Indian spices sector feels the heat due to fall in prices and lower exports

Spices are not just the part of flavour in every Indian household but also a considerable chunk of the country's food export basket.

However, the prices of spices have been under pressure in recent days as it is trading at multi-month lows on the back of higher output and lower exports.

India is called the land of spices as no other country in the world produces as many varieties as it does. It has the largest domestic market for spices, with 109 varieties listed in the international organisation of standardisation.

The country primarily exports chilli, turmeric, cardamom, coriander, cumin, nutmeg, fenugreek, processed spices, blends and seasonings.

Indian spices exports have been steady over the years in value and volume, registering a 5-7 percent compound average annual growth rate.

During 2017-18, a total of 10,28,060 tonne of spices were exported, registering a volume growth of 8 percent.

The prices and exports in the last couple of months though have been on a decline. The acreage of spices has been on a rise due to higher returns over the past few years. Higher supplies from producing regions and subdued demand from consuming industries such as masala companies and exporters have been weak.

The coriander prices have slid to three-week lows on expectations of improvement in yield on good weather conditions in key growing areas of Rajasthan. Cumin prices are at a 10-month low on weak export demand for the new crop. The turmeric prices are at a 2-month low on concerns over the quality of the crop.

Agriculture commodities due to being cyclical in nature will see pick up by mid-March, especially for many spices. With favourable climate and higher yields, the expectation is that the spices sector will see a spurt in prices but a bullish view is missing for the next few months.