Chapter 3 PERFORMANCE OF SPICES TRADE IN INDIA AND KERALA India occupies a prominent position in the world spice trade. In the estimated world trade of species of 8,50,000 tonnes valued at US$ 2,200 millions, India occupies a share of 44 per cent in quantity and 36 per cent in value. In terms of production too India has an upper edge, as no other country in the world produces as many spices as India does. The list vary from the hot spices like chilly, pepper, ginger to mild pungent and spicy items like cardamom, coriander, cumin and herbal spices like thyme, rosemary, mint and finally vanilla from the orchid family. Annual production of these spices in recent years has gone well above four million tonnes. It is significant to note that only nine to ten per cent of the total production is exported and the rest is consumed domestically. In India, Kerala is the leading producer and exporter of black pepper, cardamom, nutmeg and mace. During the year 2006-07, production of black pepper in Kerala was 64264 MT (91.8 per cent of total production in the country), that of cardamom was 8545 MT (76 per cent of total production), and that of nutmeg and mace 1761 MT (94 per cent of total production). During 2006-07, the exports from Kerala was, black pepper 25537 MT valued at Rs.27188 Lakhs, cardamom 371.5 MT valued at Rs.1310 lakhs and nutmeg and mace 1761 MT valued at Rs.3581 lakhs. The present chapter has been given to assess the performance of spices trade, particularly pepper and cardamom in India and Kerala. Variables viz. area under cultivation, production, productivity, export and price have been used for the assessment.
68 3.1 Performance of Black Pepper in India and Kerala Black pepper is a prominent spice in the spice economy of India. More than 95 per cent of the global output of black pepper is confined to six nations viz. India, Indonesia, Brazil, Malaysia, Thailand and Vietnam. India though had dominant position in the pepper production, its position in recent years declined and at present Vietnam tops in production. The International Pepper Community (IPC) countries now corner 80 percent of the global trade in black pepper. Kerala is the leading pepper producing state in the country. Kerala accounts for more than 95 percent of the total area under pepper cultivation as well as output (Tables 3.7 and 3.8). Karnataka is the second largest state in black pepper production, with the share of more than 2 per cent of the total output in the country. Tamilnadu, Pondicherry and A&N Islands contribute the rest of pepper production in India. 3.1.1 Area under Cultivation and Production of Black Pepper in India and Kerala Tables 3.1 shows that Kerala accounts for more than 93 per cent of area under pepper cultivation in India. The area in Kerala has increased from 173860 hectares during 1997-98 to 216710 hectares during 2006-07, i.e. increase of 24.65 per cent. Production of black pepper in Kerala has also increased from 55520 tonnes during 1997-98 to 64260 tonnes during 2006-07. Meanwhile, the annual average growth rate of area under cultivation of pepper in India (3.16) is higher than that of Kerala (2.61).
69 Table 3.1: Area under Cultivation of Black Pepper in India and Kerala Year Area under cultivation (jn hectares) India Kerala % Share of Kerala 1997-98 181530 173860 95.7 1998-99 189840 182380 96 1999-00 209670 198410 94.6 2000-01 213860 202130 94.5 2001-02 218220 203960 93.5 2002-03 223060 208610 93.5 2003-04 235430 216440 92 2004-05 267110 237670 89 2005-06 257240 237990 92.5 2006-07 236180 216710 91.8 Period Average 223214 207816 93.3 AAG 3.16 2.61 Source: spices statistics Spices Board 3.1.2 Production of Black Pepper in India and Kerala Similar to area under cultivation, Kerala accounts for more than 94 per cent of the pepper production in India (Table 3.2). The production in Kerala was 55520 MT during 1997-98. It rose to 64260 during 2006-07, an increase of 15.74 per cent. Meanwhile, the average annual growth rate in production in India (4.48) is higher than that of Kerala (3.72). But, as per IPC statistics the total world production of pepper was 266000 MT during 2006-07 of which India s share was 74000 tonnes (i.e. 29%). Table 3.2: Production of Black Pepper in India and Kerala Year Production (in MT) India Kerala % Share of Kerala 1997-98 57330 55520 96.8 1998-99 70160 68510 97.6 1999-00 50120 47540 94.8 2000-01 63670 60930 95.7 2001-02 61460 58240 94.8 2002-03 70600 67360 95.4 2003-04 74260 69020 93 2004-05 81930 74980 91.5 2005-06 91750 87610 95.5 2006-07 73890 64260 87 Period Average 69517 65397 94.2 AAG 4.48 3.72 Source: Spices Statistics, Spices Board.
