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Environmental Analysis of Spices Industry

ENVIRONMENTAL ANALYSIS OF SPICES INDUSTRY

INDEX B.R.C.M. college of Business Administration

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Environmental Analysis of Spices Industry

TOPIC

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PAGE NO.

Introduction

3

Technological environment

5

Legal Environment

12

Economical Environment

21

Social Environment

28

International Environment

34

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What is an industry analysis? "Industry analysis is a tool that facilitates a company's understanding of its position relative to other companies that produce similar products or services...Industry analysis enables small business owners to identify the threats and opportunities facing their businesses...an industry analysis consists of three major elements: the underlying forces at work in the industry; the overall attractiveness of the industry; and the critical factors that determine a company's success within the industry." Encyclopedia of Small Business/ Kevin Hillstrom, Laurie Collier Hillstrom, Detroit : Gale Group/Thomson Learning, c2002 "Industry analysis is a type of business research that focuses on the status of an industry or an industrial sector. A complete industrial analysis usually includes a review of an industry's recent performance, its current status, and the outlook for the future. Many analyses include a combination of text and statistical data. There are many sources of industry analysis: investment firms, business and trade periodicals, trade associations, and government agencies. To conduct a thorough industry analysis, include a variety of sources." Duke University What is an environmental analysis? Looks at the external business....environment political, legal, economic, sociocultural and technological.... and examines the impact of each of these factors and their interplay with each other on the business. •

Political and legal -analysis of legislations, regulations, government policies.

•

Economic - analysis of exchange rates, inflation levels, income growth, debt and saving levels etc.

•

Socio-cultural - analysis of social factors that influence people's choices and include the beliefs, values and attitudes of society.

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Technological - analysis of the impact of new technologies - the Internet, EDI, mobile phones, and the increasing advances in computing.

Whole Spices Aniseed

Ajwanseed

Asafoetida

Badian seed

Basil

Bay Leaf

Black Pepper

Cassia

Cambodge

Caraway

Cardamom(small)

Cardamom(large)

Celery

Chilli

Cinnamon

Cloves

Coriander

Cumin

Curry leaf

Dill Seed

Fennel

Fenugreek

Garlic

Ginger

Juniper

Kokam

Long Pepper

Mace

Mint

Mustard

Nutmeg

Poppy

Pomegranate

Rosemary

Saffron

Sage

Star anise

Sweet Flag

Tamrind

Tejpat

Thyme

Tumeric

Vanilla

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TECHNOLOGICAL ENVIRONMENT Post Harvest Technology Post Harvest Technology mainly deals with pre and post harvest studies on cardamom, pepper, vanilla, ginger, turmeric and culinary herbs with the objectives to improve the quality of spices. Post-harvest operations involve drying, curing and primary packing. This reduces problems of contamination. Scientific post-harvest handling has yet to come to the agricultural operations in the country, especially in spices. Some traditional practices are lost in the course of time and new scientific practices are yet to become operational at the desired levels. This is one of the major reasons for quality problems in spice exports. Our natural comparative advantages in production are being whittled away due to the poor quality of the produce. China is able to supply aflatoxin free chilli (labelled products and bulk packing are solutions identified as reducing contamination, especially of external origin). Use of hygienic drying surfaces, use of mechanical devices (pepper deberrying, turmeric boiling and cleaning, ginger peeling), use of farm level storage, etc., are important interventions. Considering the vast area to be covered, this is a tall order. But quality management at farm level can improve our competitiveness in the international market. The main project of the division are: •

Evaluation of alternative fuel for cardamom curing.

•

Influence of stage of harvest of on the yield of oils and deoresins in black pepper.

•

Studies on storage of black pepper.

•

Effect of different methods of curing turmeric on curcumin content.

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Cardamom curing Methods using alternative fuel sources using LP gas are being standardised. Vanilla curing Processing of vanilla and further refinement of this technique is being carried out. Achievements •

It was found that the alkali treated cardamom capsule retained the natural green colour upto 6 months under proper storage conditions

•

A cost effective technology (retting method) for good quality white pepper production has been standardised.

•

Fenugreek paper paste applied on bamboo mat was found most efficient and clean for drying pepper

•

The oil content in pepper was found to be the highest when harvested in green mature stage

•

Vanilla curing has been perfected

•

Good quality bleached dry ginger can be produced by overnight soaking of fully peeled ginger rhizome in 2% line solution.

Future Focus •

Studies to reduce the cost and time of cardamom curing retaining the colour and quality of the capsule.

•

Alternative fuel like LPG and other driers should be evaluated for its efficiency

•

Better methods of storage of spices are to be developed.

