special, may no quotations

S. Arabia 900 unbleached, may no quotations

Source The Market News Service for Spices, The International Trade CentreInternational Conference

on Technology and Business Management March 28-30, 2011

742

Ginger was also traded in international market as essential oil at average US$ 80 /kg MEP (table 4).

Table 4 Average Demand in International Market for Essential Oils

(US$/kg inMEP cif, unless otherwise stated)

Aniseed China 7.10 spot/6.20 shipment

Bay oil West Indies 64.00 spot

Caraway Egypt 90.00 shipment FOB

Cardamom Guatemala 275 spot/265 shipment

Cassia China 11.00 shipment

Cinnamon leaf Sri Lanka 7.55 spot/6.10 shipment


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Cinnamon bark Sri Lanka 250 spot

Clove leaf Madagascar spot 6.50/6.20 shipment

Indonesia spot 6.00/shipment

Coriander Russia 20.00 spot

Cumin: Iran 71.00 spot/64.00 shipment

Egypt 71.00 spot/64.00 shipment

Garlic: Mexico 28.00 spot

China 28.00 spot/23.00 shipment

Ginger China 23.00 spot/21.00 shipment

India 80.00 shipment

Nutmeg Indonesia 39.50 spot/38.00 shipment

Grenada no quotations

Peppermint China 7.00 spot/6.20 shipment

Brazil 3.80 spot

India 6.75 spot/6.50

Pimento leaf Jamaica 58.00 spot

Spearmint China 60% 12.20 spot/11.00 shipment, 80% 14.5 shipment


Chillies

The India S4, India sannam, India long varieties have shown good demand in international market

over the

period 2004-05. The chillies were exported as stem less, with stem, dandicuts or in powder form.

Table 5 Average Demand in International Market for Chillies


France India S4 stem less 1000, with stem 950, powder 850,

Malawi bird's eye 3500, all june, Zimbabwe birds eye no quotations

Germany India S4 stem less 1175 june, powder 925 june

Holland India S4 stem less 850 june-july, with stem 750 june-july, powder depending on


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quality:500-1000 june-july, dundicuts no quotations

Malawi bird's eye no quotations

Zimbabwe bird's eye no quotations

Japan China tien. S. 2000

India sannam 1000 shipment

U.K. India S4 stem less 1000, with stem 900, powder 950

Malawi bird's eye 3800; all may-june,

Zimbabwe bird's eye no quotations

U.S.A. India S4 stem less 1255 spot/1325 october

South Africa/fukien 3970 spot

Chinese sml 1655 spotInternational Conference on Technology and Business Management March

28-30, 2011

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Bahrain India long with stem 815, dundicut 1210, powder 1020-1240 all june

Kuwait Pakistan whole 1500

India powder 1000 june

Emirates India long with stem 840 june, dundicut, long stem less, powder no quotations

Pakistan dundicut 1450 june

S. Arabia India long with stem 1150, dundicut stem less 1200 june

Source: The market news service for spices, The International Trade Centre

The India S4 variety has good demand in international market both with and without stem and in

powder

form. Malawi birds eye and Zimbabwe birds eye poses good competition to Indian varieties. India

S4 variety

fetched a price of US$ 1175 at Germany during June 2004 (table 5). Powered form of chillies earned

good

price in Kuwait.

Indias Position in Spice Production and Exports


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India is the largest producer, consumer and exporter of spices, with a 46 per cent share by volume

and 23 per

cent share by value, in the world market. The Indian spice export basket consists of around 50 spices

in whole

form and more than 80 products in value added form. However, a few spices and value added forms

constitute a

major segment of the countrys total export earnings. India accounts for 25-30 per cent of worlds

pepper

production, 35 per cent of ginger and about 90 per cent of turmeric production. Among the Indian

Federal states,

Kerala tops in pepper (96 per cent), Cardamom (53 per cent), Ginger (25 per cent) production in the

country.

