SPICES TRADE - CONSIDERATIONS ABOUT 2021 YEAR - TRENDS FOR 2022

If 2020, confined us to our homes, 2021 allowed us some freedom and many challenges in our efforts to return to the normalcy of pre-pandemic. 

THE CONTAINER

This metal box, the basic clog in the global supply chain system became the most sought after and premium component in 2021. As freight rates reached dizzying heights, finding suitable food grade empty containers at origins became a treasure hunt and in the end stages highest bidding auction situation for exporters, as shipping lines raked in billion $ profits.

The spices trade was faced with disrupted supply chain issues - farmers and planters inability to take care of crops and plantations due to lockdown restrictions and/ or reduced labour forces and weather challenges 2021, also demonstrated the inherent highly volatile nature of the spices trade. 

Many spices showed a sharp price spike on fundamental reasons but were unable to maintain the high levels due to the unstable demand situation across the globe. 

The hand-to-mouth buying trend visible in 2020 continued in 2021 and looks to be approaching the just-in-time buying philosophy, propagated by the Japanese in 2022. Extreme risk aversion is now a dominant theme, and it will only spread across major importers/buyers as new variants and vaccination protocols emerge.

For India as a major spice origin, the challenge lies in providing pesticides controlled spices, as more and more countries become stringent in their  requirements. As on date, it does look like a Herculean task unless government agencies work together with private players.

Currencies remained volatile as ever, (special mention for the Turkish Lira, which gave strong competition to the cryptocurrency markets) with the US FED continuing to print USD and dropping hints of tapering in 2022. 

With Chinese New Year in early February, Ramadan starting from early April and the big behemoths buying during the first couple of months for their yearly requirements - we expect a lot of volatility and good demand for most spices up to April, 2022 - by when hopefully also the Omicron situation will stabilize across most countries.