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Transfer of Technology This division aims at bridging the gap between the scientists and planters by transferring the achievements in the institute for application in the planters field. This is mainly achieved through training programmes, conducting seminars, group discussions, exhibitions, organising spice clinics etc. Training programmes on production protection and post harvest technologies management of cardamom, vanilla and other important spices have been organized. Scientists of the institute serve as the resources personnel in seminars and planters meetings. Spice, clinic is an open house interaction between farmers and scientist were organized to classify the doubts. Exhibition have been organized at various places to enlighten the farmers with the latest technologies developed by the research institute. Vermiculture The division also undertake vermiculturing for the production of vermm compost using two types of exotic earthworms viz., Eudrella euginiae and Eisenia foetida. Studies are being carried out to compare the effect of different organic manure with the yield pattern in various crops like Black Pepper, Cardamom, Vanilla, Ginger, Turmeric etc. Achievements •

170 short term training programmes were conducted to transfer the new technologies.

•

Participated in 125 seminars along the length and breadth of the cardamom tract. B.R.C.M. college of Business Administration

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'Spice Clinics' were organized at different locations in Kerala and TamilNadu.

•

Participated in 20 exhibitions/melas by opening a stall to highlight the various achievements made in spice research.

•

The following Booklets were brought out: 1. Tips on vanilla cultivation, Books on 'Cardamom production technology'

- A guide to planters, 'Micro propagation of cardamom' - A Practical manual for handling cardamom tissue culture, & Herbal spices - cultivation and usage. 2. Need based advisory field visits to different estates are made to render farm advisory services 3. Scientist also participated in All India Radio programmes and also deliver lectures. 4. Video films on varieties, tissue culture, agro techniques, integrated pest and disease management in cardamom and another films on vanilla cultivation and vermiculture were brought out.

Statistics and Computer Division Statistics and Computer division is mainly concerned with planning and design of experiments, analysis of experimental data and integration of results of various research programmes identified in cardamom and other spices. In addition, software support is provided to the research as well as administrative section. Development of software for monitoring research programmes and farm labour wages are undertaken. Achievements •

A model was evolved for yield forecast in cardamom and vanilla.

•

The factors affecting the seasonal prices of cardamom has been studied

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Various experiments have been designed and the data obtained were analyased The various Softwares developed are: •

CRD, RBD and Factorial designs

•

Path analysis

•

Multiple correlation

•

Multiple regression

•

Time series analysis

•

Farm labour wages

•

Technical documentations

•

Monitoring research programmes

•

Library informations

Buhler India Improves Pulses Yield, Increases Spice Quality The benefits of Buhler technology start at an early stage: During raw material storage and precleaning, the efficient exhaust systems of Buhler equipment keep installations dust-free, and therefore also the product. Spices graded uniformly according to size and color sell better, achieving higher prices in the export markets. Processors can benefit from these advantages not only in connection with pulses and spices. The same classifying and sorting systems are also applied by Buhler in an adapted form for processing sesame, safflower, niger, and sunflower seeds. Whether for pulses, spices, or seeds, one thing always remains the same: Most importers demand high-quality, cleaned products with a purity degree of 99.92 to 99.98 percent – a task that sophisticated Buhler systems excel at. They are capable of grading such materials according to size, weight, shape, and – thanks to the application of high-resolution digital cameras – color. B.R.C.M. college of Business Administration

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Insufficient mechanization of spice production and processing This is the other limiting factor. Appropriate technologies need to be developed to improve productivity of workers engaged in spice production and processing. It will not only help in ensuring hygienic post harvest handling but also in cost effective production. Ginger peeling, solar drying of spices, boiling, drying and polishing of turmeric, on-farm processing of seed spices, are some of the areas which need immediate attention. Crop Insurance is urgently needed in the spice sector Unprecedented natural calamities often push the small and marginal grower into a crisis situation. In order to prevent this and to build up his confidence in sticking to cultivation of spices, it is necessary to extend crop insurance, with suitable packages to contain all possible risks in the areas of production, processing, storage and transport. Contract Farming In the context of the present thrust towards agri-business in the wake of economic liberalisation and globalisation, the small growers find it difficult to participate actively in the market economy. In many developing countries such farmers could become marginalised because economies of scale do not operate. These poor farmers therefore give up their traditional occupation of agriculture. One of the options identified to arrest this migration from rural to urban areas is to establish market linkages. An organised contract farming system would provide such linkages, which could enable small producers reap the maximum benefits and make production and processing competitive since this ensures improved inputs, better technologies and an assured market. As a policy initiative the necessary legal frame-work needs to be developed in individual states.

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Wider Applications of Biotechnology Protocols for the rapid multiplication of spices like cardamom, ginger, vanilla, curry leaf, turmeric and cloves have been developed by the Board using the tissue culture route. Some spice crops like vanilla or saffron require large-scale multiplication using this technology to cater to the ever-increasing demand for planting material. Advance technologies like somatic embryogenesis and synthetic seeds are being developed for cardamom and ginger. Protoplast culture for vanilla and anther culture for cardamom are also under testing. These techniques can, in due course, be employed to other spices also. This would ensure genetic purity, and the selection of the appropriate time for planting, as demanded by the market. Organic Farming Organic spices have a market in most countries. The Spices Board has prepared a package of practices for organic production of major spices and standards for organic spices. Driven by a series of government initiatives including the setting up of a regulatory frame work for proper certification and export promotion, the notification of the National Programme for Organic Production (NPOP) designated Spices Board as one of the accreditation agencies for certification. The Board, through the implementation of projects under UNDP and the World Bank, has assisted in the certification of nine projects, each comprising of 50-100 growers. Now one major policy initiative left undone is to achieve reciprocal recognition of organic standards with other nations and trading blocks and award a logo for Indian organic products.

