As wisdom dawns upon the globe about the amazing array of India’s herbal resources, the international science and medical fraternities (besides just culinary connoisseurs) are waking up to the potential of a product native to India – turmeric. What’s better is the fact that with 80% of the world’s total turmeric being produced in India, this spice has the potential to work wonders for exporters. Actually, we’re talking about Rs.650 crore in exports-a-year already!

Sachin Manawaria | @TheDollarBiz

For over 5,000 years, turmeric has been used throughout India, China and Indonesia as a spice and medicinal agent. But only recently has it started capturing imaginations around the world – as a panacea and a palliative for a wide range of ailments. So much so that it has been granted “Generally Recognised as Safe” (GRAS) status by the USFDA.

The world’s love affair with this colourful agent is also evident from the extensive research being carried out on its medicinal values and extracts. For instance, curcumin, an ingredient found in it, has long been used to prevent many chronic diseases including obesity, type II diabetes and liver diseases. Recent studies show that this dietary supplement possesses potent anti-oxidant, anti-carcinogenic, anti-inflammatory and hypoglycemic properties. In India, turmeric is an omnipresent ingredient in a majority of delicacies. A dash of turmeric is enough to spice up the flavour and play a gastronomic delight. Plus, there is also a curative within.

Dry turmeric curcuma root at a wholesale spice shop at APMC Market in Mumbai. Indian turmeric exports are dominated by dry turmeric, which accounted for over 43% of total exports in FY2014

Although exports are just above the $100 million mark – not significantly high considering its potential – the focus of international attention is slowly shifting to turmeric and its extracts. Going by the growing interest, turmeric trade is all poised for a quantum leap in terms of number of international takers in the near future. And being the only bulk producer of turmeric (India accounts for about 80% of world turmeric production), India holds a near monopoly over its exports. 

If you  step back in time, you will realise that turmeric has been an important ingredient of Indian tradition and wisdom since the Vedic era. Owing to its therapeutic characteristics, it is widely used in Ayurvedic as well as Unani systems of medicine. Spiritually, it represents a gesture of good omen and is widely associated with fertility in India. No religious/spiritual occasion is complete without turmeric in over 80% of Indian homes – such is the importance of this humble yellow spice.

India accounts for about 80% of the world’s total turmeric production

In fact, these medicinal characteristics of turmeric are now gradually being acknowledged across the globe too. This is evident by a 13.4% CAGR reported by exports of turmeric from India in the last five years. Since India is the only major producer, consumer and exporter of turmeric still, future prospects of this Indian spice appear, well... quite spicy. 

As diverse as India
Turmeric is widely grown in the southern peninsular region of India. Andhra Pradesh and Tamil Nadu are the two major turmeric producing states contributing nearly 70% to the total produce, followed by Odisha, West Bengal, Maharashtra, Karnataka and Kerala.

India produces a wide variety of turmeric, each unique in itself for its innate properties and values. The Alleppey Turmeric grown in Kerala is popular for its rich content of curcumin – around 6 to 6.5%. It usually varies from deep yellow to orange yellow in colour. This type of turmeric finger is usually the preferred variety of turmeric exported to USA in an unpolished form.

On the other hand, Madras Turmeric is widely grown in districts like Salem, Erode, Coimbatore, Dharampuri areas of Tamil Nadu. This variety is usually traded in the Erode market, which is one of the biggest trading centers of turmeric in India. These mustard yellow coloured rhizomes – underground root of thick mass – comprise nearly 3-3.5% of curcumin. Madras Turmeric is generally preferred in Europe and UK and is exported in polished and raw form.

Similarly, Andhra Pradesh, the biggest turmeric producing state in India, is known for Nizamabad Turmeric grown in Nizamabad, Guntur, Karimnagar and Kadapa districts of the state. This type of turmeric is pale yellow and the curcumin level is not more than 2%. The Middle East is one of the major markets for this variety of turmeric.