70 3.1.3 Productivity of Black Pepper in India and Kerala Table 3.3 shows that the productivity of pepper (Kg/hectare) in Kerala (314.2) is only slightly above the national average (311.4). But the annual average growth rate in India (1.58) is higher than that of Kerala (1.15). Among the pepper growing areas in India, productivity levels are high in Karnataka. During 2006-07 the productivity of pepper in Kerala was only 297 kg/hectare, while it was 577 kg/hectare in Karnataka, 227 kg/hectare in Tamilnadu and 60.6 kg/hectare in A & N Islands and the all India figure of productivity was 313 kg/hectare. At the international level the productivity of pepper in India is one of the lowest in the world compared to other pepper growing counties. During 2004-05 productivity of pepper was 3393 kg/ha in Thailand, 2100 kg/hectare in Vietnam, 1538 kg/hectare in Malaysia and 1000 kg/hectare in Brazil, whereas it was only 307 kg/ha in India (Spice India 2006). Table 3.3: Productivity of black pepper in India and Kerala (Productivity Kg/hect) Year India Kerala 1997-98 316 319 1998-99 370 376 1999-00 239 239 2000-01 298 301 2001-02 282 286 2002-03 317 323 2003-04 315 318 2004-05 307 315 2005-06 357 368 2006-07 313 297 Period Average 311.4 314.2 AAG 1.58 1.15 Source: Spices Statistics, Spices Board 3.1.4 Export of Pepper from India and Kerala After meeting the domestic requirements, substantial quantity of black pepper is exported from India. Till 2006, black pepper was the largest foreign exchange earner among all spices in the country. During 1986-87, the total earnings from the export of spices were Rs.2820 million of which pepper alone
71 accounted for Rs.2003 million, i.e. 71 per cent of total earnings from spice exports. During 1998-99, India exported 34864 tonnes of pepper valued at Rs.638.11 crores compared to 35907 tonnes valued at 496.36 crores during 1997-98. In terms of value realization, the performance during 1998-99 was a record, however quantum wise, the achievement of 1993-94 (i.e 48743 tonnes) is still the best. With the increased internal consumption in India, the export of pepper declined from 35907 tonnes during 1997-98 to 17363 tonnes during 2005-07. However, during 2006-07, the export of pepper increased to 28750 tonnes valued at Rs.140.50 crores as compared to 14150 tonnes valued at 121.40 crores during 2004-05. Table 3.4 below shows the export of pepper from India and Kerala. Table 3.4: Export of pepper from India and Kerala (Qty in tones) Year From India From Kerala % share of Kerala 1997-98 35907 33544 93.4 1998-99 34864 32002 91.7 1999-2000 42824 40282 94 2000-01 21830 19073 87.3 2001-02 22877 20445 89.3 2002-03 21609 15636 72.3 2003-04 16635 13728 82.5 2004-05 14150 10962 77.4 2005-06 17363 12008 69 2006-07 28750 25537 88.8 Period Average 25681 22322 AAG 2.28 4.68 Source: Spices Statistics, Spices Board Table 3.4 shows that the share of pepper exports from Kerala in the total pepper exports from the country is gradually declining. While it was 93.4 percent during 1997-98, it increased to 94 percent during 1999-2000 and then started declining. During 2005-06, the share of pepper export from Kerala in the total pepper export from the country was only 69 percent. However, the annual average growth rate in the export of pepper from Kerala (4.68) is much higher compared to India (2.28).