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LEGAL ENVIRONMENT

SPICES BOARD – Introduction Out of the 109 spices listed by the ISO, India produces as many as 75 in its various agro climatic regions. India accounts for about 45% (2,50,000 tons-200203) of the global spice exports, though exports constitute only some 8% of the estimated annual production of spices at 3.2 million tons (2002). Over all, spices are grown in some 2.9 million hectares in the country. Spice production in India, as much of the agriculture in the country, is undertaken in millions of tiny holdings and determine the livelihood of large number of the rural population. SPICES BOARD - Constitution Spices Board was constituted on 26th February 1986 under the Spices Board Act 1986 (No. 10 of 1986) with the merger of the erstwhile Cardamom Board (1968) and Spices Export Promotion Council (1960). Spices Board is one of the five Commodity Boards functioning under the Ministry of Commerce & Industry. It is an autonomous body responsible for the export promotion of the scheduled spices and production development of some of them such as Cardamom and Vanilla. The Spices Board India (Ministry of Commerce, Government of India) is the apex body for the export promotion of Indian Spices. Established in 1987, the Board is the catalyst of these dramatic transitions. The Board has been with the Indian Spice industry every step of the way. The Board plays a far reaching and

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influential role as a developmental, regulatory and promotional agency for Indian Spices. Head office: The Head Office of the Board is located at Cochin. Board has Regional Offices Zonal Offices and Field Offices. A central Quality Evaluation Laboratory (QEL) is located at the Head Office. A Biotechnology Lab also functions at the Head Office. Indian Cardamom Research Institute the research wing of the Spices Board has its main station at Myladumpara (Idukki Kerala) with Regional Stations located at Thadiankudissai (Tamil Nadu) Saklespur (Karnataka) and Gangtok (Sikkim). Spices Board - Main Functions •

Research, Development and Regulation of domestic marketing of Small & Large Cardamom

•

Research & production development of vanilla

•

Post harvest improvement of all spices

•

Promotion of organic production, processing and certification of spices

•

Development of spices in the North East

•

Provision of quality evaluation services

•

Export promotion of all spices through support for

•

Technology upgradation •

Quality upgradation

•

Brand promotion

•

Research & product development

Other responsibilities related to export promotion of spices : •

Quality certification

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•

Quality control

•

Registration of exporters

•

Collection & documentation of trade information

•

Provision of inputs to the Central Government on policy matters relating to import & export of spices

QUALITY MARKING Quality has a special focus in Spices Board’s promotional strategy. To foster Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP), Spices Board approves use of Quality marking such as ‘Indian Spices Logo’, and the Spice House Certificate. The Indian Spices Logo is awarded to those who export spices in branded consumer packs. The award is given after a two tier inspection to satisfy compliance with regard to adherence to practices ensuring quality, hygiene and safety. Prior certification under HACCP is a precondition for awarding Indian Spices Logo. Nineteen (19) spice exporters are awarded with Indian Spices Logo. Board has registered Indian Spices Logo with the Trade Registry Authorities in 18 countries. Spice House Certificate is awarded to exporters of spices who possess the specified infrastructural facilities for cleaning, processing, grading, packaging and warehousing as the case may be. So far 58 units have been awarded Spice House Certificate. With effect from 10th September 2003 prior ISO and HACCP Certification is mandatory for obtaining ‘Indian Spice House Certificates’ Another step taken by Spices Board to ensure improved quality of exported spice is registration of brands (consumer as well as institutional packs (up to 25 kgs.) of registered exporters. The objective of the brand registration is to ensure

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specified standards of quality of both the product and packing. At present 55 exporters have registered their brands with the Board. To ensure quality, Spices Board assists registered exporters in acquiring ISO 9000 series accreditation. Similarly, processor exporters will be given grant-in-aid for consultancy and certification charges for acquiring HACCP Quality System.

“RIGHT TO INFORMATION ACT 2005” Statement of the categories of documents that are held by it or under its Control: Administration/Vigilance also hold the following documents/records: 1.Service records of employees 2.Property records 3.Asset registers 4.Documents relating to hired accommodations 5.Records relating to disciplinary proceedings 6.Annual Confidential Reports 7.Property Returns Documents/information held by Accounts Deptt., 1) Information on 5 year Plan allocations, Annual Plan allocations, approved Budget allocations

etc. for various schemes, programmes and projects.

