'Spices will remain bullish for now'

Prices of all major spices will continue in the upper circuit for the next 12-14 months owing to a supply crunch in major producing countries across the world, said Alan D Wilson, chairman, president and CEO of US-based  McCormick.

Addressing the media here on Wednesday, he said the global demand for spices and spice-based products remained almost static, but production was affected leading to a shortage in the supply recently.

“Prices of major spices like pepper, cardamom and ginger will move upward in the  short-term. Consumption in the US and European markets have increased despite the recession. According to the cyclical pattern of prices and production of spices, the market will be in a bull mode for short-to-medium-term,” he said.

McCormick, he said, was planning to expand the sale of Indian spices, flavours and spice-based products in the western markets. The company would source products from India and market them in various western countries  under its brand names. The company sources 40 spices from India.

The company has bought 26 per cent in Eastern Condiments, a Kerala-based spice products manufacturer, for $36 million. It plans to have similar tie-ups with other Indian companies to expand its business in the US, EU and India. 

Though the Indian spices market is estimated to be $5-5.5 billion, only 10 per cent is branded. “There is tremendous potential here,” he said.

Navas Meeran, vice chairman and managing director of Eastern, said the capacity expansion of plants was not an immediate strategy. The company would start new packing facilities at Guntur in Andhra Pradesh and Ghaziabad (Haryana) for reaching out to upcountry markets in the north and south. It would also introduce various brands like Lawry’s Club House, Schwartz,Ducros, Vahine and Aeroplane of McCormick in India for high-end consumers.