Another variety Rajapuri Turmeric is largely grown in Maharashtra and is marketed through Sangli and Mumbai trading centers. It is slightly superior to the Madras variety with curcumin content of 3.5-4.0%. This type of turmeric is mostly exported to the Japanese market in polished form. Some of the other well know varieties are Duggirala Turmeric grown in Guntur district of Andhra Pradesh, Dehradun local, Daghi and Lakadong produced in the North East region with high curcumin content, and a few other commercially grown varieties like Krishna, Suroma, Rasmi, Suvarna, IISR Prabha and IISR Pratibha.

Surprisingly, the productivity of turmeric in India has been on a decline over the last few years due to a couple of factors. According to estimates of the Spices Board of India, the total area under turmeric cultivation went down to 1,92,916 hectares in FY2013 with an output of 9,73,098 tonnes from 2,37,720 hectares under cultivation with an output of 12,46,220 tonnes in FY2012. Two major cyclones, coupled with unseasonal rains in Andhra Pradesh and surrounding coastal areas during last couple of years, have lowered the yield of turmeric in these belts. But then experts believe it to be a temporary factor affecting business.

The India advantage

India is by far the largest producer, consumer as well as exporter of turmeric (to all major destinations across the globe). Although it is grown in few pockets of China, Pakistan, Bangladesh and Myanmar, India accounts for 70-80% of global turmeric trade. It consumes nearly 80-85% of its own produce and exports less than 10%. In terms of competition, there’s nothing that comes close to Indian turmeric given its high curcumin content, bright colour and aroma.

Spicing up the world

Over the past few years, Indian turmeric exports has shown an encouraging trend. In dollar terms, Indian exports have grown at a CAGR of 10% between FY2009 and 2013, while volume-wise it has surged at a CAGR of 13.5% during the same period. Going by past trends, UAE, Iran, USA, Malaysia and Japan happen to be the top markets for high quality Indian turmeric. Apart from these, UK, France and Germany too are now emerging as new markets.

Turmeric is usually exported in four different forms. Amongst these forms, fresh turmeric is losing sheen as an export commodity. Exports of this variety has fallen by 76% in the past decade.

Oleoresins from turmeric are in high demand globally in the present times. This highly processed liquid of turmeric is of brownish dark-yellow appearance and finds usage in pharmaceutical and food industry all over the world. This is the reason for turmeric oleoresins exports witnessing a CAGR of 24% in the last five years.

Categories of dry turmeric and powder turmeric exports have also grown at a CAGR of 11% and 16% respectively in the past five. The reason for such increase can be attributed to factors like rise in use of turmeric in curry powder and spice mixes globally (due to its therapeutic properties), and a shift away from synthetic colour.

During the ten-year period leading to FY2014, the share of fresh turmeric in overall turmeric exports has come down from over 38.5% to just 2.7%, while that of dry turmeric has increased from a little over 26.1% to 43.6%. Similarly, shares of powder and other varieties of turmeric have also increased from 31.06% and 4.25% to 42.02% and 11.5% respectively.

 

Gold dust. Literally!

Prices of the best grades of turmeric fingers such as Duggirala, Kadapa and Salem are currently hovering between Rs.60-70/kg and are being sold in the Middle East at Rs.90-120/kg. Similarly, premium grades of Alleppey Fingers – with high curcumin content of 5-6% – are currently trading in the Rs.110-120/kg price range in India but is being sold at about $1.65/lb (~Rs.218.25/kg) in USA. Since there are no duties on turmeric imports in USA, profit margins of 25-30% are easily available to Indian exporters post shipping and other administrative costs (see table). 

While large parts of the globe are yet to wake up to turmeric and its therapeutic values, things are headed in the right direction for exporters of this crop. Further, a large expatriate Indian community is only helping raise awareness about this wonder spice globally. With not much existing or expected competition and a gentle cap on production volumes, even a marginal rise in demand will send prices soaring. And rejoice will the hordes of Indian exporters.

This product, as it appears, has a colourful personality, yet is just...turmeric! Now, did you imagine its business worth the last time you saw it on the kitchen shelf? Seriously, it deserves attention!