Suresh
P. Iyengar Realisation higher on tight global supplies |
Spices export has only seen growth in value and not in quantity. High prices for
Indian consignments are not due to better quality. |
Mumbai
, Jan. 4 Is it a cause for concern that spices export during
the first eight months of the current fiscal have stagnated in terms of volume,
but are up 29 per cent in value terms? Opinions differ. Higher value realisations
on exports are generally viewed positively; the country has realised higher prices
and possibly, exporters have enjoyed better margins. But here is a case
where a few exporters are not happy with the current state of affairs.
A decline or zero-growth in volume is not perceived as a healthy sign.
Low export surplus Indian spices received high prices this season
not because of better quality, but simply because of tightening global supplies
and lower export surplus in competing origins, according to some exporters. Spices
exports registered a 29 per cent growth to Rs 2,040 crore in the first eight months
(April-November 2006) of this fiscal, according to the Spices Board. Exports
have largely been value-driven rather than volume-driven, which experts feel is
not a healthy sign. In fact, volumes have gone up by just one per cent to 2,24,357
tonnes. Growth in value "This year's spices export has only
seen growth in value and not in quantity terms. Unfortunately, even this growth
in value is happening by accident and not by design and we do need to take urgent
steps to improve our productivity," said Mr Ajay Mariwala, MD, VKL Spices, a major
spices exporter. Among spices, Indian pepper, cardamom and chilli have enjoyed
excellent demand as world production of these commodities fell short of market
expectations. Strong demand for Indian black pepper in New York fetched
a premium price of $2,911 per tonne end-December, up about 70 per cent from $1,720
per tonne same period last year. Making the most of the robust demand, traders
have already exported 15,000 tonnes out of the Government approved export limit
of 20,000 tonnes for the financial year 2007 and another 4,000 tonnes are ready
for exports before March. world production Strong growth in
Indian pepper export is expected to continue through 2007 as world production
is estimated to fall short by 30,000 tonnes at 2.65 lakh tonnes against last year's
2.95 lakh tonnes. A part of the global decline will, of course, be accounted
for by India where output is estimated to be lower at 35,000-45,000 tonnes against
previous year's 51,000-55,000 tonnes. Guatemala's loss has been India's gain as
far as cardamom is concerned with prices for Indian cardamom in Saudi Arabia touching
$10,040 per tonne during December against $7,840 per tonne same period last year. In
2007, world production is estimated to be lower at 25,000-28,000 tonnes against
last year's production of 32,000-35,000 tonnes. India produced about 10,000
tonnes (11,415 tonnes) and marked up around 10 per cent for exports in 2006-07.
Dominant in Chilli For long, India has been a dominant player in
the chilli export market. Indian chilli was selling at a premium price of
$2646 per tonne in the US in December 2006 against $1477 per tonne during the
same period last year. India will export about 1.2 lakh tonnes in financial
year 2007, while market estimates an export of 1.5 lakh tonnes for financial year
2008. Chilli is the major spice contributing 31 per cent by volume and
17 per cent by value of total spices exported from India. Other commodities
such as fennel seed and fenugreek have gained value in global markets, while value
of ginger and turmeric fell. | 