2) Information on upto date expenditure for various schemes being implemented by different

departments.

3) Annual Budget proposals presented to the Board and the Govt. and approvals received on the same.

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4) Statement of assets and liabilities of the Board for the year under report and also for previous years 5) Information on payments made to various beneficiaries under different schemes being

implemented by the Board.

6) Details on payments of bills received for purchase of goods and materials and services

contracted and received

7) Information on internal and extra budgetary resources generated by the Board under various heads 8) Information on Plan and Non-Plan funds received during the year utilized upto date and balances held 9) Reports on audits conducted by the Accountant General, Kerala and the audit observations there off. 10)Final Accounts of the Board including Receipt and Payments Accounts, Income and Expenditure Account and Balance Sheet from the inception of the Board 11)Information on salary, allowances and advances paid to the employees of the Board from time to time 12)Information on pension paid to retired employees and family pensions etc. Documents/information held by Development Deptt. 1) Productivity improvement of small & large cardamom 2) Post harvest improvement of spices 3) Development of Exotic and High value spices 4) Promoting organic farming /IPM in spices 5) Export oriented development of spices N.E. States 6) Extension Advisory Scheme, 7) pepper planting material production

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8) New schemes of Rainwater harvesting devices for cardamom/vanilla and for improved

cardamom curing devices.

Documents/information held by Marketing Deptt 1) Adoption of High Tech & Technology Upgradation 2) Trade Promotion 3) Participation in International Seminars, Meetings & Trade Fairs 4) Publicity & Public relations 5) Trade Information Service 6) Marketing Services 7) Promotion of Indian Brands of spices and spice products in specified markets 8) Product Development and Research 9) Export Oriented Processing of spices in NE/Special areas 10) Equity fund Documents/information held by Research Deptt (1) Research activities of small & large cardamom and vanilla (2) Collaborative schemes of ICAR, DST & DBT, Bio-Tech production Unit (3) Conservation of germ plasm selection and hybridization (4) Development of protocols through tissue culture route for rapid multiplication of planting

material

(5) Development of organic and eco- friendly farming with the use of bio-agents Documents/information held by Quality Evaluation Laboratory 1) The analysis of spices and spice products for aflatoxin, pesticide residues, metallic contents,

microbiogocial contamination, , pathogen detection and

sudan.

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Environmental Analysis of Spices Industry 2) Collaboration with ASTA, IPC, NABL and CODEX 3) Training of personnel from spice industry on quality aspects

Documents/information held by Trade Information Service 1) Correspondences with DGCI&S, DGFT, IPC, ITC, Customs, etc. regarding Export/Import statistics of spices; 2) State/District-wise Area and Production details of various spices, collected from various

Agencies;

3) Daily, Weekly and Monthly prices of major spices in the domestic and international markets; 4) World Area and production of major spices; 5) Compilation and filing of Returns from the exporters; 6) Dissemination of information on trade and spices statistics. Documents/information held by Planning & Coordination Deptt. 1) Parliament Questions & Answers; 2) VIP References; 3) Budget proposals, Annual plans and Five-year plan proposals; 4) The Reports of the Parliamentary Standing Committee on Commerce and Prabhu Committee Report. 5) Geographical indications of Goods 6) Right to Information Act, 2005 and implementation thereof 7) Monthly Progress Reports and Annual Reports. 8) Promotion of ‘Flavourit’ brand of Indian spices.

Method Of Packing-

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(1) Spices (whole and powder) shall be packed in gunny bags/jute bags, poly woven bags, poly pouches, cloth bags or other suitable packages which shall be clean, sound, free from insects, fungal infestation and the packing material shall be as permitted under the Prevention of Food Adulteration Rules, 1955 made under Section 23 of the Prevention of Food Adulteration Act, 1954 (37 of 1954). (2) Suitable lining of food grade polypropylene/polyethylene/metallsied shall be used for packing of spices, (whole and powder) in gunny bags/jute bags, poly woven bags, cloth bags, paper bags and cardboard cartons; (3) Containers and packaging material, shall be made of substances which are safe and suitable for their intended use. They should not impart any toxic substance or undesirable odour or flavour to the product; (4) Spices (whole and powder) shall be packed in pack sizes as per the instructions issued by the Agricultural Marketing Adviser from time to time. (5) Each package shall contain Spices (whole and powder) of the same type and of the same grade designation; (6) Graded material of small pack sizes of the same lot/batch and grade may be packed in a master container with complete details thereon alongwith grade designation mark; (7) Each package shall be securely closed and sealed.