Andhra Pradesh leads in Chilly and Turmeric production in the country with 49 per cent and 57 per

cent. In

coriander, cumin and fenugreek production in the country, Rajasthan emerges as the largest

producer with 63

per cent, 56 per cent and 87 per cent of domestic production.Within the duration of 1997-98 to

2001-02, India's

spice exports increased marginally by 1.20 per cent in terms of volume but export earnings in rupeeterms

registered an impressive 45.72 per cent growth reflecting marked value addition. In US $, the growth

in earnings

was 13.40 percent (table 6).

Table 6 India's Exports of Spices (1997-98 to 2000-01) (Rs in Crores)

Item 1997-98 1998-99 1999-2000 2000-01

Pepper 496.35 634.91 884.88 326.33

Cardamom (Small) 12.66 25.25 32.01 56.55

Cardamom (Large) 12.64 12.69 16.96 27.69

Chilly 15.89 25.28 250.65 195.23

Ginger 72.62 40.58 30.60 22.95

Turmeric 83.06 122.91 121.68 91.06

Coriander 64.34 45.47 34.96 27.42


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Cumin 81.35 59.80 34.28 91.06

Celery 7.99 95.72 10.59 17.00

Fennel 35.81 15.41 14.41 17.78

Fenugreek 9.87 19.20 20.95 17.88

Other seed (1) 9.34 8.22 10.26 8.96

Garlic 7.97 5.97 13.26 10.40

Other Spices (2) 55.66 76.34 88.50 144.90

Curry Powder 29.72 35.97 34.60 39.97

Mint Oil 96.93 12.37 103.10 126.45

Spice Oil and Oleoresins 23.15 300.86 323.30 364.05

Grand Total 1115.35 1426.95 2025.08 1612.07

Value in US$ million 394.45 428.77 468.12 352.13

Source www.indiaonestop.comInternational Conference on Technology and Business Management

March 28-30, 2011

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However, the fortunes of individual items vary from year to year because of the changing global

supply and

demand position and other external factors. As obvious from table 6 India's export of chilly

increased from Rs.

15.89 crores to Rs. 195.23 crores, within the duration of 1997-98 to 2001-02 though the volume of

export grew

by only around 20% (table 7). The export of turmeric fluctuated within the period. The ginger

exported from

India gradually decreased from 28,268 tonnes in 1997-98 to 6,580 in 2000-01 (table 7).

Table 7 Volume wise Indias Export of Spices (1997-98 to 2000-01) (In Tonnes)

Spices 1997-98 1998-99 1999-2000 2000-01

Pepper 35,907 35,121 42,806 19,250

Cardamom (Small) 370 476 646 1,100

Cardamom (Large) 1,648 1,288 1,211 1,645


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Chilly 51,779 68,019 64,776 61,000

Ginger 28,268 8,683 8,773 6,580

Turmeric 28,875 37,298 35,556 34,500

Coriander 23,734 21,044 13,973 11,700

Cumin 16,281 10,595 6,145 13,800

Celery 3,317 4,038 3,497 5,250

Fennel 12,368 5,296 2,953 4,000

Fenugreek 6,006 10,221 10,901 9,050

Other seeds (1) 4,056 2,178 2,349 2,425

Garlic 3,975 3,978 8,542 11,000

Other Spices (2) 14,918 20,384 22,012 35,000

Curry Powder 5,132 5,213 5,814 6,200

Mint Oil 3,018 4,279 2,820 3,875

Spice Oil & Oleoresins 2,419 2,752 3,368 3,625

Grand Total 242,071 240,863 236,142 230,000

Source www.indiaonestop.com

In 2001-02, India's export of chillies was around Rs. 252 crores which rose to an estimated Rs. 355

crores in

2003-04. Within the duration 2001-02 to 2003-04, India's export of turmeric decreased by 8.68 per

cent in terms

of volume but export earnings in rupee terms registered a growth rate of 41 per cent. This reflects a

marked

value addition (table 8). Similarly value addition is reflected by the enhanced export earnings for

ginger by 1.26

percent in terms of rupee even though the export volume decreased within 2001-02 to 2003-04

(table 8).

