THE SUMMARY OF PAPERS PRESENTED

The Business Ses sions of the second World Spice Congress commenced at 11.00 a.m. on 6 November, 1992.

Mr. T. Nandakumar IAS, Chairman, Spices Board of India opened the Business Session.

Text of his Opening Address follows:

I would like to take you back to the first World Spice Congress held at Bangalore in 1990, which attempted to identify the issues of common concern, They were: 'quality', 'availability' and 'freedom to operate'. Mention was made of indifferent quality and lack of dependable quality assurance system, inadequate availability of exportable varieties leading to inconsistency in delivery and over regulation leading to avoidable delays. These issues were taken up in right earnest by the Spices Board and the Ministry of Commerce, Government of India. Today, things have changed; there could be views on whether the changes are adequate or not. But there is a definite commitment to change. And change did take place with growth.

In the area of quality, we have moved from suspicion and inspection to a regime of 'trust and assurance'. The compulsory inspection by the Government agencies has been replaced by inspection based on importers' requirements. The importer can now specify in his contract the type of inspection he desires. He is also free to waive this condition.

'Trust and assurance' come from good manufacturing practices and dependable detection system. We have well equipped laboratories both in Government agencies and in private units than ever before. Assurance also comes from the farmers' ability to produce clean spices. The campaign to educate farmers has been intensified and the results are encouraging. We hope that this regime of trust and assurance would lead to increasing, 'self certification'. The Indian industry has a major task ahead in living up to the expectations of the Government and those of the importers.

'Availability' has been a more difficult question. You just beard from the Hon. Minister that the VIII Five Year Plan 1992-1997 will witness an almost ten-fold increase in investments in spices production. The programmes would aim at increase in productivity of exportable varieties and raw materials for our oleoresin and curry powder industries.

It has been said that the strength of the Indian domestic market which provides stability to our farmers is also responsible at times for the shortages in exportable surpluses. Apart from efforts in research and development and transfer of technology, and focussing attention on exportable varieties, the Government has already announced the setting up of horticulture export oriented units and agri business consortium. The horticulture E0Us would produce exclusively for exports thereby delinking export production from domestic markets. The agri business consortia are expected to provide the much desired linkage between the exporters, processors and farmers.

India's recent efforts in liberalisation and dismantling of controls have been widely acclaimed all over the world. To the spice industry, it would mean automatic approvals for foreign equity participation in joint sector companies and export oriented units; facility for global sourcing of raw materials for processing and re-export; liberalised import of capital goods and laboratory equipment, and most important, an economic environment which encourages the export led growth.

All these measures referred to above involve foreign exchange and the Government has done this at a time when the country is facing a foreign exchange crisis. The commitment is therefore very firm and unambiguous.

Looking at the global opportunities in the spices industry, my perception is that the spices is moving away from 'trade' and moving towards 'industry'. Successful companies all over the world have realised this change and started investing in cleaning, processing and adding value to spices. The challenge before the spice industry today is the ever increasing consumer expectations in terms of product quality. This demand arises from the concerns of the consumers for health and environment. Many Governments have responded to this aspect by legislations to protect consumer interests. Consumer preferences may, however, remain much above these regulations. This challenge provides an opportunity to the spice industry; opportunity because of adequate surpluses, a wide range of spices and the biodiversity to produce more spices, To encash this opportunity, we need technical manpower and strong capabilities for technology adoption.

India has been endowed with an environment conducive to large scale production. We have built up a vast resource of technical manpower over the last 40 years, Freedom to invest, the catalyst, is now available. As the Chief Executive of an organisation, which represents Government of India, the spice exporters and the farmers, I have a dream; a dream that redefines the relationships between importers, exporters and farmers, Today, the relationships are determined by price competitiveness. The consumer is demanding a consistent quality product delivered regularly. My dream is to move towards a 'WIN-WIN' situation, with the farmer, exporter and importer or the partners in a healthy, friendly environment.

Thank you,

SUMMARY OF PRESENTATION & CONCLUSION

CHAIRMAN : Mr. R.T. Griffiths
Chief, Office for Asia & the Pacific
International Trade Centre
UNCTAD/GATT
Geneva

Speakers Mr. Peter Furth
Executive Vice President
The American Spice Trade Association.
USA.

(Paper presented by):
Mr. David Solomon
Director of Purchasing
Botanicals International, USA
who represented ASTA in the Congress.

Mr. Arnold Manheimer
Executive Vice President
J. Manheimer Inc. USA

Mr. Randall B Jensen
Vice President & General Manager
McCormick & Co. USA

(Paper presented by):
Mr. Albert F Goetze
Vice President
McCormick & Co. USA

Mr. Lcopoldo Cruz R
Managing Director
Laboratories Bioquimex, Mexico

Mr. J.V. Mariwala
Partner
Kanmoor Foods Ltd. Bombay. India

Mr. M.K.K. Menon
Managing Director
Harmony Spices Ltd. Cochin. India

 

SESSION 1 "THE AMERICAS"
11.30 a.m. on Friday, 6 November, 1992

Chairman of the Session, Mr.R.T. Griffiths, in his introductory remark highlighted the various measures taken by the Spices Board of India, especially towards achieving excellence in quality of spices exported from India. International Trade Centre, Geneva has been in association with India since 1976 on spices development and it has been working on a large scale project with Spices Board since 1986 financed by the Government of Sweden, The main objective of this project is to develop export of cardamom, spice oils and oleoresins mainly from Kerala, Tamil Nadu, Karnataka and ginger and ginger products from North Eastern States of India. The project also involves activities connected with market development, market research in about 11developed countries of the world and also markets in Latin America and Eastern Europe. It also provided equipments costing USD 80,000 to the Quality Evaluation and up gradation Laboratory of the Spices Board. At the moment, this organisation is working with the Board on design of the new projects that would be financed by the UNDP, which will start early next year. The main emphasis under this project will be to enhance the capabilities of the Spices Board, Indian Spice Exporters and farmers to meet quality requirements of international markets. In addition to the fullfledged quality laboratory at Cochin, a regional laboratory will be opened in Bombay. These laboratories can certify the quality of the Indian spices exported. The project also takes care of the quality consciousness on the part of the Indian spice farmers, he said.

Mr. Peter Furth in his paper (presented on his behalf by Mr. David Solomon) on "World Factors and Need for Co-operation, Collaboration Credibility" elicited the change happening world around, bringing the world to one market place smaller and more interdependent.

The Consumers throughout the world continued to place increasing demands, directly and through their Governments on the food industry to supply safe, healthy and clean food products at all times. Governments throughout the world have continued to place restrictions on spice trade especially in areas of pesticides, sterilants, labelling, sanitation and tariffs.

ASTA has agreed for a closer cooperation and improved communications between organisations such as The Spices Board, The international ,General Produce Association, The European Spice Association and The Canadian Spice Association.

ASTA is becoming capable of addressing the regulatory roles of the legislative, executive and judicial branches of American Government and can put mechanisms to persuade the congress and the executive branch to support the interests of the spice industry consistent with the public interest.

The Food and Drug Administration and the Environment Oil Protection Agency of United States consider ASTA as the authoritative and credible source of information, assistance and solutions to issues involving spices.

Among the major changes in recent time are: creation of a unified set of macroscopic standard, which is as restrictive as the FDA's defect action level. The other is the adoption of commodity tracking programme.

ASTA has instituted a lab accreditation programme with an annual auditing system.

