Reasons Ginger Import is a Highly Lucrative Business

Ginger is a tropical plant that originated from Southeast Asia. Belonging to the family, Zingiberaceae, the root of this plant is the edible part.

It is usually propagated with the ginger seed, called a rhizome and it takes about 8 – 10 months to fully mature. Ginger packs a lot of heat due to the high amount of gingerols and shogaol present in it.

These give it its unique spiciness and distinct aroma which is one of the many reasons people love to cook with ginger. In addition to its use as a spice, ginger is used for the health benefits it delivers. Ginger oil is also used as a potent essential oil in aromatherapy and wellness.

Ginger Export and Import

India is the largest producer of ginger in the world. The warm climate in the southwestern and northeastern parts of the country are the most suitable for the growth of the plant. China is, however, the highest exporter of ginger churning out an average of 390 thousand tonnes annually. Other countries that export ginger include India, Nigeria, and Indonesia.

These countries export majorly to the United States of America, which is the world’s largest importer of ginger and countries in Europe. Ginger is exported as either fresh ginger, ground or dry ginger. The ground or dry ginger is less perishable so it is often the most preferred import form.

Over the past couple of years, ginger consumption all over the world has risen exponentially. This has reflected as an increase in the market price of ginger as well as a rise the amount exported.

In 2018 alone, approximately 3.3M tonnes of ginger were produced worldwide with about 564 thousand tonnes exported to other countries. As consumption of ginger has only been forecasted to grow within the coming years, ginger import stands as a highly lucrative business for so many reasons.

A lucrative business is one that fetches a lot of profit. For a business to fetch a lot of profit, one of the important factors is the market for it must be large enough. Certain trends have caused the market for ginger to grow in the past years.

Ginger is Healthy

The first is the fact that ginger is considered a healthy food ingredient. There is a new craze for healthy foods in the market right now as so many people are being conscious about what they eat. Sugar, salt and other toxic food additives are being cancelled by consumers due to the havoc they wreak on the body. Instead of consuming these, consumers are increasingly substituting them with healthy replacements like ginger.

Ginger is heavily marketed as a food that is beneficial to health. Research has shown it to relieve symptoms of cold and flu which is the reason for increased consumption in colder seasons.

Ginger also helps with stomach problems, combats the effects of stress in the body and improves heart health. Pharmaceutical companies, as well as beverage companies, have hopped on the ginger trend. Ginger is now being used in the production of other consumables in the form of supplements, teas and snacks.

Increase in the popularity of ethnic foods especially Asian cuisines

Another trend causing this market boom is the increase in the popularity of ethnic foods, especially Asian cuisines. Ginger originated from Asia and has been a staple in their kitchen for ages. Most of their foods have ginger incorporated in it one way or the other.

As consumers are becoming more adventurous in the types of food they eat, Americans and Europeans especially have embraced Asian foods. This has been attributed to the growing popularity of Asian cooking shows and an increase in tourism to Asian countries.

Steady rise in the number of Asian restaurants in Europe and America

There has also been a steady rise in the number of Asian restaurants in these countries. And as expected, this rise has made the people more exposed to these meals. What these trends translate to in market terms is an ever-growing demand for ginger. The restaurants, pharmaceutical and beverage companies, and consumers that decide to experiment with ginger all constitute a large market for the product. A savvy importer can take this opportunity and make a lot of money from this business.

Price of Ginger continues to gain on international markets

The price of ginger in the international market is steadily increasing. In 2020, Nigerian ginger saw a 30% increase in price on the international market.

A ton of ginger was sold for a price between 6,000 and 7,000 US Dollars. In the local market in Nigeria, the price stands at US$3,500. The profit margin per ton after such deductions is still large enough for ginger import to be considered highly lucrative.

Exporting dried ginger to Europe, requirements and buyers

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Europe is an interesting market for exporters of dried ginger. The demand is expected to grow in the coming years and prices are rising or relatively stable. China is the main supplier of both whole and ground ginger to Europe, and it is your main competitor on the European market.

 

1 . Product description

 

Ginger is the irregularly shaped root (rhizome) of the ginger plant (Zingiber officinale). The plant is cultivated in the tropics. The main producing countries are China, India, Nigeria and Peru.

Ginger is mainly used in:

  • oriental and Indian cooking;
  • bakery and confectionery products;
  • liqueurs.