Table 8 Item-wise Export of Spices from India

2001-02 2002-03 2003-04 (E)

Spices Qty Value Qty Value Qty Value


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(MT) (Rs.

Lakhs)

(Mln

US $) (MT) (Rs.

Lakhs)

(Mln

US $) (MT) (Rs.

Lakhs)

(Mln US

$)

Pepper 22877.36 20368.79 42.81 21608.58 17887.98 36.99 16700.00 14350.50 31.27

Cardamom (Small) 1030.91 6167.80 12.96 681.83 4707.42 9.73 690.00 3301.00 7.19

Cardamom (Large) 1576.84 2391.66 5.03 1449.53 2057.08 4.25 800.00 1107.00 2.41

Chillies 69997.50 25244.02 53.06 81021.50 31514.68 65.16 81500.00 35511.25 77.39

Ginger 6464.20 2311.47 4.86 8461.43 2396.59 4.96 5000.00 2340.50 5.10

Turmeric 37777.58 9073.71 19.07 32402.30 10337.99 21.37 34500.00 12751.88 27.79

Coriander 15924.80 4833.87 10.16 18064.95 5564.64 11.51 21000.00 7103.75 15.48

Cumin 17247.70 14818.03 31.14 10422.07 9326.33 19.28 6700.00 4983.75 10.86

Celery 4251.01 1236.59 2.60 3959.95 1225.43 2.53 4400.00 1389.00 3.03International Conference

on Technology and Business Management March 28-30, 2011

745

Fennel 4374.41 1695.82 3.56 4159.63 1783.75 3.69 5200.00 2143.00 4.67

Fenugreek 6582.11 1617.14 3.40 13192.82 2551.06 5.27 7500.00 1660.75 3.62

Other Seed Spices (1) 9978.51 2790.79 5.87 14919.85 3617.36 7.48 10000.00 2324.75 5.07

Garlic 1105.59 409.78 0.85 1538.77 698.68 1.44 3500.00 1321.13 2.88

Nutmeg & Mace 1346.05 1990.19 4.18 1380.56 2847.36 5.89 1450.00 2731.53 5.95

Vanilla 27.30 1750.61 3.68 25.17 2225.72 4.60 26.32 3606.35 7.86

Other Miscellaneous


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Spices (2) 20529.48 6516.57 13.70 23897.69 7383.12 15.27 24000.00 7663.00 16.70

Curry Powder

/ Mixture 6305.41 5052.61 10.62 8491.90 6893.67 14.25 7600.00 6508.13 14.18

Mint Products (3) 11295.45 48474.34 101.88 13589.16 56557.94 116.94 11250.00 42505.00 92.63

Spice Oils &

Oleoresins 4510.42 37311.10 78.42 4838.81 39094.23 80.83 4750.00 37206.25 81.08

Total 243202.63 194054.88 407.85 264106.50 208671.02 431.45 246566.32 190508.50 415.15

Source www.indianspices.com

Note (1) include mustard, aniseed, bishops weed (ajwanseed), dill seed, poppy seed etc. (2) include

tamarind, asafoetida,

cambodge, cassia, saffron spices (nes) etc. (3) include mint oils, menthol & menthol crystal

Spices in Uttaranchal

A significant portion of Uttaranchal is under forest cover (almost 65%). There is, thus, excellent

potential for the

development of forest resources based Industries in the State, while taking due care to maintain the

ecological

balance and compliance with laws relating to forest conservation and environmental protection. In

addition,

there is ample scope to develop industries based on forest and agro-wastes such as lantana, pine-

needles, plant

and vegetative fibers such as Rambans, etc. Uttaranchal has been included in difficult area category

by the

Ministry of Food Processing Industry (MFPI), Government of India and hence units being set up in

Uttaranchal

will be eligible for higher incentives under the schemes of MFPI. The State Government is also

providing

matching subsidy for projects under various schemes of Agricultural & Processed Food Products

Export

Development Authority (APEDA), National Horticulture Board (NHB), Ministry of Food Processing