The quality assurance committee of ASTA has developed a clean spice manual and is currently working to design hazard analysis critical control point mainly intended to prevent, detect and control salmonella in pepper.

ASTA is presently working on pesticide screening management programme wherein they have incorporated a pesticide educational programme apart from constituting pesticide advisory task force.

On the use of Ethylene Oxide (ETO), ASTA still believes in its safety and effectiveness when used in spices.

ASTA look upon the proposal of creating its International Spice Research Institute for long-range benefits both for producers and consumers of spices.

ASTA stand ready to cooperate, collaborate and share any and all information and ideas for the benefit of the spice industry world wide,

Mr. Arnold L. Manheimer speaking on the spice oleoresin market touched upon the following points in his presentation.

The advent of a large industrial and food service sector has created the need for spice extractives. The United States has suspended the Generalised System of Preference benefits on Indian oleoresins. Six per cent duty now in effect on account of this has put India at a competitive disadvantage.

Oleoresin producers are increasing capacity without realising their relative position in the World Market. Unless strategically positioned, this will further erode returns to existing units.

Oleoresin manufacturers without well known technically competent partners in consuming countries will not succeed. There is likely to be a greater focus by World Regulatory Agencies on contamination to foods including spices from chemicals such as herbicides, pesticides and insecticides.

Spice growing countries should utilise only those aids that are acceptable in the country of intended use of spices.

Spiced and seasoned foods represent one of the fastest growing segments.

Oleoresins and spice essential oils will continue to be the most natural building blocks to which food manufacturers will look, to find solutions for developing flavour systems.

Natural colour components are expected to have increased consumption and growing demand.

Producing countries to do significant amount of Research and Development on new products for use in flavour and fragrance industry.

Indian government should consider development of environmentally friendly pesticides.

The highlights in the paper by Mr. Randall B. Jansen (presented by Mr. Albert F. Goetze) were the following:

Most powerful trends in the United States and Europe are consolidation in the food industry, growing consumerism, changes in regulatory environment, slowing of economic growth, deflation and emergence of total quality management.

In the United States the term "Pesticide" has become synonymous with poison. Even though some of the pesticides are proven to be extremely safe and useful in improving cost and quality of food.

Irradiation for the sterilization of spices is considered to be the safest and most effective process for eliminating pathogens and reducing total microbial contamination. But some special interest groups work against this.

Suppliers will be required to introduce total quality management in the units to satisfy consumers' expectations on quality.

it will be necessary for the suppliers to demonstrate the willingness and ability to improve processing systems and to meet expectations consistently.

EPA and FDA are going to be stricter on enforcement of the regulations. This could result in a high percentage of detention or even a block listing. India which has both high residue levels and high frequency of residues of any spice should move quickly to overcome the situation, Since it is absolutely essential to meet consumer and regular requirements India have to move back down their supply chain to control and improve, the quality.

Mr. Leopoldo Cruz R. presented chillies and capsicum oleoresin as a source of pigmentation in the poultry. In his address he presented some of the opportunities for India. According to him they regard India as particularly suitable major source of raw material namely capsicum oleoresin for its good quality, high colour, low heat. India has cheap labour and good extraction facilities also. These factors ensure a very promising future for India.

Mr. J.V. Mariwala made a presentation on India's spice trade with America.

He highlighted the efforts taken by India to consolidate its position by investing in R&D and Market development. He suggested that in the future trading, the base of the business contracts should be widened to enable the exporters for getting a larger share in the U. S. markets by covering buyers for longer periods, He also emphasised the need for developing new products, new clients and new markets in order to attain higher level of exports.

Mr. M.K.K, Menon dealt with the approach one should follow for the American market. He mentioned that India has necessary infrastructure to support development and some of the best brains in the field of Science and Technology to provide necessary inputs. In the coming years in order to ensure total quality one could find that a number of companies in India will be qualifying for ISO 9000 standards. Referring to ASTA's programme for the control of "Salmonella" in pepper and their intention to reach out to the supplying countries with more information and educative programmes he suggested that a similar kind of programme could be taken up for pesticide also. He also touched upon the structure of world trading systems, which are being altered significantly by numerous new factors.

The discussions that followed brought out the following additional points:

a) The issue of accreditation of overseas laboratories was discussed in ASTA sometime back. It is now the time to work with overseas laboratories looking at the internal market in USA. In the long run, the market will be benefited,

b) USFDA has also done some work on the possibility of appointing agencies to check and approve products exported from different countries. FDA has already accredited Export Inspection Agency of India to certify black pepper. This accreditation may be extended to other spices also.

c) USFDA may consider having its own office in India, which could certify the products prior to shipment or approve an agency in India whose certification is acceptable to FDA so that the rejection of exported products can be avoided.

d) Indian exporters should ensure that the spices they export to USA conform strictly to quality standards of USFDA.

c) ASTA has gone through a programme for matching all its specifications with FDA specifications. In some cases there are still differences, At least on a macro analysis basis, the specifications should be one and the same.

f) As regards ETO and Methyl Bromide, use of these items is under threat in most of the developed countries. ASTA has a tracking programme on the status of methyl bromide as a post harvest fumigant. ASTA is trying to retain ethylene oxide as a sterilising agent and has a programme to spend 2 million dollars on ETO clearance for the next five years.

g) There are some orders issued by the US Environmental Protection Agency on the herbicides/insecticides that are not to be used in spices growing and also on organophosphorus pesticides. These orders are liberally interpreted. It is necessary to rethink on this, in such away that the risk can be minimised.

h) In the spice oleoresin extraction if those residues, and chemicals are resistant in solvents, the residual level can he much higher than actually in the raw spices. It is in this context, necessity arises to set up some standards on these things. The US trade has taken up seriously the above issues. It is necessary for producing countries to adopt processing techniques, which can minimise, if not eliminate the residual problems.

SESSION II

"ASIA, AFRICA AND AUSTRALIA"

SUMMARY AND CONCLUSIONS

Mr. Ian Hemphill speaking on the Australian market and opportunities for spices in India highlighted the following:

The size of the present Australian market for spices is in excess of 5000 tonnes valued at A$ 15 million. It is identified that there is an annual growth rate of 3% for this market.

Reliability of supply, quality and price determine the source of supply.

The ethnic food habits especially Asian and Indian are catching up fast and this opens up more opportunities for Indian spice exports.

The import regime in Australia is more concerned about public health and is governed by the Australian Quarantine Inspection Service Regulations.

2,30 p.m. Friday 6 November 1992

CHAIRMAN : Mr.Fazli A Husain
Senior Commodity Marketing Officer
International Trade Centre
UNCTAD/GATT. GENEVA
Speakers Mr., Ian Hemphill
Market Manager
Master Foods of Australia
Australia
 

Mr. Abdullah Ali Binmahfooz
Managing Director
Salch Abdullah Binmahfooz
Trng. Est.
Saudi Arabia
(Paper presented by):
 

Mr. Omar Babaker
General Manager
Saleh A Babaker Sons Co.
Saudi Arabia
 

Mr. Terry Baker
Empire Foods Limited
Wellington. New Zealand.
 

Mr. T.Vidyasagar
Partner
South India Produce Co.
Cochin. India.
 

Mr. Ram Kumar Menon
Senior Manager
Tata Tea Ltd.
Cochin. India.

Ethylene oxide is acceptable as a sterilisation material in the Australian markets whereas irradiation is facing resistance from various consumer groups.

