INDIA AND SPICES

India produces 2.5 million tones to 3 million tones of spices annually. India produces
spices of different categories worth around US$ 3 billion. In terms of volume and value, India
accounted for 46 percent and 23 percent in value of global spice trade. (Source: Spices Board
India) 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 percent), Cardamom (53
percent), 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. The world spice trade is estimated at US$ 1.5-2 billion in terms of
value and 500,000tonnes in terms of quantity

The spices market in India showcased a tremendous 10.0% CAGR in terms of value and a 3.7%
CAGR in terms of volume over the period FY2007-FY2013. Favorable changes in the
consumer preferences including switching of demand from straight spices to spice mixes and
unbranded to branded spices has augmented the industry revenues as both spice mixes and
branded spices entail greater profit margins as compared to straight and unbranded spices.
Increasing urbanization paired with rise in number of working women has reduced the time of
cooking spent by the home makers in the kitchen. According to the research report India Spices
Market Outlook to FY2018: Spice Mixes and Branded Spices to Augment Industry Revenues
by Ken Research, the spices market would grow at a considerable CAGR rate thus exceeding
over USD 16,600 million by FY2018 due to the major push from spice mixes and branded spices
segment in India

CURRENT SCENARIO

Within the past one decade, the international trade in spices has grown by leaps and bounds. As
estimated 500.000 tone of spice and herbs values 1500 million US dollars are now imported
globally every year. An impressive 46% of this supply comes from India. Indias exports and
spice extracts have made spectacular growth attaining over 50% of the global market within a
short span. This remarkable achievement is boon of a sea change in the industry scenario.

INDIA'S SHARE IN THE GLOBAL SPICE MARKET

The Indian spice industry is booming with a substantial increase in exports over the past few
years. India accounts for nearly 45% and 30% in terms of volume and value in the world spice
trade.The booming global spice market also poses good opportunities for the Indian spice
industry to provide quality spices at competitive prices. India faces stiff competition form China,
Malaysia and Pakistan in terms of pricing of the products. Manufacturers should therefore ensure
consistency in supply, product quality, pricing and marketing strategy to increase the share in
exports.Producers are incorporating latest methods and technologies to ensure higher quality of
spices and herbs. India is one of the prime exporters of pepper, chilies, turmeric, seed spices and
spice derivatives to the rest of the world. USA, EU, Japan, Pakistan and Sri lanka import these
Indianspicesinlargevolumes.

SPICES BUSINESS IN KERALA

Kerala is a land of spices considering the large variety of spices grown in the state. The most
popular among the spices are pepper, cardamom, turmeric, chilies and ginger. Pepper known as
the king of spices is perhaps the worlds oldest known spice and is cultivated in over 15800
hectares in Kerala, which account for 96% of the total production in the country. There are a lot
of opportunities for investors in spice sector and spices board.About 2,69,178 hectares of land in
Kerala is used for spices cultivation producing more than 1,60,000 tonnes of spices annually.
Pepper alone is cultivated in 1.85.000 hectares, producing on an average more than 50,000
tonnes ofblack pepper. It has been estimated that more than 90 percent of Indian pepper is
produced in Kerala
EXPORTS OF SPICES FROM INDIA

INDIAN SHARE

At present India produce around 2.5 million tones of different spice valued at
approximately 3 million US dollar, and hold the premier position in the world. Because of the
varying climate suitable for the spice cultivation almost all spices are grown in this country. In
almost all spices are grown in this country. In almost all the 28 states and six union territories of
India, at least one spice is grown in abundance. No country in the world produces as much
variety of spices as India.

India caters to the 48% of the demand of spices in the world. The spices market in India
showcased a tremendous 10.0% CAGR in terms of value and a 3.7% CAGR in terms of volume
over the period FY2007-FY2013. Favorable changes in the consumer preferences including
switching of demand from straight spices to spice mixes and unbranded to branded spices has
augmented the industry revenues as both spice mixes and branded spices entail greater profit
margins as compared to straight and unbranded spices. Increasing urbanization paired with rise
in number of working women has reduced the time of cooking spent by the home makers in the
kitchen. Consequently, instead of making the spice mixes by purchasing straight spices, home
makes have started demanding readymade spice mixes such as Sabzi Masala, Garam Masala,
Chicken Masala and others. Major players have been concentrating in making a strong brand
portfolio of spice mixes via investing a huge chunk of revenues in brand building and research
and development in the segment of spice mixes.
Media penetration in rural regions of India is increasing as the literacy rate in rural areas is
surging which is further leading to increase in the number of newspaper readers and TV owners.
Media Penetration together with the increasing personal disposable income and rising
urbanization has propelled the market for branded spices in India. A huge influx of regional
players as well as foreign players including Orkla and McCormick in the market space has been
witnessed which is likely to expand the revenues from the sale of branded spices in India.
According to the research report India Spices Market Outlook to FY2018: Spice Mixes and
Branded Spices to Augment Industry Revenues by Ken Research, the spices market would
grow at a considerable CAGR rate thus exceeding over USD 16,600 million by FY2018 due to
the major push from spice mixes and branded spices segment in India.

India can now boast as the monopoly supplier of spice oils and
oleoresins the world over.
In the case of curry powders, spice powders, spice mixtures and spices
in consumer
packs, India is in a formidable position. The consistent effort of the
Board during the last
one decade has improved the share of the value added products in the
export basket to
60%

India is known the world over as `The Home of Spices. The climate of the country is ideal for the
growth of almost all spices. Spices are an important group of agricultural goods, which are
virtually indispensable in the culinary art. They also play a significant role in our national
economy and also in the economies of several spice producing, exporting and importing
countries. India accounts for about 45% of the global spice exports. In India, from the point of
view of both domestic consumption and export, spices are important commercial crops.
According to the International Organization for Standardization [ISO], there are about 109 spices
and India produces as many as 75 in its various agro climatic regions. The term ` spices and
condiments` applies to `natural plant or vegetable products or mixtures in whole or ground form,
which are used for imparting flavor, aroma and piquancy to the food items`. Spices are also
being used within the country for flavoring foods and in medicines, pharmaceutical, perfumery,
cosmetics and several other industries.
Spice industry has been witnessing phenomenal growth rate both in the international and
domestic sector. The growth in this sector can be attributed to the change in the life style patterns
of the consumers all over the world. The shift in the consumption trend towards natural products
has also contributed to the increased global demand of spices and culinary herbs. Spice and
derivatives market is booming because these products find applications in a number of industries
including pharmaceutical, medicine, beverages, food processing, etc. A few developing countries
especially in the Asian continent are the major producers of variety of spices. A large percentage
of international and domestic trade takes place in the dried form. India, Indonesia, China are few
of the prime producers of a variety of high quality spices and also significant contributors to the
global spice market.