Method of Marking:(1) A grade designation mark shall be securely affixed to or printed on each package in a manner approved by the Agricultural Marketing Adviser or an officer authorized by him in this behalf in accordance with Rule 11 of the General Grading and Marking Rules, 1988; (2) In addition to the grade designation mark, following particulars shall be clearly and indelibly marked on each package:(a) Name and address of the packer; (b) Place of packing/manufacturing; (c) Date of packing;

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(d) Lot/batch number; (e) Grade; (f) Season of harvest (in case of chillies only); (g) Net weight; (h) Maximum retail Price; (i) Best before ——————month—————year. (3) The ink used for marking on packages shall be of such quality which may not contaminate the product; (4) The authorized packer, may, after obtaining prior approval of the Agricultural Marketing Adviser or an officer authorized by him in this behalf, mark his private trade mark or trade brand on the graded packages provided that the same do not indicate quality other than that indicating by the grade designation mark affixed to the graded packages in accordance with these rules.

Special conditions of certificate of authorization.In addition to the conditions specified under the sub-rule (8) of rule 3 of the General Grading and Marking Rules, 1988, the following shall be the special conditions of every certificate of authorization issued for the purpose of these rules:(1) The authorized packer shall either set up his own laboratory or have access to an approved grading laboratory for testing of Spices (whole and powder); (2) The premises shall be maintained in hygienic and sanitary conditions with proper ventilations and well lighted arrangement. The personnels engaged in these operations shall be in sound health and free from any infectious, contagious or communicable diseases; (3) The premises shall have adequate storage facilities with pucca floor and free from rodent and insect infestation; (4) The authorized packer and the approved chemist shall observe all instructions

regarding

testing,

grading,

packing,

marking,

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sealing

and

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maintenance of records which may be issued by the Agricultural Marketing Adviser or any other officer authorized by him in this behalf from time to time.

ECONOMICAL ENVIRONMENT

Rank of Spices import in India Rank Name of commodity Apr-2005 – Feb-2006

49 India Import Of - SPICES

Import Values of Goods ( Values in Rs. In crores) Apr 2006 - Feb 2007

631.71

Import Values of Goods ( Values in Rs. In crores) %Growth (Values IN Rs. in Crores) %Share (Values IN Rs. in Crores)

669.88 6.04 0.09

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Environmental Analysis of Spices Industry

Rank of Spices Export from India Rank Name of commodity Apr-2005 – Feb-2006

38 India Export Of - SPICES

Export Values of Goods (Values in Rs. In crores) Apr 2006 - Feb 2007

1894.59

Import Values of Goods (Values in Rs. In crores) %Growth (Values IN Rs. in Crores) %Share (Values IN Rs. in Crores)

2718.26 43.48 0.53

Indian Exporters & Manufacturers dealing in "spices" 1. Saathi International. 2. Shyam Dhani Industries. 3. Swastha Organic Foods. 4. G. Das & Co. Pvt. Ltd. 5. Skystar Exports Pvt. Ltd. 6. Ramdev Food Products Pvt. Ltd. 7. J. B. Spices. 8. Vinayak Corporation. 9. Madhur Industries Ltd.

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SPICES EXPORTS SURPASSED US$ 500 MILLION MARK EXPORTS IN 2005-06 Exports in 2005-06 •

320,527 tonnes

•

2295.25 crores (us$ 517.90 mln)

Exports in 2004-05 •

335,488 tonnes

•

2200.00 crores (us$ 490.60 mln)

Growth in export value •

4.3% in rupee

•

5.6% in dollar

Fob unit value realization •

2005-06 rs. 71.61/kg

•

2004-05 rs. 65.58/kg

Major contributors in terms of value •

Mint products 25% (rs. 575 crores)

•

Spice oils & oleoreins 22% (rs. 500 crores)

•

Chilli 18% (rs. 404 crores)

•

Seed spices 11% (rs. 225 crores)

•

Turmeric 7% (rs. 153 crores)

•

Pepper 5% (rs. 141 crores)

•

Cardamom 1% (rs. 27 crores)

•

Vanilla 1% (rs. 12 crores)

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Share in total export earnings (value) - 66% Major value-added forms •

Spice oils & oleoresins

•

Mint products

•

Curry powder & blends

•

Spice powders

Region of exports (value) •

East asia - 33% (rs. 757 crores)

•

America - 24% (rs. 550 crores)

•

Eu - 21% (rs. 471 crores)

•

West asia - 9% (rs. 210 crores)

Widening the Spices-Exported Basket The agro-climatic conditions available in the country are suitable for the introduction of exotic spices with a high market potential. Vanilla, paprika and herbal spices (rosemary, thyme, parsley, oregano, basil) are the spices identified for this purpose. Extension of high value spices like saffron will also help to achieve better exports. The Board is currently implementing a programme for increased cultivation of these spices. However, resources like planting material and capital are limiting factors. The current prices of the above commodities are highly remunerative to farmers. For instance, vanilla fetches around Rs 6,500 per kg. Extension of Spice Cultivation in Non-Traditional Areas India, boasts of almost 30 per cent of global production, but it could not even export a single consignment of aflatoxin free labelled chilli from the country.

