The Hindu Business Line : Spices export loses flavour

STIFF competition from other producer-countries and a drop in unit value have pushed the export of spices down by over Rs 240 crore during the first nine months of the current fiscal.

As against 2,07,850 tonnes valued at Rs 1,588 crore during April - December 2002, exports this year stood at 1,66,013 tonnes, valued at Rs 1,345.57 crore — a drop of Rs 242.88 crore in value and 41,837 tonnes in volume.

Pepper, which used to be main item of exports until few years ago, fell from 16,300 tonnes to 13,200 tonnes; there has also been a substantial drop in chilli exports to 48,500 tonnes from 64,677 tonnes. Other seeds fell from 10,929 tonnes to 5,900 tonnes, as did fenugreek (from 11,925 tonnes to 5,200 tonnes).

Export of value-added spices also declined. Curry powder exports dropped from 6,513 tonnes, valued at Rs 51.42 crore, to 5,600 tonnes, worth Rs 46.33 crore; mint products fell from 10,386 tonnes to 8,500 tonnes,and spices oil and oleoresins dropped to 3,300 tonnes, worth Rs 259.89 crore, from 3,632 tonnes, valued at Rs 286.79 crore.

Official sources cited the entry of other players in the international market as the reason for the substantial decline. Besides, non-availability of the products at competitive prices is also responsible, they said.

The current situation is such that there is no exportable surplus in the case of many items because of the huge domestic market, where the growers were getting remunerative prices, Mr Ramkumar Menon, Chairman, All-India Spices Exporters Forum, told Business Line. Except for a few items such as celery seeds and turmeric, most of the other items were either in short supply or unavailable. When cumin, clove, cinnamon, etc. were unavailable, the availability of items such as pepper and coriander were inadequate. This not only resulted in increased raw material price but also impeded the export growth, he said. "We have to compete with these countries that which offer their its products at low prices. We are not competitive in terms of price as our productivity is the lowest in the world in many spices. The size of the land holding, lack of extension services and financial support could be responsible for this phenomenon. In fact, there is no real concern here on these factors and hence it hasn't got any priority, Mr Menon said.

Attributing the drop in exports of chilli, fenugreek and cumin to good production of other origins and low unit value, he said: "We expect good crop this season by Jan/Feb '04, which will make our product competitive and improve exports."

According to him, poor garlic crop in China and Egypt, the major producers, has led to the sharp increase in garlic export, he said.

The exports of mint products would pick up in the second half of the current fiscal, he added.

The increase in demand for ground spices from the US is a clear indication of the changing trend.

Given the current trend, it might be difficult to achieve the current year's target of 2,51,030 tonnes valued at Rs 1,900 crore, industry sources said.

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