Spices: “Favourable weather is the most important factor”

Which were the main difficulties faced by the spice markets in 2025? What has changed compared to the last two years?

Observing the dynamics of the whole year 2025 there were plethora of obstacles in the spice market. Superficially we can divide the difficulties into two categories, one related to production and the other to domestic and international trade.

Production Problems:

Crop Loss & Lower Yields: Due to unfavourable weather there were lots of damage and economic losses to cultivators.

Pest Management and ETO: There were incidences of diseases on the crop due to improper pest applications and ETO treated crop faced rejections in Europe and other territories.

Input Cost: The cost incurred for the high-quality seeds, casual workers, fertilizers and cultivation expenses saw sharp increase in 2025. Hence, the viability of cultivation for some of the spices decreased, as the rates were stagnant or declining throughout the year.

Trade Problems:

Freights and Logistics: The volatility in the freights due to geopolitical disturbances forced major importers to buy in small volumes and at regular intervals. After the attacks of Houthi in the Red Sea, the shipping lines had to divert their vessels through other routes like the Cape of Good Hope. Therefore, such a scenario brought a steep hike in the freight costs, tightening the capacity of importers to stock the goods.

Trade Policies: Overnight changes in the trade policies, for instance the USA implementing tariffs on Indian goods, disrupted the trade and reduced the export quantum to the minimal levels.

Zooming the dynamics of past two to three years, each year there were one or two commodities which showed capricious movements. In 2022, cilantro skyrocketed by 40 to 45% but then settled again to the base level. Cumin broke all the roofs by taking 50% increment and created a new benchmark, while turmeric declined by 15%. In 2023, cumin prices almost doubled, coriander depicted degrowth by 16 to 18%, and turmeric made a record-breaking progress as the rates took an 80% leap in the duration of two months in July and August. Similarly, 2024 kept coriander steady, cumin fell by 40% and turmeric grew by 35%. One can easily see that most of the game was played by a cluster of giant stockists and such sudden curves were not the reflection of real trade.

However, 2025 ended all the artificial strategies of big groups and brought the fact on the ground. The market saw practical corrections, as per the demand and supply ratio. So, the major change of 2025 compared to the previous two years is that none of the gimmicks of playing with trade could work, neither the prices could be hyped nor could be suppressed.

Geopolitical tensions are an ongoing issue.

How did the import tariffs on shipments to the USA impact the spice trade?

Pertaining to the sudden implementation of tariffs from the USA, the impact may not be deep on the spice exports from India. There are a few supportive factors which can cover up the void surged by tariffs. First, except black pepper and cardamom, which has a share of above 30% of exports to USA, other commodities like cumin, coriander and turmeric have a volume between 7 to 12%. Second, India has signed several Free Trade Agreements (FTA) with many nations, so the export trade will get the necessary encouragement.

Were there any noticeable drawbacks on the trade with Russia when it comes to spices? Or did Indian traders actually benefit from the trade restrictions imposed by Western countries?

As far as the spice trade is concerned there are no major drawbacks due to the trade between Russia and India. The only factor which is a little disturbing is the bank level transactions. Currently, due to sanctions on Russia, India and Russia cannot deal with dollars and local currency transactions are taking long time to generate a Bank Realization Certificate (BRC) from the Reserve Bank of India.

Considering the trade restrictions imposed by western nations, India got massive benefits. In various sectors where Russia was purchasing goods from Europe and America, India commenced to penetrate various other sectors. Not only the spice trade but other segments like automobile, ceramics and machineries.

In 2025, some of the spice markets were once again hit hard by unfavourable weather conditions. Which ones were particularly affected? And how can growers and market players act to be prepared for the coming years?

Favourable weather is the most important factor for any crop cultivation. The spice cultivation was affected to higher extent in various states due to heavy rainfall. In Kerala, nearly 48.000 hectares of land were damaged and various spices like pepper, cardamom and turmeric had less output. Similarly, in Karnataka pepper production dropped by 20 to 25%. Also, Maharashtra’s prime area for turmeric cultivation called Marathwada was confronted with heavy rainfall and yield downsized by a noticeable margin. 

There are several steps which can be taken to prevent crop losses. The Indian Meteorological Department should provide timely updates about weather changes. Furthermore, the government can also give training to the farmers as to how to take precautions and protect the crop from extreme weather conditions. Also, small farmers should be provided with the necessary infrastructure and equipment to ensure that with minimum work force the crop can be safeguarded.

Commodity prices have risen significantly in many markets, some being at all-time highs or close to. Inflation, yield loss and higher production costs are leaving their mark; the prices for spices show a mixed picture here. Which price developments were particularly striking or unusual?

Zooming the peaks and troughs of the current year, all the spices are showing either firm steadiness or degrowth. Cumin showing major degradation, coriander and turmeric are also under attrition. Black pepper standing at the same level as in 2024 and cardamom is depicting slight appreciation.

Factors like yield loss, inflation and increased production costs are thinning the farmers profits, but are unable to create any surge in prices, due to two prime reasons. First, the carry-over stocks are high enough to suffice the consumption ratio, irrespective of additional costs and weather induced damage. Second, global competition has kept the prices within limits, many nations have started cultivating spices which were never grown there and enhance the production by employing modern technologies.

Looking at the current market situation, what challenges might the spice markets face in the upcoming year 2026?

From the helicopter view, if the charts are studied considering the past and the current year and next year predictions, then on the price level no major change can be anticipated. Because on the international front importers have made a mindset of procuring for the needed quantities and not opting for storing large stocks. Further, for the domestic front there are few probabilities of any massive demands as every commodity is in ample stock and giant traders are not preferring to take any risk due to price attritions.

Moreover, there are two main challenges on the future roadmap of spice trade. One, because of unpredictable weather and delay in the season, sowing and cultivation can get disturbed. Second, the global demand and supply ratio will remain balanced, hence except some miniscule hikes, overall prices will remain range-bound or display weakness.

Lastly, there are major obstacles from the overnight changes in trade policies and geopolitical tensions. However, the global market has already confronted recession time past two years, so now it seems that next year the situation should calm down and international trade will get streamlined.