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Non-traditional areas for spices like the north eastern region, special and hilly areas of other states, especially the newly formed ones, offer good potential for spice production for export. The climatic and other factors in these areas are congenial to spice cultivation. NGOs, CBOs and SHGs can be engaged in the introduction and maintenance of spice crops in these areas. The activities identified are: •

A comprehensive base line survey on the adaptability of various spices to non-traditional areas.

•

Exploratory studies on the availability of indigenous varieties of spices in these areas.

•

Support to the growers on input supply especially planting materials, transfer of technology (both pre and post-harvest), storage and marketing.

•

Establishment of export linkages.

•

Empowerment of rural communities, especially of women, in areas of production, on-farm quality management and marketing.

Inadequate Quantities of Quality Spices for Export The food safety standards of major importing countries mostly fall into the following categories: •

Macro cleanliness

•

Microbial load

•

Mycotoxin

•

Trace metal contamination

•

Pesticide residues

Major importing countries like the US, EU, Japan, Australia and New Zealand have their own standards. Poor availability of inputs

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This is another restrictive factor especially planting material. Except for cardamom and vanilla, development of all other spices is the responsibility of the state agriculture/horticulture departments. But the desired state run programmes for production of quality planting material are not forthcoming in many states. Therefore a restructuring of the present system of implementation of the programme is essential. It is also relevant to mention here that the rapid disappearance of some indigenous varieties of spices due to mixing of planting material results in loss of genetic purity. Examples are varieties contributing to the production of Cochin ginger (viz. Kuruppampady, Ellackal), Alleppey finger turmeric (viz. Elanji), and Byadagi chilli, etc. Through the required policy initiatives, these varieties must be protected so that export demand can be met, since there do exist niche markets for these varieties overseas. Non-availability of – suitable fertilizers and plant protection chemicals, suitable irrigation, facilities for on-farm processing and storage, and adequate credit. These are factors reducing the acquired comparative advantage. Considering the huge, small grower base, this issue gains greater significance in the areas of production and sustenance. This is one of the major reasons for the erratic production of individual spices, earning the country the label of ‘inconsistent supplier of spices’. Aashirvaad launches Organic Spices 2007-07-31 Source : Moneycontrol.com Aashirvaad, India’s largest selling kitchen ingredients brand from the ITC Foods stable today announced the launch of its new range of “Aashirvaad Select Organic Spices”. The launch of organic spices further reinforces Aashirvaad’s commitment towards providing perfect cooking aids for the Indian homemaker. The latest offerings of Aashirvaad Select Organic Spices – Coriander, Chili & Turmeric powders are available in packs of 100 gms and are priced at Rs. 32,

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Rs. 30 & Rs. 24 respectively. The range will be available across all grocery and departmental stores across metros.

Buhler India Improves Pulses Yield, Increases Spice Quality The benefits of Buhler technology start at an early stage: During raw material storage and precleaning, the efficient exhaust systems of Buhler equipment keep installations dust-free, and therefore also the product. Spices graded uniformly according to size and color sell better, achieving higher prices in the export markets. Processors can benefit from these advantages not only in connection with pulses and spices. The same classifying and sorting systems are also applied by Buhler in an adapted form for processing sesame, safflower, niger, and sunflower seeds. Whether for pulses, spices, or seeds, one thing always remains the same: Most importers demand high-quality, cleaned products with a purity degree of 99.92 to 99.98 percent – a task that sophisticated Buhler systems excel at. They are capable of grading such materials according to size, weight, shape, and – thanks to the application of high-resolution digital cameras – color.

B.R.C.M. college of Business Administration

Environmental Analysis of Spices Industry

SOCIAL ENVIRONMENT

Societal organization Specifications Stakeholders: Government • Local • Sub-national • National • Supra-national NGOs • Environmental NGOs • Development NGOs • Democracy and human rights NGOs • NGOs representing women • NGOs representing children • International NGOs

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Industry • Small and medium-sized (local) enterprises • National enterprises • Multinational enterprises • Farmers and farmer associations • Business associations • Trading organizations Other representatives of civil society • Labour groups • Parliamentarians (including opposition parliamentarians) • Community groups • Consumer organisations • Indigenous people • Poor communities • Academics

Spices Board to open retail outlets 4 June 2007 Commerce ministry promoted entity the Spices Board is floating a company to market spices in India and abroad. The new company called, Flavourit Spices Trading, will focus on selling a range of spices like mint, chillies and jeera, under the brand name Flavourit. The company will first launch products in Delhi in a couple of months and is negotiating with Mother Diary to sell Flavourit. An initial investment of Rs10 crore will be made by the Spices Board to set up the company, which will be based in Cochin but have presence throughout India.

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In a few years time, a private company could be roped in as a partner of the company. The company will have its own supply chain to package and market different spices, especially produced by small growers across the country. Services of the India Brand Equity Foundation will also be taken for promoting the product in international markets, where it would be positioned as a premium product. As per the plans drawn up by the board, spice parks will be set up in places across the country. Two spice parks will be set up for black pepper and cardamom in Idduki district in Kerala while one each in Lucknow for mint and Guntur for chilli. More over, a spice park will be set up in one of the North Eastern states for promoting organic ginger and turmeric. In addition, 65,000 hectares of pepper plantation and 45,000 hectare of cardamom plantation in Kerala will be replanted.

