Ethylene Oxide Controversy: The Impact on India's Spice Exports

India is one of the largest global exporters of spices such as pepper, cardamom, chili, ginger, and turmeric, driven by rising global demand for Indian products, increasing consumer preference for organic and natural products, and the widespread popularity of Indian cuisine. According to the Spices Board of India, the country exported 1.54 million metric tons (mmt) of spices and spice products in the 2023/24 fiscal year (FY), valued at USD 4.46 billion. This marks a 10% increase in volume and a 12.91% rise in value compared to the 2022/23 season. These statistics highlight India’s dominance in the spice industry, which is characterized by a rich heritage, diverse spice varieties, and a strong international presence.

International Trade Centre (ITC) Trade Map data indicates that India's spice shipments of HS code 0910 in 2023 were primarily destined for Bangladesh, with 78.98 thousand metric tons (mt), a 6.8% year-on-year (YoY) decline. China was the second-largest destination with 28.13 thousand mt (+7.67% YoY), followed by the United Arab Emirates (UAE) with 26.26 thousand mt (-18.01% YoY), the United States (US) with 20.44 thousand mt (+4.74% YoY), and Morocco with 15.63 thousand mt (-14.71% YoY). This diverse market presence underscores India’s robust growth and its significant role in the global spice trade.

Figure 1: India’s Spice Exports from 2014 to 2023

India’s Spice Safety Concerns and its Implications on Trade

Despite India's significant contribution to the global spice trade, recent safety concerns have emerged regarding its spice products. Reports of adulteration and the presence of harmful elements, such as ethylene oxide exceeding permissible levels, have highlighted these issues. Ethylene oxide is typically used for microbial control, pest elimination, preservation, and maintaining the quality of spices by retaining their color and flavor. However, excessive use of ethylene oxide poses health risks, as the International Agency for Research on Cancer (IARC) classifies it as a Group 1 carcinogen with a high likelihood of causing cancer. These safety concerns have led to bans, restrictions, and heightened inspection protocols for Indian spices in various markets.

In Apr-24, Singapore and Hong Kong banned the sales of some spices produced by Indian companies, MDH and Everest, over suspected elevated levels of ethylene oxide. The banned products include MDH Madras Curry Powder, MDH Sambar Masala Mix Powder, MDH Curry Mix Masala Powder, and Everest Fish Curry Masala Powder. Notably, MDH and Everest spice products are popular both domestically and globally, with a strong presence in Europe, Asia, and North America. Following suit, Nepal also banned the sale and import of these products in May-24 due to similar quality issues.

Figure 2: MDH Madras Curry Powder

Figure 3: Everest Fish Curry Masala Powder

In addition to these bans, other countries have increased their inspection protocols and launched investigations into Indian spice products. For example, the US Food and Drug Administration (FDA) began investigating MDH and Everest spices after Hong Kong halted sales of some of their products for allegedly containing high levels of ethylene oxide. The FDA reports that an average of 14.5% of MDH spice shipments to the US have been rejected due to the presence of bacteria since 2021. This statistic highlights ongoing concerns about the quality control of Indian spices.

Other countries currently investigating these flagged products include Australia, the United Kingdom (UK), the Maldives, and New Zealand. The European Union (EU) has also raised concerns about excess levels of ethylene oxide in samples of chili peppers and peppercorns from India. The EU has set a limit of 0.1 milligrams per kilogram (mg/kg) for ethylene oxide, but the levels found in the Indian products exceeded this threshold.

In response to these concerns, MDH stated that its products are safe for consumption, asserting that it does not use ethylene oxide at any stage of storing, processing, or packing their spices. Similarly, Everest emphasized that its products are safe and of high quality, noting that only one of its 60 products was held for examination.

The Indian government has responded to the contamination allegations by acting against Everest and MDH. It conducted inspections and recommended corrective measures. The Food Safety and Standards Authority of India (FSSAI) reported that it has ordered testing and inspections at all companies making spice mixes, widening the investigation into the sector. Additionally, India’s Ministry of Commerce and Industry mandated ethylene oxide testing for all spices destined for Hong Kong and Singapore from May 7, 2024.

Furthermore, India demonstrated its commitment to advancing development standards for various spices during the 86th session of the Executive Committee (CCEXEC) of the Codex Alimentarius Commission (CAC), held in Rome, Italy, from July 1 to July 5, 2024. These responses underscore India's dedication to ensuring the food safety and quality control of its spice products.

These quality issues in some Indian spices threaten the country’s spice exports. According to the Federation of Indian Spice Stakeholders (FISS), India’s spice exports could drop by nearly 40% YoY in the 2024/25 FY if the ethylene oxide contamination issue is not resolved soon. This forecast could materialize if the countries currently investigating, such as the US, Australia, the UK, the Maldives, New Zealand, and the EU, find that the levels of ethylene oxide exceed the required standards and proceed to ban the products.

A major concern is if top importing countries such as Bangladesh and China follow the lead of Singapore, Hong Kong, and Nepal. Such a scenario indicates that India could lose its market share on the global stage, allowing competitor countries to take advantage. For example, India’s competitors, such as Malaysia, China, Thailand, and Pakistan, could benefit from the bans imposed by Singapore, Hong Kong, and Nepal by heightening spice shipments to these markets to fill the supply gap.

Retailers in Singapore, Hong Kong, and Nepal seeking alternatives to the banned MDH and Everest spice products can consider several options. From Malaysia, notable brands include Adabi and Baba’s. In Thailand, Thai Pride and Lobo are recognized for their traditional spice mixes. Pakistani brands like National Foods and Shan Foods offer a wide range of spices. Additionally, Chinese brands such as Shanxi Vinegar and Spices and Lee Kum Kee provide various spice products suitable for Asian cuisines.

Figure 4: Adabi’s Chicken and Meat Curry

Local brands can also take advantage of this opportunity by aligning with consumer preferences. In Singapore, Prima Taste and Chng Kee's are popular choices. In Hong Kong, Amoy and Tai Ma are well-known for their traditional flavors. In Nepal, Apsara Chilli and Himalaya Spice cater to local tastes. These domestic brands are well-positioned to meet the increased demand for safe and high-quality spices in these regions.

Figure 5: Prima Taste Curry La Mian

In conclusion, India must address the current quality issues to safeguard its spice exports and maintain its dominant position in the global spice market. The FSSAI should ensure regular and comprehensive testing for ethylene oxide and other contaminants at all stages of production, storage, and packaging. Additionally, investing in advanced testing equipment and techniques to detect contaminants accurately and efficiently is crucial. Global agencies such as the Food and Agriculture Organization (FAO) and the World Health Organization (WHO) should provide clear guidelines on the use of ethylene oxide in foods, including recommended permissible levels, to help manufacturers adhere to international safety standards.