72 3.1.5 Trend of Prices of Pepper in Kerala There was a general decline in the production of black pepper in major producing countries during 1997-99. This resulted in an increase in the prices of black pepper in domestic as well as international markets during 1998-99. The average domestic price increased from Rs.63 per kg in 1994-95 to Rs.206 per kg in 1998-99. The unprecedented rise in the domestic price resulted in an average f.o.b. value realization of Rs.180 per kg against the previous highest of Rs.136 per kg in 1997-98. The domestic price of black pepper reached a high of Rs.280 per kg during 1999 and thereafter it started declining during the succeeding years (Table 3.5). After many years of low prices, by the end of 2006 the pepper prices showed a reviving trend. From Rs.64/kg in October 2005, the price of black pepper has gone up to Rs.124/ kg. in September 2006. After some initial ups and downs, the prices have again gone up and the average price for June 2007 has been reported as Rs.143/kg. But, average annual growth rate is 0.47). Table 3.5: Trend of Prices of Black Pepper in Kerala Year Price in Rs. (Per kg) 1997-98 173.43 1998-99 206.03 1999-00 215.02 2000-01 174.24 2001-02 80.39 2002-03 88.32 2003-04 74.11 2004-05 69.08 2005-06 66.44 2006-07 100.50 Period Average 124.76 AAG 0.47 Source: India Pepper and Spices Trade Association (IPSTA) 3.2 Performance of Cardamom in India and Kerala Cardamom enjoys an enviable commercial value in the global spice market. Till 1983, India was the world s largest producer and exporter of cardamom. But towards the end of 1980 s, Guatemala emerged as the leading producer and exporter of Cardamom, with 97 percent share of global export.
73 Now India is the second largest producer with an average production of 11000 to 12000 metric tonnes. In India, cardamom cultivation is concentrated in the evergreen forests of Western ghats in South India. Kerala is the major cardamom producing state followed by Karnataka and Tamil Nadu. During 2006-07, Kerala accounted for 57 percent of total area under cardamom cultivation in India and 77 percent of production; Karnataka accounted for 36 percent of total area and 15 percent of production and Tamil Nadu accounted for 7 percent of total area and 8 percent of production (Spices Statistics, 2005). 3.2.1 Area under Cultivation of Cardamom in India and Kerala Table 3.6 reveals that 57 percent of the area under cardamom cultivation in India is in Kerala. Out of the area under cultivation in Kerala, Idukki district alone accounts for 90 per cent, Wynad district 4 per cent, Palakkad district 3 to 4 per cent and other areas 2 to 3 per cent. Mean while, the annual average growth in the area under cultivation in India (.15) is slightly higher than that of Kerala (.11). Table 3.6: Area under Cultivation of Cardamom (small) in India and Kerala (Area in Hectares) Year India Kerala % share of Kerala 1997-98 72444 41200 57 1998-99 72135 41449 57.5 1999-00 72429 41491 57.3 2000-01 72320 41288 57.1 2001-02 72663 41336 56.8 2002-03 73125 41412 56.6 2003-04 73237 41332 56.4 2004-05 73725 41378 56.1 2005-06 73795 41367 56 2006-07 73228 41362 56.5 Period Average 72910 37662 56.7 AAG 0.15 0.11 Source: Spices Statistics, Spices Board
74 3.2.2 Production of Cardamom (small) in India and Kerala Similar to black pepper, Kerala tops in the production of cardamom also. The average share of Kerala in the cardamom production in India during the period of study (1997-98 to 2006-07) was 74.1 per cent Table 3.7). The production of cardamom in Kerala during 1997-98 was 5932 metric tonnes but it increased to 8545 metric tonnes during 2006-07, an increase of 44 per cent. Again, the average annual growth in the production of cardamom in Kerala was 3.8 but in India it was 3.67. Table 3.7: Production of Cardamom (small) in India & Kerala (Production in MT) Year In India In Kerala % Share of Kerala in Total production 1997-98 7900 5932 75 1998-99 7170 4990 70 1999-00 9330 6585 71 2000-01 10480 7580 72 2001-02 11365 8380 74 2002-03 11920 8680 73 2003-04 11580 8875 77 2004-05 11415 8616 75 2005-06 12540 9765 78 2006-07 11235 8545 76 Period Average 10493.5 7794.8 74.1 AAG 3.67 3.8 Source : Spices Statistics, Spices Board 3.2.3 Productivity of Cardamom in India and Kerala Table 3.8 shows that the productivity of cardamom in Kerala is far higher than the productivity at the national level through out the period of study. The average productivity of cardamom in Kerala was 249.7 Kg/hectare, but in India it was 189.2 kg/hectare. In Kerala the average per hectare yield during 1970 was as low as 46 Kgs, which increased to 100 Kgs per hectare during 1990, which further increased to 276 Kgs per hectare during 2004 to 283 Kgs/hectare during 2006-07. Though this is the state average production, some plantations in Kerala even produce 1000-1500 Kgs per hectare regularly.