 

The paper of Mr. Abdullah Ali Bin Mahfooz on Saudi Arabian markets for spices was presented by Mr.Omar Babakar. His presentation highlighted the following:

Around 32000 MT of spices are being imported on an average per annum, to Saudi Arabia. India is a major spice exporter to that country.

The consumer behaviour is gradually changing in Saudi Arabia. Once considered as the consumer of best quality spices, it has now become more price conscious.

Stable distribution channel is another area to be looked into for a consistent growth of Indian exports to Saudi Arabia.

Mr. Ram Kumar Menon assessed the potential of markets in Japan, New Zealand, Hong Kong, Singapore, Bangladesh and Sri Lanka. It is identified that Japanese markets are importing spice oils and oleoresins from other countries, which is of Indian origin. One area of concern is the ' sweat damage' experienced to spices being shipped in containers. This warrants for a review of the mode of packing of spices. He cautioned that frequent changes in quality specifications adopted by major importing countries would create confusion in the market.

Mr. Vidya Sagar explained India's view of spice market in West Asian and North African Region, In his assessment, there is a gradual decline in import of spices from India to this region. A recent trend for reconciling quality for price is a disturbing phenomenon. The change towards new consumer buying habits and the consumers' lack of awareness on India's ability to cope up with new requirements is the main obstacle to India being a major force in the retail market.

Mr.Terry Baker from New Zealand in a short intervention in the discussion followed, spoke on the change in the food habits in New Zealand. The change is from the conventional food habits to Thai, Indian and Chinese. He was also hopeful on developing spice market in New Zealand because of its healthy economy. The retail market in New Zealand grows at about 7.9%.
The discussions that followed brought out the following points:

a) In Australia, there is basically a uniform food act that covers the whole country. Only pharmaceutical and herbal medicines have different sets of law,

h) The per capita consumption of spices in Australia is about 500 gms. which is half of that of United States.

c) A realistic estimate of projected potential rate of consumption of spices is not available. However, use of herbs and spices are increasing in processed foods and fast foods. This is expected to present a steady growth rate in consumption of spices.

d) As regards quality c standards particularly 2 microbial and biochemical contamination, the regulations likely to be imposed by USA is expected to apply for Australia also.

e) Australia does not t have established set of s quality standards like ASTA. Most of the standards in Australia are based on set of specifications made by major importers.

0 In the present context, India has to market its lower grades of cardamom at competitive prices to retain its Saudi Arabian market share.

g) Japanese market is slowly opening up for Indian spices. They are buyers for quality spices and prices alone does not determine the buying decisions. Japanese have developed curry to suit their taste. For its preparation they source raw material from all over the world, which include India also. The production of Japanese curry has crossed 5000 tonnes. Indian restaurants are getting more and more popular in Japan. Once Indian exporters can meet the Japanese quality standards there s very good potential o export spices and spice products from India.

h) Pacific countries like Philippines, Korea, Thailand and New Zealand are emerging as new economic strongholds in this region. The lifestyle is fast changing. It is expected to create a new market niche in this region for Indian spices. Demand and quality standards have to be created in these markets and India should take a lead role in this.

SESSION III
EUROPE

At 10.00 a.m. on Saturday 7 November, 1992

CHAIRMAN Mr. A.G. Barve
Director
Export Market Development
Division
Commonwealth Secretariat
London.

Speakers Mr. Uwe Paap
Uwe Paap Verlag
(Hot Spice Newsletter)
Germany.

Mr. R.T. Griffiths
Chief
Office for Asia & the Pacific
I International Trade Centre
UNCTAD/GATT Geneva.

Mr. Fazli A Husain
Senior Commodity Marketing
Officer
International Trade Centre
UNCTAD/GATT. Geneva.

Mr. George Eaton
Marketing Manager
Bush Boake Allen Ltd
London

Mr. Freddie Cripps
Chairman
Universe Foods Ltd U.K.

Mr. George Paul
Director
Synthite Industrial Chemicals Ltd.
Cochin. India.

Mr. Eapen George
Chief Executive
A.V. Thomas & Co.
Cochin. India.

Introductory speech of the Chairman of the Session

It has been quite good that the subject has appropriately been chosen as the 'GLOBAL OPPORTUNITIES OF THE 90'S' for this Congress. There should be far reaching changes in the international economic scenario in the last 2-3 years, viz., disappearance of Soviet Union, the market orientation of the Soviet and the East European economics, the ongoing Uruguay round of the negotiations and the results of the elections taking place in the USA, the growth of the Far Eastern countries, the tiger countries which would also create some additional stimulus as far as the demand is concerned. As one looks at the North American scenario, the on-going NAFTA Agreements might be in place creating one of the largest market in the American peninsula but more particularly as far as this issue is concerned, we see Europe slowly moving market, even though it has some problems in other areas. I think the market will definitely be there and Europe 1992 will be a single European market with approximately 20 million people which will be as big as USA and Japan combined and should present great market opportunities though there might be some problems.

Again, Japan with international pressure, is bound to open its markets and spend a little more money in the developing world under pressure from other developed countries and this might again create certain amount of demand. So this is really the international scenario.

As far as the single European market is concerned, whereas it will have a trade creating effect, it will also have trade diversion effect naturally as the market has its internal barriers disappearing; one would find that there will be certain amount of trade diversion. On the whole I see that there will be an increase in demand but when one looks at single European market as one entity or as whole entity, 1 think it will far exceed the size of the US. Of course, how the spice producers and exporters create demand that led to the Europeans to be spicier will also be necessary because if we are able to meet this demand, the market will be able to take more. One is hoping that the Uruguay round will have a beneficial effect but you are all aware that various bilateral trade negotiating rounds have had beneficial effects on their import duties on ungrounded and processed spices which will reduce from 7.6% to 3.9% and on ground and processed spices from 11.7% to 5.1%. This makes us still higher than the rates in the US and Japan but at least they progress towards the elimination of some of these very obvious fiscal barriers.

Spices contribute substantially not only to rural incomes and incomes in developing countries but a lot of women are also employed in the production of spices. It is essential in the modern era where the governments are at the moment quite concerned about the role of the women or rather to ensure that the women have not only a secondary status in the production, marketing and other activities. It is very heartening to see that in the spice sector, so many women are involved. So this is one important aspect of the spice trade internationally and mind that these women are in the developing world. Of course, the women in the developed world have significant role to play and they are continuously fighting for their rights. But the women in the developing world are unable to fight for their rights. When the productive process in a developing economy creates certain opportunities for women, this is something significant to be encouraged.

When we think of spices contributing very significantly to the development of many developing countries, for instance Greneda in the Caribbean, 60% of the merchandising income from exports comes from export of nutmeg and mace. Almost 55% of the spice production originates in the Commonwealth countries. People like us working in the Commonwealth Secretariat look upon spices as a very important item from the Common wealth countries. This is one of the principal reasons why we have joined hands with our colleagues from International Trade Centre, UNCTAD/GATT, Geneva to set up the International Spices Group (ISG) which we hope, if it is declared as a commodity body of the common fund for commodities, might be very beneficial to the developing countries because we might then be able to, as you know, obtain a certain amount of assistance for certain projects. At the last meeting in Jamaica, where it was resolved that we should apply to the international common fund for commodities to join the ISG, we did set up a small group which included Mr. T. Nandakumar from India and several other people so that we could submit some project ideas for funding basically to the common fund for commodities. The two projects that we thought of and which has some prominent positions were: (1) programme of quality assurance for spices and (2) the generic consumption of spices in Europe, You will see that while this move towards the joining the CFK is on, one is already thinking in terms of Europe 1992. We do hope that in the coming years with the whole concept of liberalisation proceeding, we will be able to see the restrictive effects on no tariff barriers such as relating to quality standards, labelling, packaging, health, sanitary and phyto-sanitary regulations, disappearing not only on account of the developed countries as that of lowering their standards in any of these areas but on the other hand because the producers themselves will have become quality conscious and would be supplying spices of a certain quality to the buyers in the developed countries. So one hopes that in the developing world, we will be able to get a fair share of the markets of the right, developed countries and one hopes that such a share of the market will boost not only the production but also the processing of this particular commodity in the developing countries.

