Surinder Sud: The online spice route

FARM ROUTE

Consumers the world over can now order Indian spices online. Thanks to Indian Post, these can now be delivered at the doorsteps, anywhere in the world.

Participating in this innovative marketing venture of the Spices Board are the giants such as the Indian Postal Department, STCL Ltd (formerly Spices Trading Corporation Ltd), IDBI, HDFC, UTI and Citibank.

Recently, the Spices Board floated a new brand, "Flavourit", for promoting the sale of quality-assured, especially organically-produced, spices.

Besides the dedicated online system, the products can also be booked from various head post offices in the country. To begin with, cardamom, pepper and vanilla are being sold under this brand. Other spices would be gradually added to the product list.

The motivation for this initiative came from the realisation that the producer's share in the consumer money spent on spices is gradually shrinking.

With the fragmentation of holdings, the average size of spice farms has fallen below half hectare. This, coupled with lower returns from the produce, has eroded the grower's income.

The new marketing effort is aimed at ensuring good returns to spice growers even while ensuring the quality and value for money to the consumer.

Under this venture, spices will be procured directly from farmer groups, and processed and packaged under the Flavourit brand. The surpluses generated from this business will be ploughed back in promoting Indian spices worldwide.

"In the process, we hope to establish the identity of Indian vanilla, a recent introduction in India of an exotic spice hitherto confined to Bourbon and some other islands of Polynesia. It also seeks to re-established the identity of the once popular Indian spice grades, such as Tellicherry garbled extra bold pepper (TGEB pepper) and Alleppey green extra bold cardamom (AGEB cardamom)," said Spices Board Chairman C J Jose while introducing the new brand.

Indeed, India has traditionally been the largest producer and exporter of spices. It is also has a huge domestic market for spices.

These herbal condiments are not only integral to most Indian culinary delicacies but also much in demand in the pharmaceutical and auyrvedic drugs industries because of their well-documented therapeutical properties.

At present, of the 5,25,000-tonne annual global spice trade, India enjoys a share of around 45 per cent by volume and 23 per cent by value.

In the current fiscal, till February, about 3,03,166 tonnes of spices worth $ 414.25 million have been exported.

The major items in the export basket are chilli (33 per cent), seed spices (22 per cent), turmeric (14 per cent), spice oils and oleoresins (7 per cent) and others (17 per cent).

In the case of spice oils and oleoresins, India meets around 70 per cent of the global demand.

But the Indian dominance in the world spice bazaar is now under threat from non-traditional spice producing countries that have emerged on the global scene in past few years.

Since, unlike India, the domestic consumption and, thus, the demand is very low in these countries, they can flood the international market with supplies at cheap rates.

There are other reasons for concern as well. The most significant are low productivity, shortage of good quality planting material (except in the case of cardamom and vanilla), inadequacy of desired plant protection material, and indifferent quality of produce, largely due to outmoded post-harvest handling practices.

This apart, the research and development effort for spices are being undertaken by public sector organisations alone, notably the Indian Council of Agricultural Research (ICAR), through its network of institutes and research centres.

There is practically no participation of the trade and spices-based industry in investment in this vital area.

Contract farming can take care of many of the problems facing the sector. Participating companies can, in their own interest, provide the desired seeding material and production and post-harvest technology to the growers.

But this practice is slow to catch on for want of suitable legal regime in most states.

Under the circumstances, the Spices Board has done well to take up the Flavourit venture.

If the interest shown by businessmen in the Flavourit spices project at a London trade fair last month is any indication, the project is likely to be a success.

However, some useful suggestions also emerged from the potential foreign buyers. They want larger packs of 10 to 50 kg as well. Besides, some also want links with processing houses in India which could produce and pack spices in their labels.

The Spice Board and the others participating in this venture would, obviously, do well to pay heed to these suggestions.

sud@business-standard.com