75 Again, the annual average growth rate in the productivity of cardamom in Kerala (7.64) is slightly higher than that of India (7.56). Table 3.8: Productivity of Cardamom (small) in India and Kerala Year Productivity Kg/Hec In India In Kerala 1997-98 109 144 1998-99 135 162 1999-00 174 214 2000-01 195 247 2001-02 210 286 2002-03 218 281 2003-04 210 286 2004-05 206 276 2005-06 227 318 2006-07 208 283 Period Average 189.2 249.7 AAG 7.56 7.64 Source: Spices Statistics, Spices Board. 3.2.4 Export of Cardamom from India and Kerala A major portion of the cardamom produced in Kerala as well as the other parts of India is used for domestic consumption and only a minor portion is exported to other countries. During 2006-07, while the total production of cardamom (small) was 11235 tonnes, the export of cardamom from India was only 650 tonnes i.e only 6 per cent of total production. During the same period, while the production of cardamom (small) in Kerala was 8545 tonnes, the quantity exported from Kerala was only 371 tonnes i.e only 3.4 per cent of production. However, the average share of Kerala in the export of cardamom in India is 26.3 per cent. Again, the average annual growth rate in the export from Kerala is much higher (42.07) compared to India (1.07) (Table 3.9). During 1980 s the share of export of Indian cardamom in the total production was 53 per cent but it dropped drastically to eight per cent during 1990 s and further to five per cent during the year 2002-03. During this span domestic production had a consistent growth reaching 11920 metric tonnes during 2002-03 from 4400 metric tonnes during 1980-81.
76 Table 3.9: Export of Cardamom from India and Kerala (Qty in MT) Year Export from India Export from Kerala % Share of Kerala in total exports 1997-98 370 90.30 24 1998-99 475 86.60 18 1999-00 676 151.50 22 2000-01 1545 119.03 8 2001-02 1031 345.62 34 2002-03 682 198.49 29 2003-04 757 180.62 24 2004-05 650 187.51 29 2005-06 863 154.25 18 2006-07 650 371.47 57 Period Average 770 189 26.3 AAG 1.07 42.07 Source: Spices Statistics, Spices Board 3.2.5 Price Trend of Cardamom in India and Kerala Table 3.10 shows the annual average auction prices of cardamom have been falling to unremunerative levels during the period of study. While, the average auction price was Rs.586.23 per kg during 1998-99, it declined to Rs.215.56 during 2005-06 and to Rs.315.41 during 2006-07. However, the average annual growth rate in the auction prices of cardamom in India and Kerala during the period of study was 6.8 and 6.69 respectively. Table 3.10: Annual Average Auction Prices of Cardamom (small) (Price in Rs/kg) Year Kerala All India 1997-98 283.18 276.44 1998-99 586.23 567.52 1999-2000 488.79 487.42 2000-01 580.05 569.75 2001-02 634.21 622.87 2002-03 563.89 561.26 2003-04 368.62 361.03 2004-05 298.23 291.05 2005-06 215.56 208.70 2006-07 315.41 307.00 Period Average 425.3 433.42 AAG 6.8 6.69 Source: Auction reports from licensed cardamom auctioneers in Kerala, Tamil Nadu and Karnataka.