Mr. Uwe Paap Verlag presented on spice marketing consumer countries on the example of Germany. In his presentation he outlined the success stories of different fast food companies in Germany in the retail sector. He emphasised the need for diversifying the end product range to captivate new markets share. He also suggested that such retail-marketing programme should be adequately supported with publicity and promotion. This would naturally increase the consumption of spices.

Mr. R.T. Griffiths and Fazli k. Hussain spoke on the growing market for spices is, Europe.

The changing economic situations in East European countries are expected to increase demand for spices and the future offers great potential.

Rotterdam along with Hamburg and London have been identified as principal European trading centres for spices and also as major transhipment ports.

85% to 90% of the spices imported into Europe is in the whole form. The balance is contributed by spice oils and oleoresins, and ground spices. The recent trend is increase in import of processed spice in bulk. Among the spices, pepper occupies the principal position followed by capsicum. There is also a market for culinary herbs.

In West Europe industrial and food service sectors absorbs 50 to 60% of the spices imported, 30 to 35% by retail sector and the balance 10% by institutional sector.

The import of spices into European countries are duty free but processed spices attracts reduced rates of Duty.

The concern for quality is very high in European markets. Most of them are alert on the use of ETO as fumigant, irradiation for sterilisation and on microbiological contamination.

A new legislation is being introduced which imposes a responsibility for checking points on quality.

The general outlook is that by improving quality, adopting competitive prices and establishing joint ventures can help Indian spices get a bigger share in European market,

Mr. George J. Eaton gave a European perspective on the Indian Spice Trade. Spices add value to food products in the West. New end uses become possible with the various flavour profiles which were once used in traditional recipes.

It is expected that there will be a constant increase in the UK house hold expenditure of food. This growth is against the odds of highly competitive food retail market and constraints on volume demand by limited population growth. The expected value growth during 1991-96 period in real terms is 10% which is mainly due to the move to value added products.

With his five level model, he explained how India Spice Industry has covered the evolutionary levels of localised exploitation and internal integration. it has also crossed the 3rd level viz. Business process Redesign and is passing through the 4th level viz. Business Network Redesign. These two levels are revolutionary levels. The ultimate level is Business Scope Redefinition where in the organisation have to move outside the traditional scope of business. This movement will be necessary to sustain and increase the business.

At the level - 5 stage, there be demand for quality standards and legislative requirements of Europe and North America by the rest of the world especially Asian and Pacific regions.

The European food industry's concerns during 1992 are the UK Food Safety Act, EC Flavouring Directive, Aflatoxin/pesticides, UK Tin in Food Regulations, Packaging, Processing Aids/Additives, Nutrition Labelling, Micro Biological issues, and Mineral Oil Contamination.

It is visualised that India will be having closer linkages with other regional associations due to liberalisation of trade, strategic trade alliances and influence of multi nationals. There will be proactive response to consumer and regulatory demands which can help to develop new Asia Pacific markets.

The future demands a World Spice and Seasoning Association wherein ASTA, ESA, ISG, IGPA, Spices Board, All India Spices Exporters' Forum etc. will be active partners.

Mr. Freddie Cripps in his analysis of growth in ethnic foods in United Kingdom established that Indian foods occupy nearly half of the 300 million market. Over a period of 4 years the growth of Indian foods registered 96% increase. He also made an impressive analysis of the source countries of major spices imported to the UK. According to him Indian foods occupy nearly half the market with Chinese and Mexican food at 30 and 9%, respectively.

During 1991 Indian food represents 141 million pounds, which is 47% of the total. This was only 72 million pounds during 1988 showing a growth of 96%.

The total market size during 1988 was only 140 million pounds, which has now (1991) grown to 300 million pounds representing 114% growth.

The ethnic population during 1988 was 2.5 million, which is 5% of the total population. During 1991 it has grown to 6%.

The increased change in food habits especially towards creating dishes in the home from the raw ingredients rather buying ready to eat meals, illustrates the import of half a dozen basic ingredients into the UK.

The recession also benefit the market with consumers eating more ethnic foods in home.

It is forecasted that the ethnic food market will go to a level of 430 million pounds by 1995, an increase of 43%. This gives great opportunity for manufacturers and processors alike.

Mr., George Paul presenting on the Indian oleoresin industry, briefly described the performance of spice oils and oleoresins, He brought out the issues faced by Indian industry like chlorinated solvents which is now banned in Europe, position of paprika oleoresin market and the unreliable supply position of raw materials for extraction industry. He also cautioned the emergence of new units with additional capacities in the extraction field. To meet the new opportunities, India has to invoke expertise and develop flavour systems, than remaining as a mere supplier of oleoresins. He stressed the need for backward integration to agriculture for having the right commodity for the extraction industry.

Mr.Eapen George felt that the unified Europe is as strong and buoyant as the American market. The diverse range of new technology for micro monitoring of biochemical and microbial contamination has reached such a level that new concerns have emerged among consumers and these concerns have political support across Europe and USA. He also wanted Indian exporters to understand this situation and act upon it.

The discussions brought out the following points:

a) The recent political and economic restructuring of East European countries demands for a new approach for marketing Indian spices in this region. One of the suggestion is to put up principal trading centres for commodity exports in Rotterdam and Hamburg. This is to service domestic retailers in the upcountry market in Europe.

b) There is a growing concern among European buyers about quality of spices. It is reported that health standards are likely to be more stringent than that is prescribed by USFDA, The impending unification of Europe is trying to put out fresh norms on this. The European Spice Trade Association contract standards on specification on spices and herbs is a precursor to this. It is suggested to have a database on pesticides/pesticide residue level on spices. This data base information has to be exchanged between the producing and consuming countries.

c) There is lot of concern on fumigants which are now being used, ETO is now a banned chemical in Europe. But alternative fumigants like fastoxin, fomiligate etc. is available for use.

d) In the flavour industry there is an assessment mechanism of consumption ratio and this is related to the food consumption. Such a ratio assessment should be set for contaminants in spices also.

c) Producing countries should ensure good manufacturing practices, which can minimise pesticides and herbicides.

f) European Spice Trade Association is working on pesticide levels and its side effects in collaboration with ASTA. The Indian exporters and other agencies could also be involved in this programme.

g) It is necessary to undertake lot of promotional work to teach the end uses or the intermediate uses on how to use the spice oils and oleoresins in order to develop awareness and market in East European countries.

h) After the unification of Germany the investments in the Eastern part of Germany has increased and in the next few years the demand for different products including spices is expected to increase from this region.

i) International Trade Centre, Geneva is requested to put in more efforts on areas like standardisation of quality, pesticide residue analysis, and generation of database etc. ITC should also work towards standardisation of detection levels and identification of new and potential markets.

k) While there should be a pesticide database and detection system, it is also necessary to monitor the operations of pesticide manufacturers in spice consuming countries who export pesticides to producing countries.

