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Spices Board set target of US$10 bn for exports by 2030
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Thursday, 02 January, 2025, 12 : 00 PM [IST]
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Ramkumar Menon
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Spices in India play a crucial role in not just in our cuisine, but are also deeply connected to the culture, history and economy of our country. India is the largest producer, consumer and exporter of spices in the world and is a major player in global spice trade today with a share of over 26% in terms of value and about 21% in volume. India also enjoys inherent advantages as a spice producing nation in that it has 15 agroclimatic zones, which enable it to grow as many as 75 spices out of 109 spices listed by the International Standards Organization (ISO) with capabilities to grow many more. It has major spice research institutions with a large pool of scientists and processors possessing world class facilities.
Spice Trade in 2030
The vision of the spice industry is to make India the premier processing hub of the world for value-added spices and herbs in the industrial, food service, retail and health / wellness sectors.
Spices Board of India has set a target of US$10 billion for Indian spice exports by 2030. Indian spice export has shown a steady increase over the years and has doubled in the last decade going up from Rs 13,735 crore (US$2.2 billion) in 2013-14 to over 36,958 crore (US$4.4 billion) in 2023-24. Currently, the global spice trade is valued at US$16.73 billion and the industry is expected to reach US$22 billion by 2030. It is also noteworthy that only 15% of the total spices produced in India are exported, while the remaining 85% are consumed in the domestic market. This segment of the market is conservatively estimated to be around Rs 100,000 crore (US$11.90 billion)
Challenges
To navigate and achieve the ambitious target of US$10 billion exports by 2030, it is necessary to know the challenges being faced by the Indian spice sector at different nodes of the supply chain be it production, quality or trade related. To begin with, Indian spice producers are mostly unorganised small and marginal farmers with land holdings less than 2 hectare and this brings in complexities of their own. Though the concept of Farmer Producer Companies is gaining wide popularity and helps in aggregation of the produce, thereby increasing market access and better price realisation, much work needs to be done towards modernisation of agriculture practices. Low productivity, extreme weather variations due to climate change and lack of awareness of the Good Agriculture Practices (GAP) or latest technology also contribute to the problem of inadequate production to meet the increasing demand from the domestic market as well as the export segment. All these factors lead to a low availability of exportable surplus of spices with the desired intrinsic parameters. A quantum jump in spice production and exportable surplus is needed for industry to meet its target. This requires a well planned programme by the Central and State Government departments responsible for spice production.
Once the produce is procured and processed, exporters still face many obstacles before the product reaches its final destination. The ever changing regulatory landscape, imposition of more and more stringent standards & food laws by importing countries and lack of harmonisation of quality standards in global trade are some of the challenges being faced by the spice industry. Introduction of new regulations like Deforestation Regulation (EUDR) and Corporate Sustainability Reporting Directive (CSRD) by the European Commission adds to the currently existing regulatory demands on exporters. Highly fluctuating prices, increase in freight rates and tariffs and competition from other producing countries also cause disruptions in smooth trade.
Opportunities
Spice applications have expanded from their traditional use as ingredients and flavours in the past decades and have spread to the nutraceutical, pharma and cosmetics sectors as well. To reach the target of US$10 billion exports by 2030, it is crucial that processors and exporters avail themselves of the opportunities provided by this development.
There has been an increase in the demand for ethnic and diverse cuisines globally as evidenced by the increasing popularity of Indian, Korean, Thai and Japanese cuisines all over the world. This calls for innovative product development and experimenting in non-traditional mixes, blend and seasonings. Adoption of latest technology and bringing the Indian spice processing sector on par with international facilities needs to be prioritised.
In the post Covid era, consumers globally have shown a general shift towards healthier lifestyles and demand for spices with health benefits has increased considerably. The rapid growth of the health and wellness sector which uses spices extensively is testimony to this.
With a rise in consumer awareness on the social and environmental aspects of food, companies providing traceability and transparency in their sourcing/ processing practices are mostly preferred. An added interest in sustainable and ecofriendly packaging solutions and organic spices is also proof of this change. Shifting trends in the food industry and hence spices has led to a heightened awareness on the part of the consumers of the food they purchase and consume. There has also been a sharper focus on traceability and transparency with regard to sourcing and processing practices of companies supplying products to the market. More and more companies are offering their customers access to their sourcing and production processes by adopting technologies like blockchain. Consumers’ demand for food safe spices with robust traceability and transparency systems has been increasing rapidly in the developed countries and to a lesser extent in countries like India and other developing nations. This trend is expected to continue. Consumers are also realising their potential to act as catalysts for change in promoting demand for sustainable and ethically sourced products and this is significantly affecting their purchasing decisions.
The spice sector is therefore expected to grow significantly by 2030 but there are serious challenges, however, as is well known, every challenge is an opportunity and those who rise to the occasion will stand to benefit from this immensely. A key ingredient for the growth of the spice sector by 2030 and beyond is collaboration amongst all the stakeholders. It is crucial for the industry, government agencies, regulatory bodies and research institutes to work together if they want to successfully navigate the challenges and opportunities and meet their objectives.
(The author is chairman, World Spice Organisation)
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