The markets for fresh and dried ginger are closely connected, however, fresh ginger exports are even larger than dried.

Drying of fresh ginger generally takes place in the countries of origin.

Within the Combined Nomenclature (CN) classification, dried ginger is covered under the following codes.

  • 0910.1100: ginger, neither crushed nor ground
  • 0910.1200: ginger, crushed or ground

 

 

2 . What makes Europe an interesting market for dried ginger?

Growing imports of dried ginger in Europe

The worldwide consumption of ginger is increasing. The global and European market for ginger is expected to show significant growth until at least 2020. Consumers buy ginger during the winter because of its health properties. For example, consumers use ginger as a sore throat remedy. The growing ginger market in Europe provides opportunities for you as an exporter. Buyers are increasingly willing to invest in long-term relationships or collaborations with their suppliers to ensure sufficient supplies.

In 2017, the total European imports of dried ginger reached 160 thousand tonnes. Since 2013, the import volume has increased by 12% annually. The import value increased in that same period by 13% annually, reaching €250 million in 2017.

In 2017, more than 70% of the total European imports were sourced directly from developing countries. Please note that Figure 1 below excludes countries other than European or developing countries. In 2017, these other countries accounted for only 0.12% of the total European imports.

Since ginger cannot be produced in Europe, the European supplies illustrated in Figure 1 are based on re-exports. European re-exports accounted for 29% of the total imports in 2017.

 

 

The Netherlands, the United Kingdom and Germany are the most interesting markets for dried ginger in Europe

In addition, consumption includes the use of ginger in the food processing industry. This fact is important, since a large share of ginger is used in this industry; namely for bakery products (such as gingerbread and cookies), Asian food products and various drinks (e.g. ginger ale or ginger beer).

 

Interesting markets for you as an exporter include the following:

  • The Netherlands is the largest importer and trader of ginger in Europe. Its imports have increased significantly in volume by 13% annually between 2013 and 2017. In 2017, 97% of Netherlands imports were sourced directly in developing countries. The country has a high and relatively unstable per capita consumption. Since 2014, consumption increased significantly. This instability and sharp increase could be caused by the country’s important role as a trade hub for intra-European trade, since consumption is calculated as imports minus exports. While consumption is not expected to be that instable, imports and re-exports of ginger varied significantly during the last years, due to stockpiling. The volume of stock is not accounted for in these figures.

 

  • Since the United Kingdom sources 93% of its ginger from developing countries, it is an interesting export market for your products. The country is also the second largest importer of ginger in Europe, which could be caused by the relatively substantial population of Asian descent. Its consumption per capita is significantly higher than the European average and has been increasing slightly since 2014.

 

  • Germany is the third largest importer of ginger. Its total imports in volume increased by 14% annually since 2013. The German per capita consumption is slightly higher than the European average.

 

  • France is a large importer of ginger and its imports have increased in volume by 13% annually since 2013. In 2017, the imported volume in France reached 6,400 tonnes.

 

  • Italy is an important trade hub for ginger. Since 2013, imports of ginger in Italy have increased significantly by an annual rate of 39%.

 

  • Spain is a fastgrowing market for ginger. Imports into the country increased by 29% between 2013 and 2017.

 

  • Many other smaller importers are increasingly importing ginger directly from developing countries over the last five years. Examples are Portugal (growing by 33% of imports annually), Austria (25%), Sweden (20%), and Poland (17%).

 

 

Local value addition is becoming more important

European exporters or re-exporters add value to dried ginger by further processing and packaging. However, the processing of ginger is also done in the country of origin. Especially heat treatments, such as steam sterilisation, are becoming an important buyer requirement.

 

 

Supplies of ground ginger are relatively low (8% of the total ginger imports in 2017) but the volume increased on average by 10% annually between 2013 and 2017.

China has been excluded from the figure, as its supplies are out of proportion compared to the other supplies. Of all ground ginger imported from developing countries, 29% comes from China. However, China still mainly exports whole ginger to Europe.

Several countries have increased their exports of ground ginger to Europe. Between 2013 and 2017 Peru’s exports to Europe increased from 1.4 tonnes to 285 thousand tonnes (+280% annually), Indonesia’s by 45%, Thailand’s by 26% and Burkina Faso’s by 280%.