Industry

(MFPI) and the Natural Medicinal Plant Board (NMPB) subject to a maximum limit of Rs. 20 lakhs.The


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agronomic and topographic conditions available in Uttaranchal make it a good resource for valuable

spices viz.,

ginger, chillies and turmeric. The spices are grown at in the small land holding of the hilly state since

many

decades for their therapeutic reasons. With time the dependence on cultivation of spices like

turmeric, chillies

and ginger proved a viable source of income for the growers. The fragmented and distantly located

field and the

topography and distance from cities though posses great hurdles in arranging for an effective

marketing

arrangement. The major mandies for turmeric, chilly and ginger are Haldwani, Ramnagar and

Dehradun. The

volume of green chillies traded in year 2003-04 was 5,585 quintals, 664 quintals and 11,332 quintals

respectively from Haldwani, Ramnagar and Dehradun mandies. The dry chillies traded from

Haldwani,

Ramnagar and Dehradun mandies was 51 quintals, 1711 quintals and 522 quintals respectively in

volume terms

(table 4.9, table 4.10 and table 4.11). Ramnagar is considered as an important mandi for chillies

especially the

dry lakhari variety. The green and dry chillies were traded at Haldwani mandi at an average rate of

Rs. 521 per

quintal and Rs. 2610 per quintal respectively during the period July 2004 till January 2005 (table 9).

Table 9 Volume and Average Rates of Ginger, Chilly and Turmeric Traded in Haldwani Mandi

Duration 2003-2004 July 2004- 31st Jan 2005

Commodity Quantity

(Quintal)

Rates

Rs / Qtl Out of State Trade (Qtl) Quantity

(Quintal)

Rates

Rs / Qtl


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Out of State

Trade (Qtl)

Ginger 2616 not available 50% 1517 1426 50%

Chilly Green 5585 not available negligible 4223 521 negligible

Chilly Dry 51 not available negligible 25 2610 negligible

Turmeric 34 not available negligible 4 not available negligible

Source Primary Data Collected from Commission Agents of Haldwani Mandi and Mandi Office

Records

The rates at Ramnagar mandi was Rs.700-1400 per quintal for green chillies and Rs. 1500-4500 per

quintal for

dry chillies during the period July 2004 till March2005 (table 10). International Conference on

Technology and Business Management March 28-30, 2011

746

Table 10 Volume and Average Rates of Ginger, Chilly and Turmeric Traded in Ramnagar Mandi

Duration 2003-2004 July 2004- March 2005

Commodity Quantity

(Quintal)

Rates

Rs / Qtl

Out of State

Trade (Qtl)

Quantity

(Quintal)

Rates

Rs / Qtl

Out of State

Trade (Qtl)

Ginger 6969 1200-1500 negligible 4724 2100-4200 negligible

Chilly Green 664 600-1100 negligible 710 700-1400 negligible


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Chilly Dry 1711 1700-3600 negligible 972 1500-4500 negligible

Turmeric 276 1100-2800 negligible 292 1800-2000 negligible

Source Primary Data Collected from Commission Agents of Ramnagar Mandi and Mandi Office

Records

Table 11 Volume and Average Rates of Ginger, Chilly and Turmeric Traded in Dehradun Mandi

Duration 2003-2004

Commodity Quantity in

Quintal Rates Rs / Qtl Out of State

Trade (Qtl)

Ginger 18726 1602 50%

Chilly Green 11332 438 negligible

Chilly Dry 522 4200 negligible

Turmeric 535 2514 negligible

Source Primary Data Collected from Commission Agents of Dehradun Mandi and Mandi Office

Records

Turmeric traded in year 2003-04 from Haldwani, Ramnagar and Dehradun mandies was 34 quintals,276

quintals and 535 quintals respectively in terms of volume (table 4.9, table 10 and table 11). No out of

state trade

is reported at mandi offices for turmeric. The ginger was traded at an average rate of Rs.1426 per

quintal at

Haldwani mandi during the period July 2004 till January 2005 (table 9). The rates at Ramnagar

mandi was

Rs.2100-4200 per quintal during the period July 2004 till March2005(table 10). The volume of

ginger traded

in year 2003-04 was 2,616 quintals, 6,969 quintals and 18,726 quintals respectively from Haldwani,

Ramnagar

and Dehradun mandies. Out of this 50% of the traded volume is traded outside Uttaranchal at

Haldwani and

Dehradun mandi. Only the volume traded to Delhi is usually exported to some extent. Thus, the

volume of the


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spices exported from Uttaranchal could not be estimated correctly.

