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Entering the European market for turmeric

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Takes 36 minutes to read

To enter the European market for turmeric you must meet the mandatory requirements set by the European Union (EU). 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.

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

What are mandatory requirements?

As an exporter in a developing country you can only export turmeric to the European natural health product market if you are compliant with the EU’s mandatory legal requirements for natural ingredients for health products. Non-compliance will result in your turmeric not entering the European market.

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

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:

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

Tips:

  • Familiarise yourself with the Marketing Authorisation procedure for medical products sold on the European market because the marketing of medical products is strictly regulated in the EU.
  • Some European countries are signatories to harmonised lists of natural ingredients for food supplements such as BELFRIT. Other European countries are following them despite not being signatories. The rhizome of curcuma longa and its essential oil are listed on the BELFRIT and the German positive list, so inform prospective European buyers about this.
  • See the CBI study ‘What requirements must natural ingredients for health products comply with to be allowed on the European market?’. This study provides further guidance on mandatory as well as broader market entry requirements for this sector.
  • Visit the Access to markets Portal (previously known as the EU Trade Helpdesk) for more information on import rules and taxes in the European Union.
  • Contact Open Trade Gate Sweden if you have specific questions regarding rules and requirements in Sweden and the European Union.

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.

Tips:

  • Visit the CBD website as it provides useful information on CBD and ABS, including country profiles.
  • Consider ethically sourced turmeric, as this is something European buyers are increasingly seeking.
  • Inform buyers if your turmeric is ethically sourced and display this information on your company website and marketing materials, as this will make you more appealing to buyers.

Documentation

European buyers of turmeric expect exporters to provide them with well-structured and organised product and company documentation because this is used to verify if your turmeric meets their requirements. For example, when asked about documentation in an interview, a European buyer of turmeric replied: “we ask for all the relevant documentation as this is a necessity”.

You must therefore provide buyers with documentation when trying to establish yourself in the European market. Doing so gives you credibility, as it makes you look organised and well prepared, which is key to forming long lasting relationships with buyers.

European buyers of turmeric for health products expect exporters to provide them with a Safety Data Sheet (SDS), Technical Data Sheet (TDS) and Certificate of Analysis (CoA). Table 1 shows what is contained in the SDS, TDS and CoA, to help you prepare these three pieces of documentation.

Table 1: What is contained in Safety Data Sheet (SDS), Technical Data Sheet (TDS) and Certificate of Analysis (CoA)

Safety Data Sheet (SDS)

Technical Data Sheet (TDS)

Certificate of Analysis (CoA)

that matches

Product description

Product description

Data mentioned in the TDS

Product classification

Product classification

Pre-shipment samples approved by buyer

Hazard identification

Quality analysis

Contractual agreements with buyer

Information on safety measures

Information on applications

 

 

Certificates

 

Your SDS needs to include risk phrases and safety phrases. Risk phrases indicate the main risks and hazards, while safety phrases indicate the safety measures that need to be taken because of those risks and hazards.

In your SDS for curcuma longa extract, include the following risk phrases:

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

And these 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 SDS for curcuma longa oil, include the following 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

Acquire an SDS, TDS and CoA for your turmeric and have them ready for European buyers. Additionally, when approaching buyers, inform them of any documentation you have.

Tips:

What additional requirements do buyers often have?

Quality requirements

Quality is important to European buyers of turmeric, with one buyer commenting that “quality is the main focus for us”. The main quality requirement that buyers of turmeric have concerns 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.

Speak to European buyers to find out their specific requirements, and meet those requirements. Buyers expect structured company and product information, including Technical Data Sheets, to prove that you meet their requirements. So be prepared to provide this.

European buyers regularly test products they buy, usually on a per batch basis, to ensure that products meet quality requirements and are not adulterated or contaminated. A European buyer of turmeric stated in an interview that “we analyse the products… we also test in our facilities… we check for adulteration”. European buyers also test samples provided by prospective exporters when deciding whether to do business with them.

So always ensure that all products you send to your buyers meet their quality requirements and are not adulterated or contaminated. If you fail to do so, buyers will probably reject the products they ordered, you will bear the financial consequences, and your business relationship with them will probably end.

Turmeric of a consistently high quality is important to European buyers, as it is key to the manufacturing of natural health products. Buyers therefore prefer a high-quality turmeric product across all orders in suitable packaging as per order volumes. For example, turmeric powder in polypropylene (PP) lined kraft bags that can hold 25 kilograms for an order of that size.

Quality 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.

Tips:

  • Only agree to meet specific requirements of European buyers if you can meet those requirements. Because failing to do so could end your business relationship with them.
  • Have up-to-date documentation that is readily available, as buyers use documentation to assess the quality of your product.

