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    Spices and Culinary Herbs


    © International Trade Centre, International Trade Forum - Issue 3/2001

    The world market for imported spices and culinary herbs is large, valued at just over US$ 2.3 billion. LDCs such as Madagascar, Comoros and the United Republic of Tanzania earn a substantial part of their foreign exchange from spice exports. The main spices exported by LDC countries are vanilla, cloves, chillies, cardamoms, nutmeg and mace. Since 1995, the LDCs have provided over half of the world's imports of vanilla and over one-fifth of the world's demand for cloves. Other major LDC exports are black pepper, paprika, coriander, cumin, cinnamon, ginger, turmeric, etc.

    From 1995 to 1999, annual world imports of spices averaged 500,000 tonnes, growing at an average 8.5% a year. This strong growth rate is a good indicator of the increase in consumption of spices.

    The LDCs have tremendous potential to expand their exports to both developed and developing country markets. These are high-value markets that are growing rapidly and LDCs have the natural resources to compete. They are likely to benefit from the rapid growth of the market, could take market share from their developing country competitors, add to the range of spices and herbs they supply, and increase value addition by preliminary processing.

    But despite growing world imports, LDCs have not performed well in recent years with exports of spices. Over the period from 1995 to 1999, total exports from LDCs decreased by 8.5% in quantity and 4% in value. There were two major reasons: the severe drop in world vanilla prices following an oversupply situation in Indonesia and the bad climatic conditions in several producing countries in Africa in 1998 and 1999.

    Strategies to realize the full potential offered by the export of spices and culinary herbs need to take account of the following five types of opportunity:

    - Diversifying export markets.

    - Diversifying the product range. Products such as coriander, cumin, bay, oregano and thyme offer sizeable and attractive export opportunities.

    - Improving market share and positioning. The key requirements are improving the consistency of quality and timeliness of delivery.

    - Taking advantage of niche opportunities. Although comparatively small at present (a little more than 1% of the total spice demand), the organic segment of the spice market is growing, reinforced by the desire to consume natural, wholesome products that is driving the consumption of spices overall. The trend towards a greater variety of ethnic cuisine offers the prospect of each country developing a niche for spices and admixtures that are used in its own cooking.

    - Processing and packaging. There is a trend for greater processing and packaging of spices in the developing countries. Spice admixtures are also gaining ground in response to the desire for greater convenience.

    The critical success factor: increase the supply capacity and competitive

    ness of LDCs and help them exploit their enhanced capabilities in international markets through information, access to inputs, support services, utilities and infrastructure.

    Under present market conditions, LDC exporters could concentrate on supplying large processors and packers with whole spices of high quality. They could attempt to supply in bulk high-quality ground spices to large, industrial users, who are more likely to be willing to import directly from source and to use more than one supplier. In the longer run, the aim should be to attract investment by processors with the market knowledge and distribution capabilities in the consuming countries. Smaller processors and traders may look for alliances and joint ventures with processors in producing countries.

    For more information, see ITC's weekly Market News Service bulletin on Spices, Spice Herbs and Seeds (abstract and subscription information are available on page 37). For technical assistance from ITC, contact Antony Sandana, ITC Senior Commodity Officer, at sandana@intracen.org

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