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Cassia, a pungent spice used in many cuisines, has seen a surge in its imports over the last few years. The facts that it is cheaper than cinnamon, a similar spice, and that more and more consumables are using cassia as an ingredient are only driving the demand for the spice forward. Despite controversies surrounding its usage in certain medicaments, it continues to be a favourite amongst India’s spice importers.

 

From turmeric to cinnamon, from cumin to fennel, India is known the world over for its spices that find use across cuisines as well as several home remedies. Surprisingly, despite its ubiquitous presence in almost all Indian households, cassia, better known as taj in India, is hardly grown in India and is almost entirely imported.

Cassia, whose bark is used as a spice, is many a time mistaken for the cinnamon bark. The two spices are however derived from two different plants of the same genus. With their similar appearance, you may ask what is in a name? Well, there is a lot that differentiates the two. While cinnamon, (often referred to as Ceylon Cinnamon) found in Sri Lanka, is derived from the branches or bark of Cinnamomum Zeylanicum, cassia is derived from the bark of Cinnamomum Cassia. Cassia is also known as Chinese, Vietnamese or Indonesian Cinnamon, depending on its origin.

Cassia is mistaken for cinnamon

Cassia is many a times mistaken for
cinnamon as they look very similar.


The other difference is that cassia is more pungent and preferred in Indian curries and bakery items. Cinnamon, on the other hand, has both a sweeter taste and aroma than its cousin. Cinnamon finds use in several desserts as well as pharmaceutical products. Another difference between the two is the controversial coumarin content. Coumarin, according to Food Safety and Standards Authority of India (FSSAI), is a natural flavouring compound whose high dose is believed to be harmful. While cinnamon or ‘Ceylon Cinnamon’, contains little to no trace of coumarin, cassia contains high doses of the same. Despite health concerns being raised, there is still a large demand for cassia. So, what makes the product popular in the market and does the increasing demand make importing it a lucrative business?


It’s getting spicier


Globalisation has meant that there is much more intermingling of cultures now than in the past and that has meant that people are more open to trying recipes from other countries. That has in tandem meant that import of spices has increased across the globe. According to a study by P&S Market Research, the global demand for seasonings and spices is expected to grow at a CAGR of 4.9% between FY2015 and FY2020. The imports of cassia by India has also kept pace with the global trend and grown by almost 110.3% to $45.32 million between FY2012 and FY2017. The volume of cassia imported by India has also increased by 20.07% during the same period. Even when it comes to the total world imports of cassia, imports by volume has increased by over 80% between CY2012 and CY2016. Some big numbers, indeed!


Talking about the reasons behind the increase in imports, Prashant Sethi of Jaipur-based August Industries, an importer of cassia, says, “There is a bit of cassia being grown in India in the southern part of the country, but the production is not enough to fulfill the growing domestic demand. As the usage increases, we expect imports to grow further.”


Cassia, according to some, has also benefitted from the confusion between cinnamon and cassia. Cinnamon is used in a variety of ayurvedic preparations to lower blood pressure and control cholesterol. But the cinnamon being referred to here is Ceylon Cinnamon and not cassia. The low price of cassia and the lack of awareness about the difference between both spices has allowed some unscrupulous manufacturers to substitute cinnamon by cassia in ayurvedic products. In reality, while cassia finds use in cooking and baking, it does not possess the healing properties that are characteristic of cinnamon. As smaller quantities of cassia are used in cooking, the harmful effects of coumarin are not an issue.

Cassia and cinnamon have long been under the watch of the Food Safety and Standards Authority of India (FSSAI). In fact, in November 2016, FSSAI released a document highlighting the differences between the two to avoid the confusion amongst their users. According to the document, to be classified as cinnamon the coumarin content should not be more than 0.3% by weight.

The quality challenge



India is currently the leading importer of cassia in the world with a 30% share in world imports followed by US, Bangladesh and Japan. The biggest source of imported cassia for India is Vietnam – the country currently fulfils about 86% of India’s total import requirement – followed by China and Indonesia.

Even though there are large quantities of cassia being imported into India, importers like Gopaal Ahuja, Chairman of the Mumbai-based Komal Exotic Spices, says that finding exporters who follow proper quality standards is a challenge. He explains, “As an importer, I face the challenge of getting my cassia cleared by the FSSAI, as cassia are not completely dried by some Chinese exporters before shipping. And by the time the shipment reaches us, the moisture from the products evaporates and recondenses on the goods in the container, leading to the formation of fungus. Fungus on vegetable products leads to the formation of aflatoxin which is a harmful carcinogen.” This is one of the reasons, Ahuja says, why many importers like him do not prefer to import the commodity from China. Exporters, he says, need to adhere to the rules and regulations and not resort to shortcuts. It is also difficult to make out the quality in the consignments that come from China as they are bundled, pressed under a hydraulic press and tied together with a belt. Many a time, exporters say, they have found various impurities including pieces of plastic within the cassia consignment.

Imports from Vietnam, on the other hand, do not have such issues as they are packed in a transparent box and not pressed into a bundle making it is easy to inspect for impurities. He however adds, “If Vietnam starts following China’s example, we may be forced to find a new supplier from Indonesia or may even reduce our imports.”

Rajiv Jaiswal, Head – Exports and Imports, Raj Exports, differs and says that when it comes to quality, there is not much difference between the Vietnamese and the Chinese products. Any difference in quality, he says, has to do with the supplier, as at the end of the day the climate and geographical location of both countries are similar.

Another reason why Vietnam is preferred over China has been the absence of an import duty on imports from Vietnam. Under the FTA with the ASEAN nations, Indian importers do not have to pay an import duty while importing from Vietnam and Indonesia which are both members of ASEAN. Importing from non-FTA countries like China on the other hand means that the product suffers a total duty of about 36%, making Chinese variety of cassia uncompetitive in the domestic market.


Spreading aroma



Despite the challenges arising out of customs clearances and food safety regulations, importers are upbeat about the future of the business. Ahuja says that expectations for a growth in demand in the future has a lot to do with the rise in incomes and changing food habits of people. The upwardly-mobile population has taken to consuming a number of sweet and savoury items that require the use of cassia. Cassia is also a part of many Chinese recipes that have found favour with Indians.

Scant domestic availability, absence of import duties, and ease of import in addition to good marketing by Vietnam has attracted more importers towards cassia. “Many Indian traders, who were earlier my clients, have started to import cassia by themselves,” says Ahuja.

Currently, importers have to pay a 5% IGST. Ahuja says that IGST has impacted their working capital and hopes that the government is able to introduce an e-wallet scheme similar to the one that is being introduced for exporters. He explains, “The way the finance minister has declared the creation of the e-wallet for exporters, an e-wallet can be created for importers as well. This way, the GST credit, that we have, can be used to pay IGST when we import the next consignment of goods.” Sethi however believes that the introduction of GST has been beneficial as it has reduced paperwork.