THE SUMMARY OF PAPERS PRESENTED

The Business Ses sions of the second World Spice Congress commenced at 11.00 a.m. on 6 November, 1992.

Mr. T. Nandakumar IAS, Chairman, Spices Board of India opened the Business Session.

Text of his Opening Address follows:

I would like to take you back to the first World Spice Congress held at Bangalore in 1990, which attempted to identify the issues of common concern, They were: 'quality', 'availability' and 'freedom to operate'. Mention was made of indifferent quality and lack of dependable quality assurance system, inadequate availability of exportable varieties leading to inconsistency in delivery and over regulation leading to avoidable delays. These issues were taken up in right earnest by the Spices Board and the Ministry of Commerce, Government of India. Today, things have changed; there could be views on whether the changes are adequate or not. But there is a definite commitment to change. And change did take place with growth.

In the area of quality, we have moved from suspicion and inspection to a regime of 'trust and assurance'. The compulsory inspection by the Government agencies has been replaced by inspection based on importers' requirements. The importer can now specify in his contract the type of inspection he desires. He is also free to waive this condition.

'Trust and assurance' come from good manufacturing practices and dependable detection system. We have well equipped laboratories both in Government agencies and in private units than ever before. Assurance also comes from the farmers' ability to produce clean spices. The campaign to educate farmers has been intensified and the results are encouraging. We hope that this regime of trust and assurance would lead to increasing, 'self certification'. The Indian industry has a major task ahead in living up to the expectations of the Government and those of the importers.

'Availability' has been a more difficult question. You just beard from the Hon. Minister that the VIII Five Year Plan 1992-1997 will witness an almost ten-fold increase in investments in spices production. The programmes would aim at increase in productivity of exportable varieties and raw materials for our oleoresin and curry powder industries.

It has been said that the strength of the Indian domestic market which provides stability to our farmers is also responsible at times for the shortages in exportable surpluses. Apart from efforts in research and development and transfer of technology, and focussing attention on exportable varieties, the Government has already announced the setting up of horticulture export oriented units and agri business consortium. The horticulture E0Us would produce exclusively for exports thereby delinking export production from domestic markets. The agri business consortia are expected to provide the much desired linkage between the exporters, processors and farmers.

India's recent efforts in liberalisation and dismantling of controls have been widely acclaimed all over the world. To the spice industry, it would mean automatic approvals for foreign equity participation in joint sector companies and export oriented units; facility for global sourcing of raw materials for processing and re-export; liberalised import of capital goods and laboratory equipment, and most important, an economic environment which encourages the export led growth.

All these measures referred to above involve foreign exchange and the Government has done this at a time when the country is facing a foreign exchange crisis. The commitment is therefore very firm and unambiguous.

Looking at the global opportunities in the spices industry, my perception is that the spices is moving away from 'trade' and moving towards 'industry'. Successful companies all over the world have realised this change and started investing in cleaning, processing and adding value to spices. The challenge before the spice industry today is the ever increasing consumer expectations in terms of product quality. This demand arises from the concerns of the consumers for health and environment. Many Governments have responded to this aspect by legislations to protect consumer interests. Consumer preferences may, however, remain much above these regulations. This challenge provides an opportunity to the spice industry; opportunity because of adequate surpluses, a wide range of spices and the biodiversity to produce more spices, To encash this opportunity, we need technical manpower and strong capabilities for technology adoption.

India has been endowed with an environment conducive to large scale production. We have built up a vast resource of technical manpower over the last 40 years, Freedom to invest, the catalyst, is now available. As the Chief Executive of an organisation, which represents Government of India, the spice exporters and the farmers, I have a dream; a dream that redefines the relationships between importers, exporters and farmers, Today, the relationships are determined by price competitiveness. The consumer is demanding a consistent quality product delivered regularly. My dream is to move towards a 'WIN-WIN' situation, with the farmer, exporter and importer or the partners in a healthy, friendly environment.

Thank you,

SUMMARY OF PRESENTATION & CONCLUSION

CHAIRMAN : Mr. R.T. Griffiths
Chief, Office for Asia & the Pacific
International Trade Centre
UNCTAD/GATT
Geneva

Speakers Mr. Peter Furth
Executive Vice President
The American Spice Trade Association.
USA.

(Paper presented by):
Mr. David Solomon
Director of Purchasing
Botanicals International, USA
who represented ASTA in the Congress.

Mr. Arnold Manheimer
Executive Vice President
J. Manheimer Inc. USA

Mr. Randall B Jensen
Vice President & General Manager
McCormick & Co. USA

(Paper presented by):
Mr. Albert F Goetze
Vice President
McCormick & Co. USA

Mr. Lcopoldo Cruz R
Managing Director
Laboratories Bioquimex, Mexico

Mr. J.V. Mariwala
Partner
Kanmoor Foods Ltd. Bombay. India

Mr. M.K.K. Menon
Managing Director
Harmony Spices Ltd. Cochin. India

 

SESSION 1 "THE AMERICAS"
11.30 a.m. on Friday, 6 November, 1992

Chairman of the Session, Mr.R.T. Griffiths, in his introductory remark highlighted the various measures taken by the Spices Board of India, especially towards achieving excellence in quality of spices exported from India. International Trade Centre, Geneva has been in association with India since 1976 on spices development and it has been working on a large scale project with Spices Board since 1986 financed by the Government of Sweden, The main objective of this project is to develop export of cardamom, spice oils and oleoresins mainly from Kerala, Tamil Nadu, Karnataka and ginger and ginger products from North Eastern States of India. The project also involves activities connected with market development, market research in about 11developed countries of the world and also markets in Latin America and Eastern Europe. It also provided equipments costing USD 80,000 to the Quality Evaluation and up gradation Laboratory of the Spices Board. At the moment, this organisation is working with the Board on design of the new projects that would be financed by the UNDP, which will start early next year. The main emphasis under this project will be to enhance the capabilities of the Spices Board, Indian Spice Exporters and farmers to meet quality requirements of international markets. In addition to the fullfledged quality laboratory at Cochin, a regional laboratory will be opened in Bombay. These laboratories can certify the quality of the Indian spices exported. The project also takes care of the quality consciousness on the part of the Indian spice farmers, he said.

Mr. Peter Furth in his paper (presented on his behalf by Mr. David Solomon) on "World Factors and Need for Co-operation, Collaboration Credibility" elicited the change happening world around, bringing the world to one market place smaller and more interdependent.

The Consumers throughout the world continued to place increasing demands, directly and through their Governments on the food industry to supply safe, healthy and clean food products at all times. Governments throughout the world have continued to place restrictions on spice trade especially in areas of pesticides, sterilants, labelling, sanitation and tariffs.

ASTA has agreed for a closer cooperation and improved communications between organisations such as The Spices Board, The international ,General Produce Association, The European Spice Association and The Canadian Spice Association.

ASTA is becoming capable of addressing the regulatory roles of the legislative, executive and judicial branches of American Government and can put mechanisms to persuade the congress and the executive branch to support the interests of the spice industry consistent with the public interest.

The Food and Drug Administration and the Environment Oil Protection Agency of United States consider ASTA as the authoritative and credible source of information, assistance and solutions to issues involving spices.

Among the major changes in recent time are: creation of a unified set of macroscopic standard, which is as restrictive as the FDA's defect action level. The other is the adoption of commodity tracking programme.

ASTA has instituted a lab accreditation programme with an annual auditing system.

