MBA Aspirants are expected to know markets beyond Brands. This helps them to understand different businesses concerned with our daily life. Today, you will read on Indian Spices Industry
It is a fact that Indians love spicy food and of course, spices. So, it does not come as a surprise that India is one of the largest producers of spices in the world. In fact, India is the world’s largest producer of cumin, chilli, ginger, and turmeric.
And it is the second largest producer of pepper in the world. Studies show that India produces approximately 3 million tonnes of spices on an annual basis, which are worth around Rp 186 billion (US$ 3 billion).
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According to the Spices Board, the Indian government body that promotes Indian spices, India accounts for about 30% of the world’s pepper production, 35% of the world’s ginger production and 90% of turmeric production.
Among all the states in India, Kerala tops the chart when it comes to the production of spices because the state produces close to 96% of pepper, 53% of cardamom, and 25% of ginger in the country.
Andhra Pradesh leads the country in the production of chilli and turmeric, with 49% and 57% respectively. Rajasthan is the largest producer of coriander, cumin and fenugreek, and the figures stand at 63%, 56% and 87% respectively.
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India is not just one of the largest producers of spices in the world but it is a prime exporter of spices too. In fact, India’s share in the world trade of spices stands at 48% in terms of volume and 25% in terms of value.
India exports over 4 lakh tonnes of spices on an annual basis. However, recently, India has suffered a setback in the export of its spices – the shipment of spices dropped 9% from 195,248 tonnes during April-June 2012 to 177,625 tonnes during April-June 2013 because of the economic slowdown in major markets such as Europe and the US.
According to the Spices Board, chilli suffered the most in terms of the export value as the cumulative volume dropped 19%. Apart from the economic slowdown in certain countries, the price of spices is yet another factor responsible for the decline of the total export value.
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A rise in the local demand for spices has kept the prices of spices high, especially that of chilli and pepper, and this is advantageous in the Indian context, where producers are able to make money from the Indian market. However, by keeping the prices high, Indian producers are losing out in the international arena.
India produces both whole and processed spices and majority of the processed spices are exported to Europe and the US. For example, black pepper produced in India is processed into green pepper, white pepper and oleoresin before being exported to European countries. To enhance the quality of spices and earn better revenue as a result, Indian spice producers carry out grading, sorting and standardisation of spices.
India has maintained the charm of its spices for decades and experts predict that despite economic slowdown in some countries, India will continue to be one of the top producers of spices for many years to come.