Entering the European market for turmeric

To enter the European market for turmeric you must meet the mandatory requirements set by the European Union (EU). At the same time, also consider meeting the common additional requirements that European buyers and niche markets have, as they will help you to enter the European market. The European market for turmeric is divided into three segments, with separate channels you can enter through. India controls the global supply of turmeric. Prices of turmeric vary from region to region, country to country, and by quality.

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1. What requirements must turmeric for natural health products comply with to be allowed on the European market?

What are mandatory requirements?

If your turmeric is used in food supplements, you must comply with:

• EU food supplement legislation
• European General Food Law
• maximum Residue Levels (MRLs), contaminants in food and microbiological contamination of food, food hygiene as outlined in the EU’s Hazard Analysis and Critical Control Points,

There have been several registered food safety issues with turmeric in the EU’s Rapid Alert System for Food and Feed that resulted in action being taken, including its seizure. Industry sources suggest adulteration is a key food safety issue for turmeric from India and Bangladesh, particularly when supply is low.

If your turmeric is used in herbal medicinal products you must comply with:

• EU Directive 2004/24/EC
• Rules governing medicinal products in the EU, including allowed marketing claims.

There are several other requirements for turmeric. It must also comply with:

• Good Agricultural and Collection Practices (GACP) for raw plant materials
• Good Manufacturing Practices (GMP) for extracts or active substances used as starting materials
• The medicinal use of turmeric as stated by the European Medicines Agency (EMA)

Convention on Biological Diversity (CBD)/Access and Benefit-Sharing (ABS)

To export turmeric to the European market you must comply with the requirements on using plant resources agreed under international treaties and protocols within the Convention on Biological Diversity (CBD). This is because the CBD is a part of EU law. Additionally, it is likely your own country is also a signatory, meaning you need to comply to meet your national laws.

The Nagoya Protocol’s Access and Benefit-Sharing (ABS) provides guidelines for accessing and utilising genetic resources and traditional knowledge, as well as the fair and equitable sharing of benefits. Similar to the CBD, European companies need to comply with ABS legislation. ABS is also likely to be a part of your country’s regulations. As an exporter of turmeric to the natural health product sector, make sure you abide by ABS.

In recent years, there is growing consumer awareness and demand for more environmentally-friendly products, and this trend is set to continue. This is leading European buyers to seek ethically sourced ingredients, something which is likely to become more important in the future.

What additional requirements do buyers often have?

Quality requirements

The main quality requirement that buyers of turmeric have is regarding its levels of curcumin content and antioxidant activity. European buyers seek turmeric with higher levels of curcumin content because it is connected to the anti-inflammatory activity of turmeric, which is important when formulating natural health products.

Note that the percentage of curcumin in turmeric varies widely based upon the geographical location, climate and growing conditions it is harvested and/or cultivated in, even within a country. Processing also influences the percentage of curcumin. There are about 30 varieties of turmeric grown in India. Allepey and Madras are the most common ones. The Suvarna variety has relatively high curcumin content of about 8.7 percent.

Quality management in the health products sector is expected to become more important in the coming years. Quality is very important to European consumers and health product manufacturers who want to ensure they meet consumers’ needs.

Documentation

European buyers of turmeric request that exporters provide them with well-structured and organised product and company documentation because this is used to see if your turmeric meets their requirements. Consider doing so, as it gives you an advantage when trying to establish yourself in the European market and it can be the basis for long-lasting trading relationships. It also makes you look organised and well prepared to do business with.

European buyers of turmeric for health products usually want exporters to provide them with Safety Data Sheets (SDS). Safety Data Sheets contain a:

• product description;
• classification;
• hazard identification; and
• information on safety measures.

Secondly, European buyers want to be provided with Technical Data Sheets (TDS), which contain:

• a product description;
• product classification;
• quality analysis;
• information on applications; and
• certificates.

European buyers also request a Certification of Analysis (CoA) which contains analytical data from the product delivered.

• The Certification of Analysis matches:
• data mentioned in the TDS;
• the pre-shipment sample that was approved by the buyer; and
• contractual agreements with the buyer.

Your Safety Data Sheet needs to include risk and safety phrases. This is because they show what the main risks and hazards are and how you need to prevent them.

In your Safety Data Sheet for curcuma longa extract, include risk phrases:

• R36 - Irritating to eyes.
• R40 - Limited evidence of a carcinogenic effect.