77 3.2.6 Share of Black Pepper and Cardamom (small) in the Total Export of Major Spices from India During the last three decades, black pepper had been retaining the prime position in the spice exports from India. During 1997-98, black pepper stood first, in the spice exports from the country with a share of 14.83 per cent in quantity and 33.84 per cent in value. But this declined to 7.69 percent in quantity and 8.56 per cent in value during 2006-07. The share of cardamom (both small & large) was only 1.72 per cent in terms of value and only.83 per cent in terms of quantity. Out of this the share of cardamom (small) was only.86 per cent in terms of value and only.15 per cent in terms of quantity during 1996-97; and it changed to.58 per cent in quantity and 1.10 per cent in value during 2006-07. The share of other major spices in terms of value realization were; chillies 11 per cent, Ginger 5 per cent, Turmeric 6 per cent, seed spices 6 per cent, mint oil 7 per cent, spice oils and oleoresins 16 per cent, curry powder 2 per cent, garlic 2 per cent, turmeric 6 per cent, coriander 4 per cent and cumin 6 per cent. Thus, up to 2005-06 black pepper stood first in the spice exports of the country with a share of 36% in value, followed by spice oils & oleoresins 17% and chillies 13%. Export of Spices by major commodity group during 2006-07 compared to 1997-98 and 2002-03 is given in Table 3.11.
78 Table 3.11: Item Wise Export of Major Spices from India (Qty. in MT & Value in Rs. Lakhs) Item 1997-98 2002-03 2006-07 Qty Value Qty Value Qty Value Pepper 35907 49635 21609 17887.98 28750 30620.00 Cardamom (S) 370 1267 682 4707.42 650 2236.00 Cardamom (L) 1648 1264 1450 2057.08 1500 1695.00 Chilli 51779 15890 81022 31514.68 148500 80775.00 Ginger 28268 7263 8461 2396.59 7500 3975.00 Turmeric 28875 8306 32402 10337.99 51500 16480.00 Coriander 23734 6435 18065 5564.64 20500 7462.00 Cumin 16281 8135 10422 9326.33 26000 20150.00 Celery 3317 799 3960 1225.43 3550 1320.50 Fennel 12368 3582 4160 1783.75 3575 2380.00 Fenugreek 6006 987 13193 2551.06 8500 2698.50 Other seeds 1 4056 935 14920 3617.36 8000 2240.00 Garlic 3975 798 1539 698.68 11500 2127.50 Nutmeg & Mace 5 7 1381 2847.36 2100 4273.50 Vanilla - - 25 2225.72 125 1995.50 Other spices 2 14918 5566 23898 7383.12 19500 7280.00 Curry powder 5132 2972 8492 6893.67 9500 8692.50 Mint Products 3 3018 9693 13589 56557.94 16250 110095.00 Oils & Oleoresins 2419 23153 4839 3994.23 6250 51079.00 Total 242076 146687 264107 208671.02 373750 357575.00 Source: DGCI & S., Calcutta/Shipping Bills/ Exporters Returns Notes: 1. Include Bishops Weed (Ajwanseed), Dill seed, Poppy seed, Aniseed, Mustard etc. 2. Include tamarind, Asafoetida, Cinnamon, Cassia, Cambodge, Saffron, Spices (Nes) etc. 3. Include Menthol, Menthol Crystals and Mint oils. The percentage share of individual major spices in the total spice exports from the country during 2006-07, compared to 1997-98 and 2002-03 is given in Table 3.12
79 Table 3.12: Share of Different Items of Spices in the Total Spice Exports from India Item 1997-98 2002-03 2006-07 Qty Value Qty Value Qty Value Mint products 1.25 6.61 5.15 27.10 4.36 30.79 Chilli 21.40 10.83 30.67 15.10 39.73 22.59 Oils and oleoresin 1 15.78 1.83 18.73 1.67 14.28 Black pepper 14.83 33.84 8.18 8.57 7.69 8.56 Curry powder 2.12 2.02 3.22 3.30 2.54 2.43 Turmeric 11.9 5.66 12.27 4.95 13.78 4.61 Cardamom (S).15.86.26 2.25.58 1.10 Cardamom (L).68.86.55.96.40.47 Ginger 11.68 4.95 3.20 1.15 2.01 1.11 Seed spices 1 1.68.63 6.17 3.09 18.76 10.14 Vanilla - - 009 1.06.03.56 Other spices 2 33.31 17.96 28.49 13.74 8.25 3.36 Total 100 100 100 100 100 100 Source: Spices export review 2006-07: Spices Board Notes: 1. Seed spices include nutmeg & mace, bishopsweed, dill seed, poppy seed, aniseed etc. 2. Other spices include tamarind, asafoetida, cumin, cinnamon, cassia, tejpat, kokam, saffron etc. Figure 3.1: Share of Different Items in the Total Spices Exports During 2006-07 (value) 30.79% 1.11% 4.61% 10.14% 0.56% 3.83% 22.59% 2.43% 8.56% 1.10% 14.28% chilli curry pow der pepper cardamom Oils & Oleoresins Other spices vanilla seed spices turmeric ginger mint products