Problems Identified

Low productivity in the Spice sector is one of the serious problems facing the Indian Spice

industry. Result is low competitiveness in the international markets.

Poor product quality at farm level is another problem hindering reasonable price realization by

the producer. Insufficient infra-structure facilities for cleaning, scientific methods of

processing, storage and packing

Our present legal provisions relating to many elements that constitute SPS measures are

insufficient. India does not have a National Standard covering all the requirements of the

agreement under SPS measures. The regulations under AGMARK are only optional and not

mandatory and are not even comprehensive. Similarly, the provisions existing under the PFA

are also not comprehensive and provide loopholes for import of cheap spices from other

countries of origin. Under both the legislations, there is absolutely no reference to pesticide

residues. Out of the 164 molecules registered in the country, 26 are produced under deemed

registration regime and the situation has continued over years. This system of registration

would certainly have an adverse impact on the spices export from the country in the long run.

The major non-tariff trade barrier that seriously affects Indian export of spices is the presence

of pesticide residues, expressed as Maximum Residue Limits (MRLs). USFDA has prescribed

MRLs for several spices.International Conference on Technology and Business Management March

28-30, 2011

747

The rapid disappearance of some indigenous varieties of spices due to mixing of planting

material results in loss of genetic purity. Examples are varieties contributing to the production


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of Cochin ginger (viz. Kuruppampady, Ellackal), Alleppey finger turmeric (viz. Elanji), and

Byadagi chilli, etc.

-harvest Handling

Post-harvest operations involve drying, curing and primary packing. This reduces problems of

contamination. Scientific post-harvest handling has yet to come to the agricultural operations

in Uttaranchal. Our natural comparative advantages in production are being whittled away due

to the poor quality of the produce.

of Spice Production and Processing

Lack of desired level of value-addition at the primary processing level results in lesser returns

to the farmers and farm laborers.

India is facing stiff competition from other producing countries that supply spices in whole

form. Most of these countries have no domestic market for the spices they are producing,

forcing them to sell their produce even at cost price (examples cardamom from Guatemala,

pepper from Vietnam, cloves from Indonesia).

n of Export Materials

Farmers of spices like cardamom, chilly and ginger are heavily dependent on chemicals for

pest and disease control and fertilizers. Indiscriminate use of chemicals results in pesticide

residues beyond tolerable limits, leading to rejection of many consignments of spices from

India. Trade restrictions on contaminated food or feeds have the greatest effect on countries

like India, which currently have limited, or no available means of monitoring aflatoxin levels.

The toxins are particularly carcinogenic in humans and eating contaminated food often results

in liver cancer, amongst other diseases. Aflatoxins also act an immuno-suppressant so that

affected individuals become susceptible to a wide range of diseases. Besides endangering

human health, aflatoxin contamination seriously affects the export potential of high-value

commodity crops, such as edible nuts and spices like turmeric and chillies, which could

provide an important source of income for farmers.


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n is not Market-oriented

Extension is not focused on the needs of the market, especially the export market. The

available market information service is limited to a few areas and to a few sections and often

fails to recognize indigenous methods and factors to get a competitive edge in export of

spices.

This is a recurring complaint of the Indian spice farmer. The price situation is directly linked

to the supply position of each year. There are crops like chilly, where huge stocks are

maintained in cold storages. The price which ruled the previous year often influences farmers

to go in for large scale cultivation, irrespective of stocks available and neglecting the

possibility of alternate crops. This results in severe price crash. This situation repeats itself and

the vicious cycle continues. Added to this is the pressure of imports. India, on an average

(1998-99 to 2000-2001) imports 59,000 tonnes of spices, valued at Rs 280 crores per annum.