The quality assurance committee of ASTA has developed a clean spice manual and is currently working to design hazard analysis critical control point mainly intended to prevent, detect and control salmonella in pepper.

ASTA is presently working on pesticide screening management programme wherein they have incorporated a pesticide educational programme apart from constituting pesticide advisory task force.

On the use of Ethylene Oxide (ETO), ASTA still believes in its safety and effectiveness when used in spices.

ASTA look upon the proposal of creating its International Spice Research Institute for long-range benefits both for producers and consumers of spices.

ASTA stand ready to cooperate, collaborate and share any and all information and ideas for the benefit of the spice industry world wide,

Mr. Arnold L. Manheimer speaking on the spice oleoresin market touched upon the following points in his presentation.

The advent of a large industrial and food service sector has created the need for spice extractives. The United States has suspended the Generalised System of Preference benefits on Indian oleoresins. Six per cent duty now in effect on account of this has put India at a competitive disadvantage.

Oleoresin producers are increasing capacity without realising their relative position in the World Market. Unless strategically positioned, this will further erode returns to existing units.

Oleoresin manufacturers without well known technically competent partners in consuming countries will not succeed. There is likely to be a greater focus by World Regulatory Agencies on contamination to foods including spices from chemicals such as herbicides, pesticides and insecticides.

Spice growing countries should utilise only those aids that are acceptable in the country of intended use of spices.

Spiced and seasoned foods represent one of the fastest growing segments.

Oleoresins and spice essential oils will continue to be the most natural building blocks to which food manufacturers will look, to find solutions for developing flavour systems.

Natural colour components are expected to have increased consumption and growing demand.

Producing countries to do significant amount of Research and Development on new products for use in flavour and fragrance industry.

Indian government should consider development of environmentally friendly pesticides.

The highlights in the paper by Mr. Randall B. Jansen (presented by Mr. Albert F. Goetze) were the following:

Most powerful trends in the United States and Europe are consolidation in the food industry, growing consumerism, changes in regulatory environment, slowing of economic growth, deflation and emergence of total quality management.

In the United States the term "Pesticide" has become synonymous with poison. Even though some of the pesticides are proven to be extremely safe and useful in improving cost and quality of food.

Irradiation for the sterilization of spices is considered to be the safest and most effective process for eliminating pathogens and reducing total microbial contamination. But some special interest groups work against this.

Suppliers will be required to introduce total quality management in the units to satisfy consumers' expectations on quality.

it will be necessary for the suppliers to demonstrate the willingness and ability to improve processing systems and to meet expectations consistently.

EPA and FDA are going to be stricter on enforcement of the regulations. This could result in a high percentage of detention or even a block listing. India which has both high residue levels and high frequency of residues of any spice should move quickly to overcome the situation, Since it is absolutely essential to meet consumer and regular requirements India have to move back down their supply chain to control and improve, the quality.

Mr. Leopoldo Cruz R. presented chillies and capsicum oleoresin as a source of pigmentation in the poultry. In his address he presented some of the opportunities for India. According to him they regard India as particularly suitable major source of raw material namely capsicum oleoresin for its good quality, high colour, low heat. India has cheap labour and good extraction facilities also. These factors ensure a very promising future for India.

Mr. J.V. Mariwala made a presentation on India's spice trade with America.

He highlighted the efforts taken by India to consolidate its position by investing in R&D and Market development. He suggested that in the future trading, the base of the business contracts should be widened to enable the exporters for getting a larger share in the U. S. markets by covering buyers for longer periods, He also emphasised the need for developing new products, new clients and new markets in order to attain higher level of exports.

Mr. M.K.K, Menon dealt with the approach one should follow for the American market. He mentioned that India has necessary infrastructure to support development and some of the best brains in the field of Science and Technology to provide necessary inputs. In the coming years in order to ensure total quality one could find that a number of companies in India will be qualifying for ISO 9000 standards. Referring to ASTA's programme for the control of "Salmonella" in pepper and their intention to reach out to the supplying countries with more information and educative programmes he suggested that a similar kind of programme could be taken up for pesticide also. He also touched upon the structure of world trading systems, which are being altered significantly by numerous new factors.

The discussions that followed brought out the following additional points:

a) The issue of accreditation of overseas laboratories was discussed in ASTA sometime back. It is now the time to work with overseas laboratories looking at the internal market in USA. In the long run, the market will be benefited,

b) USFDA has also done some work on the possibility of appointing agencies to check and approve products exported from different countries. FDA has already accredited Export Inspection Agency of India to certify black pepper. This accreditation may be extended to other spices also.

c) USFDA may consider having its own office in India, which could certify the products prior to shipment or approve an agency in India whose certification is acceptable to FDA so that the rejection of exported products can be avoided.

d) Indian exporters should ensure that the spices they export to USA conform strictly to quality standards of USFDA.

c) ASTA has gone through a programme for matching all its specifications with FDA specifications. In some cases there are still differences, At least on a macro analysis basis, the specifications should be one and the same.

f) As regards ETO and Methyl Bromide, use of these items is under threat in most of the developed countries. ASTA has a tracking programme on the status of methyl bromide as a post harvest fumigant. ASTA is trying to retain ethylene oxide as a sterilising agent and has a programme to spend 2 million dollars on ETO clearance for the next five years.

g) There are some orders issued by the US Environmental Protection Agency on the herbicides/insecticides that are not to be used in spices growing and also on organophosphorus pesticides. These orders are liberally interpreted. It is necessary to rethink on this, in such away that the risk can be minimised.

h) In the spice oleoresin extraction if those residues, and chemicals are resistant in solvents, the residual level can he much higher than actually in the raw spices. It is in this context, necessity arises to set up some standards on these things. The US trade has taken up seriously the above issues. It is necessary for producing countries to adopt processing techniques, which can minimise, if not eliminate the residual problems.

 

SESSION II

"ASIA, AFRICA AND AUSTRALIA"

SUMMARY AND CONCLUSIONS

Mr. Ian Hemphill speaking on the Australian market and opportunities for spices in India highlighted the following:

The size of the present Australian market for spices is in excess of 5000 tonnes valued at A$ 15 million. It is identified that there is an annual growth rate of 3% for this market.

Reliability of supply, quality and price determine the source of supply.

The ethnic food habits especially Asian and Indian are catching up fast and this opens up more opportunities for Indian spice exports.

The import regime in Australia is more concerned about public health and is governed by the Australian Quarantine Inspection Service Regulations.

2,30 p.m. Friday 6 November 1992

CHAIRMAN : Mr.Fazli A Husain
Senior Commodity Marketing Officer
International Trade Centre
UNCTAD/GATT. GENEVA
Speakers Mr., Ian Hemphill
Market Manager
Master Foods of Australia
Australia
 

Mr. Abdullah Ali Binmahfooz
Managing Director
Salch Abdullah Binmahfooz
Trng. Est.
Saudi Arabia
(Paper presented by):
 

Mr. Omar Babaker
General Manager
Saleh A Babaker Sons Co.
Saudi Arabia
 

Mr. Terry Baker
Empire Foods Limited
Wellington. New Zealand.
 

Mr. T.Vidyasagar
Partner
South India Produce Co.
Cochin. India.
 

Mr. Ram Kumar Menon
Senior Manager
Tata Tea Ltd.
Cochin. India.

Ethylene oxide is acceptable as a sterilisation material in the Australian markets whereas irradiation is facing resistance from various consumer groups.

