Spices and Condiments (1+1)

Marketing

 
• The marketing of spices is very important in their trade. This is in the hands of several intermediaries in the country. There is normally no government intervention in this trade, with regard to the marketing procedure or in the maintenance of a reasonable price for the farmers. Farmers dispose of their produce either locally to a village shop, co¬operative society or even to a terminal market. The choice depends on a number of factors such as loyalty or financial obligations to a particular trader, the distance to the terminal market, the prevailing market price, etc. Marketing the produce to pre-harvest contractors is also in vogue in certain areas. In this case, the farmers receive an advance payment immediately after the acceptance of the offer.
• Collection centres operate within a short distance of the growing areas and also in almost every town. The merchants purchase from these centres when the price is quite attractive in the terminal markets. Commission agents receive the goods and sell them to the exporters through brokers and dealers. The exporters grade the finished product according to grade specifications and finally consign the packed material to the shipping agents. The important channels in the spices marketing are:

  1. Producer – Village merchant /wholesaler – commission agent/exporter-Foreign importer

  2. Producer-Village merchant/wholesaler-commission agent/wholesaler of cosuming market-retailer-consumer.
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• Of these two, the more important one for black pepper is the former channel, as the major share of the produce is being exported and the internal price is solely dependent on foreign demand.
• At present there is no regulated market for spices in Kerala. However, the co-operative marketing societies in Kerala handle these commodities, but they are also not functioning very well. The main reason for their failure is their poor financial resources that makes them incapable of providing short term/long term loans to the farmers in time. In other states like Karnataka, where regulated marketing is in vogue, the farmers do not get their legitimate share.
• Normally, the farm price a grower gets is much lower than the retail sale price in the assembling or distributing markets. This wide range of disparities in the price received by the producers is mainly due to:
1. Expenditure incurred in marketing.
2. Margin of profit enjoyed by the pre harvest contractors/intermediaries.
3. Deduction on account of high moisture percentage.
4. Incidence of various taxes and other charges.
5. Transportation costs, etc.
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