India looks to double spices exports in five years, integrate value chain
India plans to more than double exports of spices in five years by persuading importers to ease trade barriers and integrating the value chain from sowing to shipping.
PUNE: India, the largest spice producer and exporter, plans to more than double exports of spices in five years by persuading importers to ease trade barriers and integrating the value chain from sowing to shipping."If regulatory challenges are taken care of, exports can easily increase three times in five years," A Jayathilak, Spices Board chairman, told ET. Spices Board is India's apex body for spice export promotion.
India's spice trade bodies, led by the Spices Board, are visiting regulators globally to lobby for realistic import regulations. "Lack of uniform standards hinders fair trade in spices and the varying quality tests create difficulties for the exporters," Jayathilak said. "This also affects farmers, traders and exporters."
India has just crossed $2 billion, or more than Rs 11,000 crore, in annual exports of spices. India exports 54 varieties of spices. Importing nations' different standards for essential parameters like volatile oil, extraneous matter, total ash, etc along with permissible levels of pesticides and contaminants is a major hurdle, Jayathilak said. For instance, Middle-East countries permit 30 microgram or ug (one-billionth of a kg) of aflatoxin (a contaminant) in one kg of spice while this limit is 20 in the US, 15 in Canada and 10 in the EU.
"We have no issues in conforming to these regulations, provided the buyers are ready to absorb the increase in associated costs, which, they are not," Jayathilak said. Exporters say many importing countries have different standards for spice coming from two countries. For instance, Europe tests nutmeg imported from India for aflatoxin, while Indonesian nutmegs are allowed without any checks.
Traders also complain that in many importing countries, safety regulations are similar for spices and other food products such as milk and apples. "This isn't quite logical," Geemon Korah, chairman of All India Spices Exporters Forum, said. "The average daily intake of milk is easily above one glass while you may have two or three apples in a day. However, the daily consumption of spice is just about 2-3 gm, which is minuscule. Considering this, we are suggesting the regulation levels for spices be lowered," he said.
In July, K Chandramauli, chairman of Food Safety and Standards Authority of India, and Philip Kuruvilla, chairman of World Spice Organisation, a non-profit arm of Spices Board, represented India at the annual meeting Codex Alimentarius Commission and pushed for a Codex Committee and uniform standards for spices, aromatic herbs and their formulations, which accepted India's proposal and has requested a discussion paper on the same, the Spices Board chairman told ET.
Spices Board is also looking to remove unwanted specks in the production and supply chain within the country. As a first step, World Spice Organisation is evaluating a backward integration model to connect exporters, processors, farmers, state government, scientists, and regulatory officials.
In this model, farmers will cultivate spices to export requirements while exporters will assure buy-back at a premium through prior contracts. State governments will provide local support, and Spices Board, through its panel of scientists, will provide technical knowhow.
World Spice Organisation will co-ordinate and facilitate interaction between all parties.