Quality management standards

European buyers of natural ingredients for health products increasingly using quality management standards when assessing the credibility of prospective exporters. Adopting quality management standards gives your company credibility, as it shows your commitment to delivering high quality ingredients, and it boosts your image. It also helps to prove that you comply with mandatory requirements.

So as an exporter of turmeric, consider adopting quality management standards. Examples include:

The importance of quality management in the health products sector is expected to increase in the future. Quality is very important to European health product manufacturers who want to ensure they meet consumers’ needs.

Tips:

  • When approaching European buyers, let them know if you have certifications they seek, as that increases your appeal.
  • Display certification sought by buyers on your website and marketing materials because it gives you an advantage, as buyers use standards to assess exporters.

Labelling requirements

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

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.

Tip:

Packaging requirements

European buyers demand turmeric of the highest quality. If you fail to package your product correctly, its quality will probably decline. This may lead to buyers rejecting the product they ordered, and negative financial consequences for you, and it could also end your business relationship with them. So consider preserving the quality of your turmeric by using appropriate packaging materials and complying with general requirements. This includes always taking the following steps:

  • Use packaging materials that do not react with your turmeric. Because if you use packaging materials that are reactive to turmeric, its quality will decline.
  • Use clean packaging materials. Because if you use packaging materials that are contaminated, with bacteria for example, your turmeric will probably also be contaminated and its quality will then decline.
  • Ensure that certified organic turmeric is physically separated from conventional turmeric to prevent contamination.

Packaging requirements often differ from buyer to buyer. So speak to European buyers to find out their specific requirements and consider meeting those requirements.

The EU is committed to environmental sustainability and sustainable growth, something it has made clear in its Circular Economy Action Plan and the European Green Deal. It has set key priorities, such as reducing waste and increasing recyclability.

The EU is therefore putting increasing pressure on European businesses to reduce their waste and increasing recyclability through targets and policies. So environmental sustainability is becoming more important to European buyers – at trend that is expected to continue. You should therefore consider using recycled and/or recyclable packaging materials.

Tips:

  • Only agree to meet specific packaging requirements of European buyers if you can meet them. Failing to do so could end your business relationship with them.
  • Consider using recycled and/or recyclable packaging materials, as environmental sustainability is becoming increasingly important to European buyers. Read the guide on packaging to reduce environmental impacts for information and guidance on ways to do this.

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.

Tips:

Delivery terms

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

  1. Delivery time - 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. Please note that the global COVID-19 pandemic has generally increased delivery times.
  2. Delivery volume/quantity of order - 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 for larger volumes sea freight is usually 4-6 times cheaper than air freight. It is not likely that price of your cargo will increase substantially, if you increase the volume. Please note that the cost of air freight has increased due to the COVID-19 pandemic, although this is likely to change once passenger flights are fully operational again.

The global COVID-19 pandemic has created logistical challenges for exporters in developing countries. Delays and higher transport costs are two of the main challenges facing exporters. For example, a European importer of turmeric commented that “we have experienced higher transportation costs”. Challenges for exporters are likely to continue for the foreseeable future as different states and governments around the world tackle COVID-19 with various measures.

Goods imported to the EU must be insured, with the buyer usually being responsible for insurance.

Tips:

  • Keep in mind the three important factors of delivery time, volume and cost when determining which delivery terms are the most suitable for your business needs. Remember there will be tensions and trade-offs, particularly when you are doing business for the first time with a European buyer.
  • Visit the Freightos website and use the Freightos freight calculator to get instant international freight rate price information for shipping freight by ship and air. Doing so will allow you to make a more informed decision before agreeing delivery terms with buyers.
  • Speak to your logistics provider about the implications of COVID-19 before you agree delivery terms with European buyers, as delivery times could be longer due to lockdown and quarantine measures.
  • See the CBI study on tips for organising your export of natural ingredients for health products to Europe, which provides guidance on delivery terms used in this sector.

What are the requirements for niche requirements markets?

Organic ingredients

Across Europe there is growing consumer demand for organic products, a trend expected to continue. Many buyers are therefore demanding organic ingredients for their natural health products. As an exporter of turmeric you should therefore consider getting organic certification , as it increases your chances of entering the European market.

To market your natural ingredients as organic on the European market, you must meet European Union regulations. You can find information on EU organic certification on the IFOAM website. Although the UK left the European Union in January 2021, the EU has agreed to recognise the UK as equivalent for organics until 31 December 2023.

