Kerala Spice Monopoly Under Threat

Kerala’s monopoly in manufacturing value-added spice products is under threat. The State, which used to meet about 75 per cent of global demand, is confronting several obstacles, says a Manorama report.


Shortage of raw materials, high production cost and the lack of basic facilities are prompting companies in Kerala to move elsewhere. Meanwhile, processing centres are coming up in countries like Vietnam and China.

Last year India earned Rs 1,911 crore by exporting 11,475 tonnes of spice oils, oleoresins and other products. Kerala contributed a major chunk of the products, boosting the country’s total spice exports past Rs 14,000 crore.

According to the report, what aided ventures in Kerala was the high quality and availability of pepper, ginger, turmeric and nutmeg. The high cost of production and regulations in Europe and the United States had created the opportunity to start more units in Kerala itself. And companies in Kerala reaped gains by making products of international standards with great technical expertise.

Black Pepper
Black Pepper

However, the considerable fall in production of spices in the state in recent times has led to greater reliance on imports. Countries such as Vietnam, Sri Lanka, Cambodia and China have gone far ahead in cultivating spices. Though they do not have the variety of products that India has, they are racing ahead by focusing on a few crops.

“In addition to the shortage of raw materials, stiff competition in the global market is also forcing companies to seek new pastures,” said Synthite Group Managing Director George Paul. It was the quality and availability of Kashmiri chilli that encouraged Synthite Industries to set up a paprika extraction plant in China.


Plant Lipids, another major group, moved to Sri Lanka because of the availability of pepper. It is said that production cost is about 30 per cent less in China. Arjuna Natural Extracts is eyeing opportunities in countries like Indonesia, Vietnam and Cambodia because of the availability of raw materials and low tax rates. Africa too offers plenty of opportunities for cultivation and processing of spices.

World Spice Organization Chairman Philip Kuruvilla, however, sees the positive side, “as wage disparity among countries comes down, the factors that get more consideration are cargo movement and market, and it is a good sign that Malayali entrepreneurs are coming forward courageously to put the possibilities offered by globalization to maximum use.”