Though imported stocks are mainly for value addition and export, a part is meant for stock and

sale in the domestic market. Imports do, to a certain extent, suppress the domestic price,

affecting the prospects of Indian spice farmers. The alternative is to improve production of the

items that are imported and make them available at international prices. This is possible with

production support programmes.

ure

These are factors reducing the acquired comparative advantage. This is one of the major

reasons for the erratic production of individual spices, earning the country the label of

inconsistent supplier of spices.

This is restrictive factor especially planting material. Also there exist a non-availability of

suitable fertilizers and plant protection chemicals, suitable irrigation, facilities for on-farm

processing and storage, and adequate credit.International Conference on Technology and BusinessManagement March 28-30, 2011


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Unprecedented natural calamities often push these small and marginal growers into a crisis

situation. Small landholdings and less technical know-how add to the problem.

Of the 31.50 lakhs tonnes of spices produced annually, (excluding mustard), India could

hardly export 7.58 per cent. There have been severe shortages of exportable varieties of

spices in certain years. The major reason is burgeoning domestic demand. Demand for spices

from the upwardly mobile middle-class is on the increase. Changing eating habits and the

population explosion are also factors. This huge domestic demand leaves behind little surplus

for export and so exports are happening by accident rather than design.

The major causes of inferior quality in spices are:

oduction and postharvest

operations.

in this sector do not possess modern equipment for cleaning and grading or for

storage of spices.

in 8-12 per cent of moisture is not done after harvesting,

resulting in microbial contamination.

-hygienic surfaces creating further contamination from

microbes such as fungi, germs and bacteria including harmful ones like Salmonella,

Staphylococcus aureus, Bacillus cereus and Clostridium perfringens, yeast and

mould, E-coli, Coliform.

6. Conclusions


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Spices of India are being attracted by the consumer's, both in the domestic as well as in the

international market.

Several kinds of spices are grown in India since time immemorial, it is because of this he country is

known to

the world as "The Home of Spices". India is the largest producer as well as the consumer of the

spices in the

world. The demand for spices and its products are ever increasing both in the internal and external

markets.

India has a worldwide reputation as the only country which produces almost all kinds of spices and it

is through

these spices exports the country earns the much needed foreign exchange over a long period of

time., Despite

the tremendous importance of spices, it is rather unfortunate that the sector has not achieved the

required level

development because of the problems in the marketing, supply chain, exports, pre and post-

harvesting activities.

Most spice farmers are poor small scale farmers who produce spices as a cash crop next to

commodities such as

maize and bananas. For farmers to feel committed to spice production they foremost need aguaranteed and

competitive price for their produce, enabling them to support their families. If this is not the case

they might be

inclined to side sell produce to other buyers or even shift to the production of higher value crops,

such as cocoa

or coffee. Also exporters overseas are struggling. On the one hand they have to deal with hundreds

of small

scale farmers (usually through intermediate traders) who want a good price for their produce. On

the other hand,

exporters need to deliver products that comply with quality requirements and increasingly with

social and

environmental standards of volatile markets. This requires costly quality management systems and

training of

farmers.


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Producing spices for high quality markets such as in Europe, UAE and the US creates opportunities

(price

margins are usually higher) as well as constraints (higher requirements on quality). Producers and

exporters

need assistance to overcome these constraints. The pressures of globalization and liberalization are

creating

exclusive supply chains between preferred business partners. Smallholder agriculture is poorly

prepared for

these changes. A targeted effort is needed to include poorer households in value chains:

organizational

development, technical upgrading, management skills and access to financing are all required.

7. References

1. www.vigyanprasar.com

2. www.indianspices.com

3. www.etagriculture.com/nov_dec2002/cover.html

4. www.p-maps.org/mns/example_reports/sw2302

5. www.indiaonestop.com/markets/spices/spices.htm

6. www.itdg.org/docs/technical_information_service/turmeric.pdf

7. www.primaryinfo.com/turmeric.htm

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