Figure 2: EU organic logo

The official Organic label for organic products in Europe

Source: ec.europa.eu 

Tips:

  • Ensure you have a Certification of Inspection (COI) that is up-to-date to with the latest changes made by the EU, which came into force on 3 February 2020. This is because it is a mandatory requirement of the EU if you want to trade organic turmeric on the European market.
  • Inform prospective buyers if you already have a COI. You should also display it and the organic certification logo on your company website and marketing materials. This will make you more appealing to buyers. Phal Flor Export is a company in a developing country doing this.
  • Consult the ITC Sustainability Map for a full overview of certification schemes used in this sector.

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.

Figure 3: Logos of environmental and fair trade certifications

Logos of fair trade certifications


Source: Various

Tips:

  • Acquire verification and certifications that prove your turmeric for health products meets environmental and social standards. Doing so will help you find opportunities in the European market, as the demand for certified turmeric is increasing.
  • Inform prospective buyers about certification you have proving that you meet environmental and social standards and display this on your company website and marketing materials. This will make you more appealing to European buyers. Phal Flor Export is a company from Madagascar doing this.

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, China and Indonesia. 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 4 gives examples of turmeric products on the European market by end-user segments.

Figure 4: Examples of turmeric products on the European market

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

The global turmeric market is expected to be worth USD$ 1.3 billion by 2024. Europe is expected to be the fastest growing region, with a forecast Compound Annual Growth Rate (CAGR) of 16.6% until 2024. Increasing consumer awareness about turmeric’s health benefits is a key driver for this growth. Increasing life expectancy and the growing number of health-conscious consumers are other factors driving growth.

Turmeric is used in health products that boost immunity. According to industry sources, the demand for natural ingredients such as turmeric with immune boosting properties has increased during the COVID-19 pandemic, especially in Europe. Industry experts expect this to continue in the foreseeable future.

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.

As an exporter of turmeric in a developing country, you must provide European buyers with a product which is of the highest quality, as this is essential to the manufacturing of natural health products. Additionally, speak to buyers to find out if they have specific requirements concerning turmeric’s active properties, and consider meeting those requirements.

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.

Tips:

  • Familiarise yourself with turmeric’s nutritional profile and the beneficial health properties it offers to the health product industry. This is important because they are two of turmeric’s key selling points and European buyers often ask questions about this.
  • Read the CBI study on which trends offer opportunities or pose threats in the European natural ingredients for health product markets. This study gives you useful information about the European health products market as well as information likely to increase your chances of market access.
  • Visit trade fairs to test if the industry is open to your product, get market information, and find potential buyers. Trade fairs will also give you the chance to speak to end-users and distributors, and to gauge your competition, especially the way they are marketing their products. See the CBI study on tips for finding buyers in the natural ingredients for health products sector for an overview of trade fairs in this sector.

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

Figure 5 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 5: Export Value Chain for Turmeric

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.

Tips:

  • Be prepared to send high-quality samples to prospective buyers, who will test your samples to assess whether you are a credible exporter of turmeric. Doing so will give you an advantage when you are seeking to enter the European market.
  • Consider expanding your turmeric product range, for example by adding organic turmeric. This will probably increase your chances of entering the European market, as some importer/distributors only import organic products.
  • Be prepared to meet prospective buyers who are interested in purchasing larger volumes if you are in a position to do so.

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.

Tips:

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

Eurostat data from 2019 showed India was the largest exporter to export turmeric to Europe in terms of volume. Following India, Eurostat data showed that Peru, Madagascar, Thailand, China and Indonesia 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. In addition, the Andhra Pradesh state government is supporting farmers with the cultivation of turmeric with high-quality curcumin content.

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. The global COVID-19 pandemic has caused disruption to supply chains, creating several challenges to Indian producers and exporters of turmeric. For example, one exporter of turmeric stated: “we had some logistical problems getting goods from factories to ports… some areas of India have restrictions and so transportation has been an issue”.

Adulteration, along with the likely impact of COVID-19, particularly higher transport costs and longer delivery times, will probably affect the perception of European buyers. This is because buyers expect a high-quality product delivered on time at a reasonable cost.

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 the negative impact of COVID-19 on its agricultural sector, particularly disruption to supply chains, inadequate infrastructure and widespread corruption. European buyers perceive Peru favourably due to its favourable business climate.

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.

From 2008 to 2018, Madagascar’s exports to the EU more than doubled due to an improved trade and investment climate, along with its trade agreement with the EU. This is likely to have a favourable impact on the way European buyers perceive Madagascar.

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.

The COVID-19 pandemic has caused disruption to international supply chains, particularly longer delivery times and increased transport costs because of quarantine and lockdown measures. COVID-19 is a challenge for Thailand’s agricultural sector. In an interview, a European buyer of turmeric from Thailand stated that “we have experienced higher transport costs”.

