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The spices processing market in India has seen an increase in volumes, owing to the huge global demand for processed Indian spices such as oleoresins and seasonings, primarily from the UAE, the US, the European Union and the Asia-Pacific.
India is the largest producer and exporter of spices. India's estimated spices production stood at 5.9 million tonnes (mt) in 2012-13, while imports of 0.1 mt were recorded, Rabobank said in a report.
Though the sector hasn't seen new players, as the initial investment is very high, many existing companies have ramped up capacities to meet the growing demand, both in the domestic, as well as the export market. “Two years ago, I processed about 4,000 tonnes of spices. Now, I am processing 6,000 tonnes due to growing demand for processed spices. In the last 10 years the (spices) processing industry has seen tremendous growth,” said Jojan Malayil, chief executive of Bafna Enterprises, a Kerala-based spices producing company.
Through the last 10 years, the environment in this space has changed. Now, consumers prefer ground spices to whole spices. The urban domestic market has also started opting for readymade spices, and this has led to the emergence of various brands in this segment.
Overall spices consumption in the domestic market is 5.3 mt. In value terms, 20 per cent of this is accounted for by the branded segment. Rabobank sees this segment growing at a compounded annual rate of 12-15 per cent through the next four-five years.
"The demand for oleoresins and seasonings has led many players to focus on research and technology to manufacture innovative products. Revenue realisations on exports of value-added products have been quite high," Rabobank said in the report.
India has now started to face the heat from Vietnam as it is now emerging as a new spices exporting hub, but so far India still continues to remain the global leader.