80 Figure 3.2: Share of Different Items in the Total Spices Exports During 2006-07 (quantity) 4.35% 2.01% 13.78% 18.76% 0.03% 1.67% 8.86% 0.58% 7.69% 2.54% 39.73% chilli curry pow der pepper cardamom Oils & Oleoresins Other spices vanilla seed spices turmeric ginger mint products Tables 3.11 and 3.12 and figures 3.1 and 3.2 show that towards the end of 2006-07, the picture of the component share of different spices in the spices export of the country has totally changed. Mint products emerged as the prime item of spice export contributing 31percent of the value, while chilli tops in quantity by sharing 40 percent of the quantity of spices exported from India. In terms of value, the other major items are chilli 23 percent, spice oils and oleoresins 14 percent, pepper 9 percent, cumin 6 percent and turmeric 5 percent.. The share of cardamom (small) in the total spice export of the country is now only 0.58 percent in terms of quantity and 1.10 percent in terms of value. Vanilla the export of which was nil during 1997-98 has emerged as an item of spice export during 2002-03 onwards. Thus, pepper, the king of spices, lost its prime position in the spice exports of the country, both in terms of quantity and value and that position in now occupied by mint products in terms of value and chillies in terms of quantity.
81 Thus, it can be concluded that India occupies a predominant position in the world spices trade. India s contribution to the world spices trade is 44 per cent in quantity and 36 per cent in value. Black pepper, which occupied the prime position in the spice exports from the country with a share of 36 per cent in the total export earnings, lost its position after 2005-06, in terms of both quantity and value. Mint products in terms of value with a share of 30.79 per cent and chillies in terms of quantity with a share of 22.59 per cent now occupy this prime position. Kerala accounts for 93.3 per cent of total area under black pepper cultivation, and 94.2 per cent of production in the country. The area under cultivation of black pepper and production of black pepper in Kerala is on the increase. Kerala s share in the export of black pepper from the country is declining. Productivity of black pepper in India is one of the lowest in the world. In India, Karnataka has the highest productivity, followed by Kerala and Tamil Nadu. India was the principal producer and exporter of cardamom up to the year 1983. After 1983, Guatemala emerged as the dominant producer and exporter of cardamom (small) in the world. India s share in the global export of cardamom now is only 3 per cent. Kerala is the leading cardamom producing state in India with a share of 56.7 per cent of area under cultivation and 74.1 per cent of production. In Kerala, Idukki district accounts for 90 per cent of cardamom production in the state. Productivity of cardamom in Kerala is the highest in the country and it shows an increasing trend. Share of cardamom exports from India in the total cardamom production in the country is declining. The share of the export earnings of spice oils and oleoresins in the total export earnings of the country is significant.