European buyers of Thai turmeric have a favourable perception of Thailand. One buyer commented in an interview that their overall experience of importing turmeric from Thailand has been “very good” because “it’s been quite straightforward” as they “haven’t had any issues”.

China

China’s key strengths include it having suitable conditions for turmeric cultivation and high levels of infrastructure, which is essential to exporting goods successfully. China’s other strengths are its government support for its agriculture sector, for example through the provision of subsidies, and market price support programmes. As a result, it may become easier for Chinese turmeric producers to export to the European market.

However, Chinese producers of turmeric face challenges, such as a loss of agricultural land, declining soil quality and pollution. Recent research revealed that European perceptions of China have been worsening in recent years, and have worsened further since the start of the COVID-19 pandemic.

Indonesia

Turmeric is widely cultivated in Indonesia due to it having favourable conditions for its cultivation; this is one of Indonesia’s key strengths. In recent years Indonesia’s government has been developing its agricultural industry, and it has made commitments to continue doing so; this is another of Indonesia’s key strengths. Thus, it may become easier for Indonesian producers to enter the European market.

However, compared to countries such as India, which dominates the global production of turmeric, Indonesian exporters may not be capable of supplying large volume orders. This is likely to affect the perception of European buyers requiring larger volumes. Other challenges facing Indonesia include climate change, its high exposure to natural disasters and a lack of infrastructure, which can make it difficult to export goods.

Indonesia is a member of the regional trading bloc ASEAN. A recent study found 99% of EU business community members are either looking to expand or maintain their current level of trade and investment within ASEAN. This implies European companies perceive Indonesia favourably.

Tips:

  • Find out if your country has programmes helping exporters like you harvest, cultivate, process and export turmeric. Do this by contacting government ministries of trade in your country as they sometimes provide assistance to help you export your turmeric.
  • Consider joining the Global Curcumin Association because they offer a range of assistance to exporters of turmeric from developing countries like you.
  • Position yourself against competing countries. For example, turmeric adulteration is a key challenge the Indian turmeric industry faces, thus ensure your turmeric is unadulterated and notify European buyers of its higher quality compared to countries where adulteration is an issue.

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. As a result, European buyers are likely to perceive these companies positively.

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 European Union (EU) Organic, 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.

 The company has a range of turmeric products, for example organic turmeric powder with a minimum curcumin content of 2% and 4%, which gives it a wider prospective customer base. The company also displays a comprehensive and detailed product description which it displays on its company website. These are two of the company’s other key strengths.

Peruvian companies

IREN PERU is a Peruvian company exporting turmeric to the European market. One of the company’s key strengths is ability to export high-quality EU Organic certified turmeric. The company’s commitment to sustainability and responsibility towards people and environment is another of its key strengths. 

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.

Tips:

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.

Figure 7: Ginger

Ginger

Source: pilipphoto / Shutterstock.com

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.

Figure 8: Ginseng

Ginseng

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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.

Figure 9: Moringa

Moringa

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Tips:

  • Position yourself against competing products. Do this by highlighting key strengths for both your company and turmeric to European buyers, for example its high quality and the fact that consumers are familiar with turmeric. Additionally, see the CBI study on moringa to learn about its strengths and weaknesses.
  • Build a marketing story for your turmeric that places emphasis on its key strengths, for example its high quality as well as any certifications it holds. The Indian company Suminter India Organics does this, as it clearly informs prospective buyers about its turmeric strengths.

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. Prices for turmeric from India fluctuated in 2020.Pharmaceutical grade turmeric capsules are priced at (FOB) USD 60-100 per kilogramme. The development of turmeric prices will depend on weather conditions and market demand for turmeric.

Interviews with European buyers and importers of turmeric suggest that the market price of turmeric has increased since the global COVID-19 pandemic because of the disruption it has caused to supply chains. In particular in terms of increased transportation costs and delays in receiving orders. For example, an importer of turmeric from Thailand commented: “we have experienced higher transportation costs”. Disruption to supply chains is expected to continue because of lockdown and quarantine measures introduced during the COVID-19 pandemic.

Tips:

  • Factor in the implications of COVID-19, particularly increased delivery costs, in your price calculations. If you fail to do so, you could end up with financial loses.
  • Be open to offering discounts to European buyers who order your turmeric in bulk as they are used to receiving discounts when making larger orders. To avoid making loses, include discounts the discounts you offer in your original price calculations, so that you do not sell at a lower price than your cost price.
  • Monitor the price development of turmeric from India. If you cannot compete with prices from India, make sure the quality of your turmeric is high. This is how you can set yourself apart from your competitors.
  • Certification schemes can enable you to charge a premium for your turmeric. Ensure you can justify your price with relevant certifications.

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

Please review our market information disclaimer.

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