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Challenges and Constraints of Marketing and Export of Indian Spices in India

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

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 earn valuable
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
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 literary record 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.
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
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International Conference on Technology and Business Management March 28-30, 2011

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 in Volume 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
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:
 To study the production and marketing of ginger, chilly and turmeric from Uttaranchal.
 To identify the problems faced by the growers and the export potential of these spices.

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 channels of 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
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
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 of ground spices
and as essential oils and oleoresins.
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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

(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

(In US Dollars per Metric Ton C&F unless otherwise Indicated)
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
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
Source The Market News Service for Spices, The International Trade Centre

Table 3 Average Demand in International Market for Ginger Varieties

(In US Dollars per Metric Ton C&F unless otherwise Indicated)
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 Centre
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International Conference on Technology and Business Management March 28-30, 2011

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

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

(In US Dollars per Metric Ton C&F unless otherwise Indicated)
France India S4 stem less 1000, with stem 950, powder 850,
Malawi bird's eye 3500, all june, Zimbabwe bird’s eye no quotations
Germany India S4 stem less 1175 june, powder 925 june
India S4 stem less 850 june-july, with stem 750 june-july, powder depending on
Holland
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 spot

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

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 bird’s eye and Zimbabwe bird’s 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.

India’s Position in Spice Production and Exports

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 country’s total export earnings. India accounts for 25-30 per cent of world’s 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 rupee terms
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
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.com
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International Conference on Technology and Business Management March 28-30, 2011

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 India’s 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
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
(Rs. (Mln (Rs. (Mln (Rs. (Mln US
(MT) (MT) (MT)
Lakhs) US $) Lakhs) US $) Lakhs) $)
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 3.03

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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
20529.48 6516.57 13.70 23897.69 7383.12 15.27 24000.00 7663.00 16.70
Spices (2)
Curry Powder
6305.41 5052.61 10.62 8491.90 6893.67 14.25 7600.00 6508.13 14.18
/ Mixture
Mint Products (3) 11295.45 48474.34 101.88 13589.16 56557.94 116.94 11250.00 42505.00 92.63
Spice Oils &
4510.42 37311.10 78.42 4838.81 39094.23 80.83 4750.00 37206.25 81.08
Oleoresins
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
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
Quantity Rates Quantity Rates Out of State
Commodity Out of State Trade (Qtl)
(Quintal) Rs / Qtl (Quintal) Rs / Qtl 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 March’2005 (table 10).

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Table 10 Volume and Average Rates of Ginger, Chilly and Turmeric Traded in Ramnagar Mandi
Duration 2003-2004 July 2004- March 2005
Quantity Rates Out of State Quantity Rates Out of State
Commodity
(Quintal) Rs / Qtl Trade (Qtl) (Quintal) Rs / Qtl Trade (Qtl)
Ginger 6969 1200-1500 negligible 4724 2100-4200 negligible
Chilly Green 664 600-1100 negligible 710 700-1400 negligible
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
Quantity in Out of State
Commodity Rates Rs / Qtl
Quintal 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 March’2005(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
spices exported from Uttaranchal could not be estimated correctly.

Problems Identified
 General Problems
 Low Productivity
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
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
 Insufficiency of Legal Provisions
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.

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 Some Indigenous Varieties are disappearing

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
of Cochin ginger (viz. Kuruppampady, Ellackal), Alleppey finger turmeric (viz. Elanji), and
Byadagi chilli, etc.
 Poor Post-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.
 Insufficient Mechanization 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.
 Competition
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).
 Rejection 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.
 Agricultural Extension 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.
 Problems of the Growers of Uttaranchal
 Inadequate Price for Producers
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.
 Pest and Disease Problems and Dependence on Nature
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’.
 Poor availability of Inputs
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.

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 Crop Insurance is Absent

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.
 Problems of the Exporters
 Inadequate Surplus for Exports
Of the 31.50 lakhs tonnes of spices produced annually, (excluding mustard), India could
hardly export 7.5–8 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.
 Insufficient Quantities of Quality Spices
The major causes of inferior quality in spices are:
 Lack of awareness among farmers of the latest technologies in production and post-
harvest operations.
 Facilities at the grading and packing centers are also rudimentary and the merchants
in this sector do not possess modern equipment for cleaning and grading or for
storage of spices.
 Proper drying of spices within 8-12 per cent of moisture is not done after harvesting,
resulting in microbial contamination.
 Drying of spices on non-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.
 Lack of real time knowledge of area sown, especially with annual crops.

6. Conclusions
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 a guaranteed 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.
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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8. http://finance.indiamart.com/markets/commodity/turmeric.html
9. http://www.wholehealthmd.com/refshelf/foods_view.html
10. www.indiancommodity.com/spices/spchilli.htm
11. R. K. Bhardwaj, N. K. Singh, Saurabh Singh and Ashutosh Singh. (2009).Greening the supply chain
for marine food products: Emerging issues and Policies. Souvenir & Abstracts. National Symposium
on “Organic livestock farming-Global issues, Trends & Challenges.”W.B.University of Animal &
Fishery Sciences, Kolkata, Feb.26-28.p-38.
12. R. K. Bhardwaj, M. Patel, R. Arya and S. K. Singh. (2008). Integrated farming-practices and potentials
for food safety. Proceedings of International Symposium on “Food Safety, Quality Assurance and
Global Trade: Concerns and Strategies” College of Veterinary and Animal Sciences, G.B.P.U.A & T,
Pantnagar. (INDIA) and College of Veterinary Medicine, Michigan State University. (USA), Nov .7-9,
p.169.

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