Magazine article International Trade Forum

Spices: Trends on the World Market

Magazine article International Trade Forum

Spices: Trends on the World Market

Article excerpt

International trade in spices is currently estimated to be around 400,000 tons annually, at approximately US$1.5 billion. The total value depends to a large extent on the prevailing price of pepper, which is the leading spice on the world market. This trade has expanded steadily over the past two decades. Spice exports in the 1970-75 period were only slightly more than half the present amount, at 222,000 tons ($300 million) annually. From 1981 to 1985 the yearly average moved up to 350,000 tons ($1 billion). It is expected that import volume will continue to grow even beyond the current level, but the rate will vary from country to country and from one spice to another. Import values may not, however, follow the same upward trend, depending on the price levels of individual spices, and in particular of pepper.

Over the last several years prices of almost all spices, and particularly pepper, have gone down dramatically, primarily because of excess supply. In many cases market prices have been below production costs. This pattern is likely to continue for another two to three years. The result will probably be lower levels of production, which in turn may help to raise prices somewhat over the medium term.

Main markets

The major markets for spices are the United States, Germany, Japan and certain Middle East countries. International sales to these markets have shown a continual upward trend in recent years.

The United States is the world's largest importer of spices. Its foreign purchases in 1991 (including spice herbs, mustard and sesame seeds) came to 242,719 tons, valued at $395 million, compared with 239,960 tons ($385 million) in 1990. The Canadian market for spices is relatively small, importing approximately 12,000 tons annually.

Since 1976 countries in the European Community (EC) have purchased a larger total quantity of spices from foreign sources than the United States, although the latter is still the world's leading individual importing country. In 1991 the EC countries as a group imported 203,483 tons of spices, valued at $423 million. Germany is the principal market in Europe and the second world market after the United States. Germany accounts for over one third of total spice imports into Western Europe. In 1991 these amounted to 63,731 tons, at $137 million. Next in line are France and the United Kingdom, which imported 31,600 tons and 27,100 tons, coming to $68.3 million and $44.4 million, respectively, in 1991. Although the Netherlands is a relatively small market for spices, Rotterdam, along with Hamburg, and, to a lesser extent, London, are the main European spice trading centres. Large quantities are trans-shipped from these points to other European destinations.

Among other European markets, the principal importers are Austria, Sweden, Norway, Finland and Switzerland. Sweden and Finland are major consumers of cardamom.

Countries of eastern Europe are important outlets for certain types of spices. These markets import significant quantities of pepper from India and pimento (allspice) from Jamaica under bilateral agreements. Although the buying pattern of these countries has fluctuated considerably recently, demand for spices over the longer term shows strong potential.

In recent years, markets in the Middle East, in particular Saudi Arabia, have accounted for a substantial and increasing share of the spice trade, in terms of value, largely because of considerable imports of cardamom and pepper. These markets hold a share of over 80% of total world consumption of cardamom. Morocco, Algeria and Libya are large purchasers of pepper, but demand in these three is closely tied to price levels.

In the Asian and Pacific region, the major spice importer is Japan, the third largest market for spices in the world, followed at some distance by Australia and New Zealand. India is the world's largest producer and overall consumer of spices. Although domestic consumption in Singapore and Hong Kong is small, the importance of the former, in particular, in the entrepot trade of spices still remains considerable. …

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