And safety phrases:

• S22 - Do not breathe dust
• S36/37 - Wear suitable protective clothing and gloves
• S46 - If swallowed, seek medical advice immediately and show this container or label

In your Safety Data Sheet for curcuma longa oil, include risk phrases:

• R43 – Causes burns.
• R52/53 – Harmful to aquatic organisms, may cause long-term adverse effects in the aquatic environment.
• R65 - Harmful: may cause lung damage if swallowed.

And safety phrases:

• S24 – Avoid contact with skin
• S37 – Wear suitable gloves
• S62 - If swallowed, do not induce vomiting: seek medical advice immediately and show this container or label

Consider acquiring SDS, TDS and CoA for your turmeric and have them ready for European buyers. Additionally, if you already have documentation, inform European buyers when approaching them.

Labelling and packaging requirements

In order to export your turmeric on to the European market you must comply with the following labelling requirements:

• The name, address and telephone number of supplier
• Product name
• Batch code
• Country of origin or place of provenance
• Date of manufacture
• Best-before date
• Weight
• Storage conditions or conditions of use
• Relevant hazardous symbol (see Figure 1) if you export curcuma longa extract and essential oil because they are classified as hazardous

Figure 1: Hazard labels for curcuma longa extract and essential oil

If you export organic turmeric, your labelling needs to include the name and/or code of the inspection body and the certification number.

Packaging requirements may differ from buyer to buyer. There are different types of packaging materials used, such as aluminium foil bag, metal drums, depending on the volume. Volume also varies and can range between 5-50kg.

Payment terms

Payment is central to all trade and presents risks to everyone involved. Before trading with European buyers do risk assessments of the available payment terms. As an exporter of turmeric, minimise your risks while working to meet the needs of European buyers.

There are several methods of payment. However, for both importers and exporters, Letters of Credit (LC) are considered the safest payment term. This is because an LC lets both parties contact a neutral arbitrator, usually a bank, to resolve any issues. For the exporter, the chosen bank is a guarantor of full payment as long as goods have been dispatched. In such instances, to avoid further losses, exporters should find new buyers and pay for the return of dispatched goods.

Based upon their needs, importers and exporters can choose from several LC payment terms. These include standby, revocable, irrevocable, revolving, transferable, un-transferable, back to back, red clause, green clause and export/import. For exporters, standby LC is considered the safest, with it being frequently used in international trade. This is because it provides security to both importers and exporters who have little trading experience with each another. Other payment terms include cash in advance, documentary collections and open account.

Delivery terms

When agreeing delivery terms with European buyers, you must carefully consider three important factors: delivery time, volume and cost. This is because failure to meet agreed delivery terms could end your trading relationship with European buyers.

1. Delivery time - As an exporter, you should understand that European buyers prefer shorter delivery times. Air cargo is usually faster than sea freight. Air freight is also more reliable in regards to on time delivery.
2. Delivery volume/quantity of order - The volume of your order is an important factor to take into consideration when choosing a mode of transport. Larger quantities are often cheaper to ship by sea. With lower volumes, air freight can be less expensive, as margins get smaller.
3. Cost of delivery method - It is estimated that sea freight is usually 4-6 times cheaper than air freight. This applies to larger volumes. It is not likely that price of your cargo will increase substantially, if you increase the volume.

What are the requirements for niche requirements markets?

Organic ingredients

In Europe, there is growing consumer demand for organic products. Many buyers are therefore demanding organic ingredients for their natural health products. As an exporter of turmeric you should therefore consider getting organic certification. In order to market your natural ingredients as organic on the European market, you must meet European Union regulations. You can find information on the EU organic certification on the IFOAM website.

Environmental and social standards

European consumers and retailers are increasingly putting pressure on companies to ensure that their products are made according to environmental and social standards. European buyers of turmeric are therefore requesting suppliers meet environmental and social standards.

As an exporter, one way you can do this is by gaining verification and certification that proves you meet environmental and social standards. With regard to environmental sustainability, consider meeting UNCTAD BioTrade Initiative and implement the BioTrade Principles, alongside FairWild Standards. To prove you meet social standards, acquire FLO Fairtrade certification or meet FairForLife standards.