GENERAL SOCIAL FACTORS AFFECTING SPICE SINDUSTRY: Poverty Agriculture is often closely linked to the poorest and most vulnerable populations. Poverty is largely rural, with some 70 per cent of the poorest people in developing countries living in rural areas. Ecosystem degradation tends to harm rural populations more directly than urban populations and it has its most direct and severe impact on the poor, who are also highly vulnerable to ecosystem changes that result in famine, drought or floods. For many developing countries agriculture is the main source of economic growth, which is the cornerstone of poverty reduction. Between 1990 and 1999, World Bank estimates indicate that rural areas that experienced economic growth also experienced poverty reduction. B.R.C.M. college of Business Administration

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Migration/urbanization When economic opportunities, including employment, in rural areas are reduced by price changes or other changes brought about by trade liberalization and/or other forces, migration can occur. A number of traditional agricultural practices and sustainable production methods such as terracing, minimum tillage practices and contour ploughing rely on labour intensive maintenance. Male labour migration can also increase the workload on women and children. Where this takes children out of school, it can contribute to the perpetuation of poverty across generations. Rural development/property rights Access to quality services and physical infrastructure is often worse in rural areas than in urban areas, with or without poverty, and imposes substantial costs on almost all rural economic activity and development. The physical infrastructure, such as transport, energy and water supply, available for agricultural production in rural areas is often limited. Similarly, access of rural populations to electricity, in-house water supply and telephones is limited. Food security All countries, and in particular developing countries, consider food security to be an important issue that is linked closely to agriculture and food production. It is also closely linked to poverty, which is the largest cause of food insecurity, while food insecurity will contribute to the perpetuation of poverty. Food security has been defined by the World Food Summit as a situation “when all people, at all times, have physical and economic access to sufficient, safe and nutritious food, and to meet their dietary needs and food preference for an active and healthy life.”

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Spices protect against food spoilage Fans of hot, spicy cuisine can thank nasty bacteria and other foodborne pathogens for recipes that come from countries with hot climates. The same chemical compounds that protect the spiciest spice plants from their natural enemies are at work today in foods from parts of the world where-before refrigeration-food spoilage microbes were an even more serious threat to human health and survival than they are today, according to scientists at Cornell University. People who enjoy food containing antibacterial spices probably are healthier, especially in hot climates. They live longer and leave more offspring. Researchers believe the ultimate reason for using spices is to kill foodborne bacteria and fungi. To reach their conclusions, investigators reviewed more than 4570 recipes from 93 cookbooks representing the traditional, meat-based cuisines of 36 countries; the temperature and precipitation levels of each country; the horticultural ranges of 43 spice plants; and the antibacterial properties of each spice. Garlic, onion, allspice and oregano, for example, were found to be the best allaround bacteria killers, followed by thyme, cinnamon, tarragon and cumin (any of which kill up to 80% of bacteria in food). Capsicums, including chilies and other hot peppers, are in the middle of the antimicrobial pack (killing or inhibiting up to 75% of bacteria). Pepper of the white or black variety inhibits 25% of bacteria, as do ginger, anise seed, celery seed and the juices of lemons and limes. Cornell investigators found that countries with hotter climates used spices more frequently than countries with cooler climates. Indeed, in hot countries nearly every meat-based recipe calls for at least one spice, and most include many spices, especially the potent spices. In cooler countries, many dishes are B.R.C.M. college of Business Administration

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prepared without spices, or with just a few. As a result, the estimated fraction of food spoilage bacteria inhibited by the spices in each recipe is greater in hot than in cold climates. Such countries as Thailand, the Philippines, India and Malaysia are at the top of the hot climate-hot food list, while Sweden, Finland and Norway are at the bottom. The United States and China are somewhere in the middle. Cornell researchers studied these two countries' cuisines by region and found significant latitude-related correlations.

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INTERNATIONAL ENVIRONMENT

Spices are often the currency of the developing countries. The primary producers of spices include India (by far the largest producer and exporter), Egypt, China, Indonesia, Malaysia, Mexico, Turkey and Brazil. Since spices are always in demand in the industrialised world, export of these basic agricultural commodities by developing countries can be relied upon to earn valuable foreign exchange. The major importers are the US, Europe, Japan, East Asian and Middle Eastern countries. An added challenge is that exporting countries with low technology infrastructure have not only to satisfy highly demanding customers, but also to comply with the stringent food laws of the importing country. World Scenario The current estimate of world imports is 5,25,000 tonnes valued at US $ 1,500 million, with an annual growth rate of 4 per cent. This is against a world B.R.C.M. college of Business Administration