 

The paper of Mr. Abdullah Ali Bin Mahfooz on Saudi Arabian markets for spices was presented by Mr.Omar Babakar. His presentation highlighted the following:

Around 32000 MT of spices are being imported on an average per annum, to Saudi Arabia. India is a major spice exporter to that country.

The consumer behaviour is gradually changing in Saudi Arabia. Once considered as the consumer of best quality spices, it has now become more price conscious.

Stable distribution channel is another area to be looked into for a consistent growth of Indian exports to Saudi Arabia.

Mr. Ram Kumar Menon assessed the potential of markets in Japan, New Zealand, Hong Kong, Singapore, Bangladesh and Sri Lanka. It is identified that Japanese markets are importing spice oils and oleoresins from other countries, which is of Indian origin. One area of concern is the ' sweat damage' experienced to spices being shipped in containers. This warrants for a review of the mode of packing of spices. He cautioned that frequent changes in quality specifications adopted by major importing countries would create confusion in the market.

Mr. Vidya Sagar explained India's view of spice market in West Asian and North African Region, In his assessment, there is a gradual decline in import of spices from India to this region. A recent trend for reconciling quality for price is a disturbing phenomenon. The change towards new consumer buying habits and the consumers' lack of awareness on India's ability to cope up with new requirements is the main obstacle to India being a major force in the retail market.

Mr.Terry Baker from New Zealand in a short intervention in the discussion followed, spoke on the change in the food habits in New Zealand. The change is from the conventional food habits to Thai, Indian and Chinese. He was also hopeful on developing spice market in New Zealand because of its healthy economy. The retail market in New Zealand grows at about 7.9%.
The discussions that followed brought out the following points:

a) In Australia, there is basically a uniform food act that covers the whole country. Only pharmaceutical and herbal medicines have different sets of law,

h) The per capita consumption of spices in Australia is about 500 gms. which is half of that of United States.

c) A realistic estimate of projected potential rate of consumption of spices is not available. However, use of herbs and spices are increasing in processed foods and fast foods. This is expected to present a steady growth rate in consumption of spices.

d) As regards quality c standards particularly 2 microbial and biochemical contamination, the regulations likely to be imposed by USA is expected to apply for Australia also.

e) Australia does not t have established set of s quality standards like ASTA. Most of the standards in Australia are based on set of specifications made by major importers.

0 In the present context, India has to market its lower grades of cardamom at competitive prices to retain its Saudi Arabian market share.

g) Japanese market is slowly opening up for Indian spices. They are buyers for quality spices and prices alone does not determine the buying decisions. Japanese have developed curry to suit their taste. For its preparation they source raw material from all over the world, which include India also. The production of Japanese curry has crossed 5000 tonnes. Indian restaurants are getting more and more popular in Japan. Once Indian exporters can meet the Japanese quality standards there s very good potential o export spices and spice products from India.

h) Pacific countries like Philippines, Korea, Thailand and New Zealand are emerging as new economic strongholds in this region. The lifestyle is fast changing. It is expected to create a new market niche in this region for Indian spices. Demand and quality standards have to be created in these markets and India should take a lead role in this.

 

SESSION III
EUROPE

At 10.00 a.m. on Saturday 7 November, 1992

CHAIRMAN Mr. A.G. Barve
Director
Export Market Development
Division
Commonwealth Secretariat
London.

Speakers Mr. Uwe Paap
Uwe Paap Verlag
(Hot Spice Newsletter)
Germany.

Mr. R.T. Griffiths
Chief
Office for Asia & the Pacific
I International Trade Centre
UNCTAD/GATT Geneva.

Mr. Fazli A Husain
Senior Commodity Marketing
Officer
International Trade Centre
UNCTAD/GATT. Geneva.

Mr. George Eaton
Marketing Manager
Bush Boake Allen Ltd
London

Mr. Freddie Cripps
Chairman
Universe Foods Ltd U.K.

Mr. George Paul
Director
Synthite Industrial Chemicals Ltd.
Cochin. India.

Mr. Eapen George
Chief Executive
A.V. Thomas & Co.
Cochin. India.

Introductory speech of the Chairman of the Session

It has been quite good that the subject has appropriately been chosen as the 'GLOBAL OPPORTUNITIES OF THE 90'S' for this Congress. There should be far reaching changes in the international economic scenario in the last 2-3 years, viz., disappearance of Soviet Union, the market orientation of the Soviet and the East European economics, the ongoing Uruguay round of the negotiations and the results of the elections taking place in the USA, the growth of the Far Eastern countries, the tiger countries which would also create some additional stimulus as far as the demand is concerned. As one looks at the North American scenario, the on-going NAFTA Agreements might be in place creating one of the largest market in the American peninsula but more particularly as far as this issue is concerned, we see Europe slowly moving market, even though it has some problems in other areas. I think the market will definitely be there and Europe 1992 will be a single European market with approximately 20 million people which will be as big as USA and Japan combined and should present great market opportunities though there might be some problems.

Again, Japan with international pressure, is bound to open its markets and spend a little more money in the developing world under pressure from other developed countries and this might again create certain amount of demand. So this is really the international scenario.

As far as the single European market is concerned, whereas it will have a trade creating effect, it will also have trade diversion effect naturally as the market has its internal barriers disappearing; one would find that there will be certain amount of trade diversion. On the whole I see that there will be an increase in demand but when one looks at single European market as one entity or as whole entity, 1 think it will far exceed the size of the US. Of course, how the spice producers and exporters create demand that led to the Europeans to be spicier will also be necessary because if we are able to meet this demand, the market will be able to take more. One is hoping that the Uruguay round will have a beneficial effect but you are all aware that various bilateral trade negotiating rounds have had beneficial effects on their import duties on ungrounded and processed spices which will reduce from 7.6% to 3.9% and on ground and processed spices from 11.7% to 5.1%. This makes us still higher than the rates in the US and Japan but at least they progress towards the elimination of some of these very obvious fiscal barriers.

Spices contribute substantially not only to rural incomes and incomes in developing countries but a lot of women are also employed in the production of spices. It is essential in the modern era where the governments are at the moment quite concerned about the role of the women or rather to ensure that the women have not only a secondary status in the production, marketing and other activities. It is very heartening to see that in the spice sector, so many women are involved. So this is one important aspect of the spice trade internationally and mind that these women are in the developing world. Of course, the women in the developed world have significant role to play and they are continuously fighting for their rights. But the women in the developing world are unable to fight for their rights. When the productive process in a developing economy creates certain opportunities for women, this is something significant to be encouraged.

When we think of spices contributing very significantly to the development of many developing countries, for instance Greneda in the Caribbean, 60% of the merchandising income from exports comes from export of nutmeg and mace. Almost 55% of the spice production originates in the Commonwealth countries. People like us working in the Commonwealth Secretariat look upon spices as a very important item from the Common wealth countries. This is one of the principal reasons why we have joined hands with our colleagues from International Trade Centre, UNCTAD/GATT, Geneva to set up the International Spices Group (ISG) which we hope, if it is declared as a commodity body of the common fund for commodities, might be very beneficial to the developing countries because we might then be able to, as you know, obtain a certain amount of assistance for certain projects. At the last meeting in Jamaica, where it was resolved that we should apply to the international common fund for commodities to join the ISG, we did set up a small group which included Mr. T. Nandakumar from India and several other people so that we could submit some project ideas for funding basically to the common fund for commodities. The two projects that we thought of and which has some prominent positions were: (1) programme of quality assurance for spices and (2) the generic consumption of spices in Europe, You will see that while this move towards the joining the CFK is on, one is already thinking in terms of Europe 1992. We do hope that in the coming years with the whole concept of liberalisation proceeding, we will be able to see the restrictive effects on no tariff barriers such as relating to quality standards, labelling, packaging, health, sanitary and phyto-sanitary regulations, disappearing not only on account of the developed countries as that of lowering their standards in any of these areas but on the other hand because the producers themselves will have become quality conscious and would be supplying spices of a certain quality to the buyers in the developed countries. So one hopes that in the developing world, we will be able to get a fair share of the markets of the right, developed countries and one hopes that such a share of the market will boost not only the production but also the processing of this particular commodity in the developing countries.