2. Through what channels can you get turmeric on the European market?

The commercial production of turmeric takes place in several countries around the world, including India, Peru, Madagascar, Thailand, Costa Rica and Vietnam. On the European market, turmeric is used in the food industry, natural health products industry, and cosmetics industry.

How is the end market segmented?

The European market for turmeric can be segmented per end-user industry. These include the food, health products and personal and home care sectors. Figure 2 gives examples of turmeric products on the European market by end-user segments.

Figure 2: Examples of turmeric products on the European market

Source: Various

Food industry

In Europe, around 60–70 percent of all turmeric is used by the food industry. European spice producers and companies, the meat industry and the sauce and condiments industry are the main users of turmeric. Retail chains, independent grocers, speciality shops, street markets and online retailers which fall under the banner of retailers also use turmeric. Turmeric is also used by the catering and food services sector, such as restaurants and hotels, with this being driven by the growing popularity of ethnic cuisine amongst European consumers.

Health products industry

Turmeric in its powdered, liquid and curcumin extract forms (usually of pharmaceutical grade) is used in food supplements and pharmaceuticals because of its active substance which has several beneficial properties. Properties include anti-bacterial, anti-viral, anti-inflammatory, anti-tumor, antioxidant, antiseptic, cardioprotective, hepatoprotective, nephroprotective and radioprotective properties. For example, Simply Supplements sells turmeric supplements because of its anti-inflammatory properties.

Turmeric is also used in some other types of complementary and alternative medicine; for example, in Ayurveda, turmeric is stated to have medicinal properties such as strengthening the overall energy of the body, relieving gas, dispelling worms, improving digestion, regulating menstruation, dissolving gallstones, and relieving arthritis.

Cosmetics industry

The cosmetics industry uses turmeric because of its beneficial properties and its role as a colourant. Turmeric is also used in soaps as a colourant.

This study deals with turmeric used in the natural health products sector.

Through what channels does turmeric end up on the end-market?

Figure 3 shows the export value chain for turmeric on its journey to the European market. Turmeric can enter the European market in a powdered, liquid and curcumin extract form. The processing of turmeric is dependent on facilities and resources available.

With limited resources and facilities turmeric can be processed in 4 steps; these are curing, drying, polishing and colouring. The processing of turmeric in order to extract its curcumin powder requires a considerable amount of resources and facilities due to the processes complexity. This is even more so the case with larger quantities. This process includes milling, solvent extraction, filtration, desolventisation, turmeric oleoresin and crystallisation.

Figure 3: Export Value Chain for Turmeric

Source Ecovia: Intelligence

Importer/Distributor

As a processor/exporter of turmeric, your main entry points to the European turmeric market are importers/distributors. European importers/distributors often deal in a wide range of natural ingredients. Their expertise is in the global sourcing of natural ingredients, ensuring the quality and documentary and regulatory compliance, along with selling to processors and natural health product manufacturers.

The British company Supplement Factory is a leading importer/distributor of turmeric in Europe. It uses turmeric’s curcumin content in its natural health products. Other importers/distributors of turmeric in the European market include Tradin Organic, Nexira and Forward Farma BV. Some importers/distributors specialise in trading and supplying organic turmeric to European natural health product companies. BioImport is one company doing so.

Agents

An export agent is a firm or an individual that undertakes most of the exporting activities on behalf of an exporter, usually for a commission. Agents can be found in developing countries as well as in Europe. However, it is not that common for companies to use agents in the European market. As an exporter from a developing country, you can work with agents who represent and act on your behalf on the European market.

Other channels

The processing and exporting of turmeric can be combined and undertaken by the same company in turmeric producing countries. Suminter India Organics is an established Indian company doing this. Turmeric can end up on the European market as a finished natural health product. For example, Ayusri Health Products is an Indian company exporting finished curcumin capsules to the European market. Finished products are imported to the European market via importers.

What is the most interesting channel for you?

As an exporter of turmeric in a developing country, importers/distributors are the most interesting channel. Dutch company Tradin Organic is a leading importer of turmeric in Europe. Other importers of turmeric on the European market include Dr. Behr GmbH and Curcumaxx.

The European finished natural health products market is another interesting channel for exporters. For example, Ayusri Health Products is an Indian company exporting finished curcumin capsules to the European market.

