The Hindu Business Line : Spice it up

They are not essential food items, like cereals, pulses, cooking oil and salt; yet, spices have always been an integral part of the diet of rich and poor Indians alike, and increasingly of cuisines in different parts of the world, making meals tastier. A combination of sharply rising food prices and the threat of global warming could change the contours of global spices trade. In particular, they can affect exports out of India, currently valued at about $1 billion (Rs 4,0 00 crore) and targeted at $10 billion ten years from now. At the same time, rising internal demand — driven by soaring incomes and population increase — is set to further squeeze the already declining export surplus. From the World Spice Congress 2008 that concluded recently, the message to domestic producers is clear: “Do not overly depend on exports; but generate genuine surpluses if you want to continue to service overseas markets”. The message to overseas customers is louder. “Recognise emerging uncertainties in production; and partner with Indian export houses to produce specific spices in desired quantities”.

The time has come for the Kochi-based Spices Board to redefine its role. First, it must shed its traditional Kerala-centric approach. A wide variety of spices is grown across the country — from Gujarat and Rajasthan in the West, to the virgin areas of the North-East, endowed with salubrious agro-climatic conditions. It may no more be enough to look at primary production or processing or exports disjointedly. Needed is a holistic approach designed to find end-to-end solutions to strengthen the supply chain in the spices sector. In a competitive business environment, improved supply chain management involving growers and processors will help capture value. As more than one Central ministry is involved — Agriculture, Commerce, Food, Finance, Health — it is imperative New Delhi empowers the Spices Board to look at the sector holistically.

Traceability and compliance are two critical issues that will dominate food trade in the coming years. As food quality standards get tighter the world over, traceability — from farm to fork, as it were — will be a key determinant of success in the marketplace. On their part, food companies will have to ensure strict compliance with national and international food laws, or face a market backlash, including legal action. These challenges call for the Spices Board to become a ‘change agent’ in the attainment of global competitiveness. For corporates engaged in spices processing or food companies that are major industrial users of spices, there is a great opportunity to establish backward linkages. Investment in primary production, including through public-private partnerships, would help give them an edge. There is also opportunity for foreign food companies to partner with domestic firms to ensure uninterrupted supplies from India. There is surely a tasty meal at the end of the hard work.

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Adding spice to the domestic market

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