Product Profile: Spices
India, contemporarily known as the home of spices, has a long trading history with ancient and medieval civilizations of the world. Ancient trade routes connected India with Europe, Middle East and the rest of the world exists as a testimony to world’s preference for Indian spices since ancient times. Indian spices are known for its exquisite aroma and medicinal properties. Moreover, India has the world’s largest domestic market for spices.
India’s Present Scenario
Presently, India is the world’s largest producer, consumer and exporter of spices. It produces about 75 of the 109 varieties of spices listed by the International Organization for Standardization (ISO) and accounts for half of the global trading in spices. Top spices produced in India include pepper, cardamom, chilli, ginger, turmeric, coriander, cumin and others. Kerala is the topmost spice producing state in India and is also the largest producer of Pepper and Cardamom. The top importers of Indian spices in 2017 were: Vietnam, USA, Malaysia, Thailand, Sri Lanka, UAE and UK.
India has remained the topmost world exporter of spices throughout, followed by Vietnam and China. India’s spice exports accounted a phenomenal 16 per cent CAGR (10 years). In terms of value, the top spices exported by India in 2017 at HS-6 digit level were Chilli, Cumin Seeds and Turmeric. The individual yearly growth rate of these spices were also the highest, among the top spice product exports of India in 2017 (as per value terms). The top imported spices in the world in 2017 were Whole Pepper (USD 2.2 billion) and Capsicum (USD 1 billion). India was the fifth largest exporter of Whole Pepper in 2017.
USA was the largest world importer of spices in 2017, followed by Germany and Vietnam. India was the largest exporter of spices to USA, preceded by Vietnam. The top export of India to USA was crushed or ground pepper. Countries such as Germany and France largely imports Vanilla, followed by Pepper.
However, despite having a steady potential in exports of Pepper, India has been unable to tap it as the countries import pepper mostly from Vietnam, Indonesia and Brazil. Indigenous Spices of India, of which the global imports has increased at a steady rate in terms of CAGR (2013-2017) were Ginger (15 per cent), Cumin Seeds (26 per cent) and Turmeric (17 per cent).
Of the top world importers of spice, India’s export share is largest for Saudi Arabia, followed by USA. Vietnam, which is the second largest world exporter of Spices, imports Capsicum and Cumin seeds from India in large quantities.
The population in India is surging and the increasing consumer expenditure on food explains the swelling demand for food in India. Accordingly, the demand for spices is expected to grow in the future which will lead to a prominent growth in the revenues from the sales of spices in India. According to a report of a leading market research firm in India, the revenues from the Indian market are expected to expand to around USD 18 billion in FY’2020. The highest contribution to this growth is expected to come from the spice mixes and blended spices. Spices, being the flavoring agents have always seen a stable growth and is expected to grow consistently.