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production of 8.5 million tonnes valued at US $ 25 billion. The difference between world production and import is the domestic consumption of producing countries. As far as the product mix is concerned, the bulk of spices is exported in ‘whole’ or ‘unground’ form, while only 15-20 per cent of spices are sold in ground form, as mixtures of ground spices and as essential oils and oleoresins. The substantive shift towards natural products in the West has stimulated the demand for spices in recent times. Added to this is the new demand wave for organic spices in Europe, USA and Japan. Though the size of this market is small (around 1 per cent of the total market), the annual growth rate is to the tune of 25-30 per cent. Under the WTO-regime, countries hitherto inactive in the spice trade have started emerging as producers, posing a substantial threat to traditional exporters like India. These new entrants have practically no domestic market, which compels them to push their produce at cost price or even below it. Industries which require Spices for Production •

Packaged Spices

•

Frozen Dinners

•

Soups

•

Bread

•

Dairy Products

•

Snacks

•

Pizza

•

Pork Products

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Ranking of Companies producing Spices

RANK

COMPANY

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

BoMa Spices PEREZSA Spices Harmonia Spices KodiakAG Spices MikeCorp Spices Kimiko Spices Hailey Company JWco Electrics LRH spices aaronrt Batatoon Spices Boss500 Spices brennebn Spices Dmk holding Spi leinaD Spices Gideon Spices

Export value Major markets for Indian spices (value) •

Usa - 21% (rs. 477 crores)

•

Malaysia - 6% (rs. 145 crores)

•

Uk - 6% (rs. 134 crores)

•

China - 6% (rs. 132 crores)

•

Germany - 5% (rs. 118 crores)

•

Japan - 5% (rs. 105 crores)

•

Uae - 4% (rs. 93 crores)

•

Sri lanka - 4% (rs. 82 crores)

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Environmental Analysis of Spices Industry major ports (value) •

Cochin - 35% (rs. 810 crores)

•

Nhava sheva - 26% (rs. 606 crores)

•

Chennai - 8% (rs. 187 crores)

July 2006 •

Tuticorin - 6% (rs. 149 crores)

•

New delhi - 3% (rs. 75 crores)

major items / markets Pepper - 16,700 tonnes; Rs. 140.50 crores •

Usa - 6,500 tonnes

•

Uk - 1,600 tonnes

•

Germany - 1,250 tonnes

•

Italy - 1,050 tonnes

•

Canada - 1,000 tonnes

Cardamom - 875 tonnes; Rs. 27 crores •

Saudi arabia - 530 tonnes

•

Japan - 220 tonnes

Chilli - 113,250 tonnes; Rs. 403.50 crores •

Sri lanka - 28,000 tonnes

•

Malaysia - 27,000 tonnes

•

Usa - 17,000 tonnes

•

Uae - 8,700 tonnes

•

Indonesia - 5,350 tonnes

Curry powder - 9,000 tonnes; Rs. 77 crores •

Uk - 2,100 tonnes B.R.C.M. college of Business Administration

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Environmental Analysis of Spices Industry •

Usa - 950 tonnes

•

Saudi arabia - 925 tonnes

•

Australia - 500 tonnes

•

Kuwait - 425 tonnes

•

Hongkong - 400 tonnes

•

Belgium - 385 tonnes

Vanilla - 72 tonnes; Rs. 12.11 crores •

Usa - 35 tonnes

•

France - 24 tonnes

•

Germany - 9 tonnes

Spice oils & - 6225 tonnes; Oleoresins rs. 500 crores •

Usa - 1,850 tonnes

•

Germany - 730 tonnes

•

Uk - 400 tonnes

•

Japan - 400 tonnes

•

France - 315 tonnes

•

South korea - 290 tonnes

•

Spain - 200 tonnes

Major items •

Paprika Oleoresins - 2,750 tonnes

•

Pepper Oleoresin - 1,075 tonnes

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Capsicum Oleoresin - 730 tonnes

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Turmeric Oleoresin - 370 tonnes

Mint products - 11000 tonnes; rs. 575 crores

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Environmental Analysis of Spices Industry •

China - 2,300 tonnes

•

Usa - 1,900 tonnes

•

Singapore - 800 tonnes

•

Germany - 650 tonnes

•

Belgium - 350 tonnes

•

Uk - 350 tonnes

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BIBLIOGRAPHY 1. http://www.indianspices.com/html/resrch_01.html 2. http://www.powderandbulk.com/pb_services/news_center/publish/article_0 0541.shtml 3. http://www.infodriveindia.com/Export-Import/Trade-Statistics/TopProducts.aspx#Import_Trade_Statistics_Reports_ 4. http://www.gahooyoogle.com/search.php?st=Web&q=spices+industry+affe cting+indian+ecinomy 5. http://www.powderandbulk.com/pb_services/news_center/publish/article_0 0541.shtml 6. http://www.unep.ch/etb/publications/intAssessment/HandBookAgriSector.p df

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