3. What competition do you face on the European turmeric market?

Eurostat data from 2018 showed India was the largest exporter to export turmeric to Europe in terms of volume. Following India, Eurostat data showed that Peru, Madagascar, Thailand, Cota Rica and Vietnam were the largest exporters to export turmeric to Europe in terms of volume respectively. Key strengths all these countries share which make them leading exporters of turmeric include them having an established turmeric industry and having the ideal climatic conditions for its harvesting and cultivation.

What countries are you competing with?

India

One of India’s key strengths is that its government supports the Indian turmeric industry. This is done by the Spices Board of India, a flagship organisation for the development of Indian spices under the Union Ministry of Commerce and Industry. For example, the Spices Board of India recently adopted a resolution to ensure a minimum support price for turmeric which will support turmeric farmers in the Telangana state.

India’s other strengths include governmental policies, low costs, along with the development of rural areas. It could therefore become easier for Indian producers to export turmeric to the European market. However, climate change has a negative impact on the Indian turmeric supply. Droughts and floods have destroyed turmeric yields and led to fluctuating prices in recent years.

Another key challenge the Indian turmeric industry faces is the adulteration of turmeric with lower-cost botanical ingredients, starches, chalk powder, cassava, and synthetics which negatively affects its quality. Other challenges India faces include inadequate infrastructure in several parts of India, with this making it difficult for exporters to export turmeric.

Peru

Peru’s strengths include its membership of the Pacific Alliance Trade Bloc, being rich in agricultural resources, a developing agricultural sector, and its governments commitment to improving infrastructure. As such, it could become easier for Peruvian producers of turmeric to export to the European market.

However, climate change and deforestation are two key challenges the Peruvian turmeric industry faces because they are endangering turmeric cultivation and production. Other challenges Peru faces include inadequate infrastructure and widespread corruption.

Madagascar

One of Madagascar’s key strengths is its production of good quality turmeric which contains high levels of curcumin with a strong smell and taste. Another strength is its government support of the turmeric industry, for example by helping turmeric farmers through various projects. It could therefore become easier for producers of turmeric in Madagascar to export to the European market.

However, climate change is a key challenge the industry faces because it endangers turmeric cultivation. Another key challenge Madagascar’s turmeric industry faces is the country having high levels of poverty which has resulted in the growth of subsistence farming. Other key challenges Madagascar faces include poor infrastructure, political instability along with unsustainable land management practices.

Thailand

Thailand’s key strengths include its rich agricultural resources along with its government commitment to improving infrastructure. Thus, it could become easier for Thai producers of turmeric to export to the European market.

However, climate change, particularly changing temperatures and more unpredictable rainfall is a key challenge Thailand’s turmeric industry faces because it endangers turmeric cultivation. Other challenges Thailand faces include poor infrastructure, political instability and a large informal economy which makes exporting difficult.

Costa Rica

One of Costa Rica’s key strengths is its government supporting the country’s agricultural sector, for example by providing research, training and technical assistance to growers. Costa Rica’s other strengths include it being a stable country with a good business environment. It could become easier for Costa Rican producers to export turmeric to the European market.

However, one challenge that the turmeric industry faces is that the majority of Costa Rica’s agricultural land is used for coffee and banana production and growing staple food crops. Climate change is another key challenge for the long-term productivity of Costa Rica’s agricultural sector and therefore turmeric production, specifically increasingly severe floods and droughts. Other challenges Costa Rica faces include ineffective government and inadequate infrastructure.

Vietnam

One of Vietnam’s strengths is that it has a developing turmeric industry with levels of turmeric production increasing. For example, in recent years, parts of Vietnam which offer ideal conditions for turmeric farming are being used for its cultivation. Furthermore, the Vietnamese government has implemented several polices to support and improve Vietnam’s agricultural sector.

It could therefore become easier for Vietnamese producers to export turmeric to the European market. However, climate change is a significant challenge for the turmeric industry, with a recent International Panel on Climate Change report indicating that Vietnam is among the most vulnerable nations to climate change. Particularly, typhoons, landslides, flooding and droughts which are expected to worsen in coming years. Other challenges Vietnam faces include poor infrastructure, corruption and a lack of transparency.

What companies are you competing with?

Many established companies export turmeric to the European market. A professional website with well-prepared content is something established companies have. The chosen companies named above all have one. Their websites will include sections informing prospective buyers about the companies themselves, how they source and process their turmeric along with its technical details, as well as the certifications they hold, accompanied by professionally taken photographs.