Mr. Uwe Paap Verlag presented on spice marketing consumer countries on the example of Germany. In his presentation he outlined the success stories of different fast food companies in Germany in the retail sector. He emphasised the need for diversifying the end product range to captivate new markets share. He also suggested that such retail-marketing programme should be adequately supported with publicity and promotion. This would naturally increase the consumption of spices.

Mr. R.T. Griffiths and Fazli k. Hussain spoke on the growing market for spices is, Europe.

The changing economic situations in East European countries are expected to increase demand for spices and the future offers great potential.

Rotterdam along with Hamburg and London have been identified as principal European trading centres for spices and also as major transhipment ports.

85% to 90% of the spices imported into Europe is in the whole form. The balance is contributed by spice oils and oleoresins, and ground spices. The recent trend is increase in import of processed spice in bulk. Among the spices, pepper occupies the principal position followed by capsicum. There is also a market for culinary herbs.

In West Europe industrial and food service sectors absorbs 50 to 60% of the spices imported, 30 to 35% by retail sector and the balance 10% by institutional sector.

The import of spices into European countries are duty free but processed spices attracts reduced rates of Duty.

The concern for quality is very high in European markets. Most of them are alert on the use of ETO as fumigant, irradiation for sterilisation and on microbiological contamination.

A new legislation is being introduced which imposes a responsibility for checking points on quality.

The general outlook is that by improving quality, adopting competitive prices and establishing joint ventures can help Indian spices get a bigger share in European market,

Mr. George J. Eaton gave a European perspective on the Indian Spice Trade. Spices add value to food products in the West. New end uses become possible with the various flavour profiles which were once used in traditional recipes.

It is expected that there will be a constant increase in the UK house hold expenditure of food. This growth is against the odds of highly competitive food retail market and constraints on volume demand by limited population growth. The expected value growth during 1991-96 period in real terms is 10% which is mainly due to the move to value added products.

With his five level model, he explained how India Spice Industry has covered the evolutionary levels of localised exploitation and internal integration. it has also crossed the 3rd level viz. Business process Redesign and is passing through the 4th level viz. Business Network Redesign. These two levels are revolutionary levels. The ultimate level is Business Scope Redefinition where in the organisation have to move outside the traditional scope of business. This movement will be necessary to sustain and increase the business.

At the level - 5 stage, there be demand for quality standards and legislative requirements of Europe and North America by the rest of the world especially Asian and Pacific regions.

The European food industry's concerns during 1992 are the UK Food Safety Act, EC Flavouring Directive, Aflatoxin/pesticides, UK Tin in Food Regulations, Packaging, Processing Aids/Additives, Nutrition Labelling, Micro Biological issues, and Mineral Oil Contamination.

It is visualised that India will be having closer linkages with other regional associations due to liberalisation of trade, strategic trade alliances and influence of multi nationals. There will be proactive response to consumer and regulatory demands which can help to develop new Asia Pacific markets.

The future demands a World Spice and Seasoning Association wherein ASTA, ESA, ISG, IGPA, Spices Board, All India Spices Exporters' Forum etc. will be active partners.

Mr. Freddie Cripps in his analysis of growth in ethnic foods in United Kingdom established that Indian foods occupy nearly half of the 300 million market. Over a period of 4 years the growth of Indian foods registered 96% increase. He also made an impressive analysis of the source countries of major spices imported to the UK. According to him Indian foods occupy nearly half the market with Chinese and Mexican food at 30 and 9%, respectively.

During 1991 Indian food represents 141 million pounds, which is 47% of the total. This was only 72 million pounds during 1988 showing a growth of 96%.

The total market size during 1988 was only 140 million pounds, which has now (1991) grown to 300 million pounds representing 114% growth.

The ethnic population during 1988 was 2.5 million, which is 5% of the total population. During 1991 it has grown to 6%.

The increased change in food habits especially towards creating dishes in the home from the raw ingredients rather buying ready to eat meals, illustrates the import of half a dozen basic ingredients into the UK.

The recession also benefit the market with consumers eating more ethnic foods in home.

It is forecasted that the ethnic food market will go to a level of 430 million pounds by 1995, an increase of 43%. This gives great opportunity for manufacturers and processors alike.

Mr., George Paul presenting on the Indian oleoresin industry, briefly described the performance of spice oils and oleoresins, He brought out the issues faced by Indian industry like chlorinated solvents which is now banned in Europe, position of paprika oleoresin market and the unreliable supply position of raw materials for extraction industry. He also cautioned the emergence of new units with additional capacities in the extraction field. To meet the new opportunities, India has to invoke expertise and develop flavour systems, than remaining as a mere supplier of oleoresins. He stressed the need for backward integration to agriculture for having the right commodity for the extraction industry.

Mr.Eapen George felt that the unified Europe is as strong and buoyant as the American market. The diverse range of new technology for micro monitoring of biochemical and microbial contamination has reached such a level that new concerns have emerged among consumers and these concerns have political support across Europe and USA. He also wanted Indian exporters to understand this situation and act upon it.

The discussions brought out the following points:

a) The recent political and economic restructuring of East European countries demands for a new approach for marketing Indian spices in this region. One of the suggestion is to put up principal trading centres for commodity exports in Rotterdam and Hamburg. This is to service domestic retailers in the upcountry market in Europe.

b) There is a growing concern among European buyers about quality of spices. It is reported that health standards are likely to be more stringent than that is prescribed by USFDA, The impending unification of Europe is trying to put out fresh norms on this. The European Spice Trade Association contract standards on specification on spices and herbs is a precursor to this. It is suggested to have a database on pesticides/pesticide residue level on spices. This data base information has to be exchanged between the producing and consuming countries.

c) There is lot of concern on fumigants which are now being used, ETO is now a banned chemical in Europe. But alternative fumigants like fastoxin, fomiligate etc. is available for use.

d) In the flavour industry there is an assessment mechanism of consumption ratio and this is related to the food consumption. Such a ratio assessment should be set for contaminants in spices also.

c) Producing countries should ensure good manufacturing practices, which can minimise pesticides and herbicides.

f) European Spice Trade Association is working on pesticide levels and its side effects in collaboration with ASTA. The Indian exporters and other agencies could also be involved in this programme.

g) It is necessary to undertake lot of promotional work to teach the end uses or the intermediate uses on how to use the spice oils and oleoresins in order to develop awareness and market in East European countries.

h) After the unification of Germany the investments in the Eastern part of Germany has increased and in the next few years the demand for different products including spices is expected to increase from this region.

i) International Trade Centre, Geneva is requested to put in more efforts on areas like standardisation of quality, pesticide residue analysis, and generation of database etc. ITC should also work towards standardisation of detection levels and identification of new and potential markets.

k) While there should be a pesticide database and detection system, it is also necessary to monitor the operations of pesticide manufacturers in spice consuming countries who export pesticides to producing countries