Indian companies

One of Suminter India Organics key strengths is its commitment to exporting high-quality natural and organic ingredients in socially responsible and environmentally sustainable conditions. Another of its key strengths is its turmeric having certification proving it meets its commitments.

For example, Suminter India Organics holds Good Manufacturing Practice, British Retail Consortium Global Standard for Food Safety and Fairtrade certification, and its turmeric is produced and processed according to HACCP guidelines and EU organic production methods.

Peruvian companies

Amazonas Produce is an established Peruvian company exporting turmeric to the European market. One of the company’s key strengths is that it exports high-quality certified organic turmeric powder. Another of Amazonas Produce’s key strengths concerns its facilities, specifically its own processing plants and warehouses that allow it to meet its clients’ demands at short notice.

Malagasy companies

Phal Flor Export is a company from Madagascar that exports turmeric to the European market. One of Phal Flor Export’s key strengths concerns its commitment to exporting high-quality organic turmeric, with it holding European Union organic and Ecocert Organic certification. Another of Phal Flor Export’s key strengths concerns its commitment to upholding social responsibility standards, with it having Ecocert Fairtrade certification.

What products are you competing with?

Ginger

Ginger is a product that has been identified as a product competing with turmeric. Ginger is widely cultivated in parts of the world which have ideal conditions for its growth, specifically tropical and semi-tropical conditions. Most of the global production of ginger is in India. However, importers of ginger have concerns about the quality and cleanliness of India’s ginger, particularly its adulteration. This is a key weakness. However, ginger is still widely cultivated in other countries such as Nigeria, China, Indonesia and Nepal, with this being its strength.

Ginger is used in food supplements because of its wide range of health benefits, which is another of its key strengths. The health benefits of ginger include improving digestion, blood sugar levels, and harmful cholesterol levels along with reducing inflammation, nausea and menstrual pain. The European ginger market is expected to increase in the next few years due to increasing consumer awareness of its health benefits, along with its growing use in the healthcare industry. Ginger is therefore a threat to turmeric.

Ginseng

Ginseng is a product that has been identified as a product competing with turmeric. China, South Korea, the United States and Canada are the largest producers. There are several species of ginseng, each with their own benefits, that are found and cultivated globally. This is a key strength because it offers formulators choice. For example, Asian ginseng is considered to stimulate the nervous system and enhance cognitive performance whilst American ginseng is thought to regulate hormones, relieve stress, and stimulate the immune system.

A weakness of ginseng is that it is a niche product due to a lack of consumer awareness, with ginseng having a large presence in Asia because of its traditional use. However, given the global expansion of the health product market, ginseng could be a threat to turmeric in the future as it has the potential for market expansion.

Moringa

Moringa is product that has been identified as a competing product to turmeric. The moringa plant is native to regions of northern India and Pakistan. India is the world’s largest supplier of moringa, but European importers have strong quality concerns about Indian supply. This is a major weakness. However, the moringa plant is now found across tropical zones in Africa, Asia, islands in the Pacific and the Caribbean, and South America and is also cultivated in other parts of the world. This is a major strength.

Moringa is becoming increasingly popular in the European market for food supplements because of its wide range of health benefits. This is another key strength. Health benefits of moringa include it being an excellent source of vitamins and minerals and rich in antioxidants. The European market for moringa remains young and underdeveloped, however the European food supplement market and global moringa products market are both expected to increase in the coming years. Moringa could therefore potentially be a greater threat to turmeric in the future.

4. What are the prices for turmeric on the European market?

The prices of turmeric vary greatly between regions. In India, the FOB market price for turmeric powder is between USD 1.3-1.7/kg. Whereas in other regions, the FOB prices of turmeric powder can reach USD 3-4/kg. The prices of turmeric from India have been more or less stable in the last year. Pharmaceutical grade turmeric capsules are priced at (FOB) USD 60-100 per kilogramme. It is expected that the price will be affected in 2020 by unfavourable weather conditions in 2019. The further development of turmeric prices will depend on weather conditions and market demand for turmeric.

Figure 5: Estimated price breakdown of turmeric in the European market

Source: Ecovia Intelligence

This Study has been carried out on behalf of CBI by Ecovia Intelligence.

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