 

 

Search for healthier ingredients

The growing demand for dried ginger on the European market is stimulated by consumers searching for healthier ingredients.

Healthy living is one of the most important trends in Europe. Consumers perceive food ingredients such as salt, sugar and synthetic additives as unhealthy. These products are increasingly replaced by other products that also add flavour, such as spices and herbs.

Consumers use dried ginger for its promoted beneficial effects to health. For example, journals and food bloggers state that the consumption of ginger helps with digestive problems, the flu and stress.

Dried, ground ginger is sold by retailers in the spices segment; for example:

Due to its popularity, ginger is also increasingly used as a health supplement as well as in other food products such as tea and snacks. Examples are:

 

 

 

Growing popularity of ethnic cuisines

The demand for ethnic food in Europe is rising. Since dried ginger is an important ingredient in Asian dishes, it is becoming increasingly popular on the European market.

Examples of Asian recipes that are popular in Europe and that contain ginger are:

There are two main causes for the increase in the popularity of ethnic cuisines:

  • The multicultural population in Europe is growing. In 2014, 20% of newly immigrated Europeans were of Asian descent.
  • Other Europeans are increasingly interested in exotic cuisines. They are linked with the rest of the world through the internet and travelling. They can easily search for Asian recipes online and bring back recipes from their holidays to Asia.

 

 

 

Sustainability is on the rise

Sustainable sourcing is an important trend in Europe, especially in the United Kingdom, the Netherlands and Germany.

As a supplier, you will be increasingly faced with sustainability requirements from your buyer. Many buyers see sustainable sourcing as a must.

By certifying your ginger, you can proof your compliance with sustainable sourcing. However, certified ginger is still a niche market. It represents only a small section on the total European market for ginger. In addition, most buyers in the mainstream market are unwilling to pay more for certified products. As a result, it is important to discuss the opportunities for certification with your buyers before you become certified.

Certification does give you a competitive edge. For dried ginger, the main certifications are Organic and Fairtrade. For Organic certified ginger, the most interesting markets are Germany and the Netherlands. For Fairtrade certified ginger, the most interesting market is the United Kingdom. However, ginger represents only 3% of all spices and herbs certified by Fairtrade International in Europe (31 tonnes in 2015). Such data are unavailable for organic ginger.

 

 

3 . Which requirements should dried ginger comply with to be allowed on the European market?

You can only export dried ginger to Europe if you comply with buyer requirements for spices and herbs. Below, you will find more information on requirements that are specific to dried ginger.

Legal requirements

When exporting dried ginger to Europe, you have to comply with the following legally binding requirements.

  • Food safety: traceability, hygiene and control as specified in the General Food Law;

 

  • mycotoxins contamination: for ginger, the maximum level of aflatoxin is between 5.0 μg/kg (aflatoxin B1) and 10 μg/kg (total aflatoxin content B1, B2, G1 and G2). For ochratoxin, the maximum level is 15μg/kg;

 

 

  • microbiological contamination: your ginger is banned from the market if salmonella is found;

 

  • food additives and adulteration: spices and spice blends are rejected by custom authorities if they contain undeclared, unauthorised or excessive levels of extraneous materials;

 

  • maximum levels of polycyclic aromatic hydrocarbons (PAHs): contamination with PAHs stems from bad drying practices;

 

  • Irradiation: this process is allowed but not commonly used.

 

 

European buyers are increasingly requiring their suppliers to use steam sterilisation in order to combat the microbiological contamination of ginger. You could earn a significant premium if you can supply ginger that is sterilised at the source. However, investments in the necessary equipment can be very costly, at up to € 1 million.

Research is being conducted into alternatives to steam sterilisation, as this treatment negatively affects the taste of ginger. Currently, it is still the cheapest and safest method to combat microbiological contamination.

 

 

Additional requirements

Consider complying with the following non-legal requirements to ease market access. European buyers can use these requirements as selection criteria.

  • food safety certification as a guarantee: the most important food safety management systems in Europe are British Retail Consortium (BRC), International Featured Standards (IFS), Food Safety System Certification 22000 (FSSC 22000) and the Safe Quality Food programme (SQF). Always verify your buyer’s preference for a specific food safety management system, as some may prefer one system over the other. For example, BRC is developed by retailers in the United Kingdom and more commonly demanded on this market. If you want to target the United Kingdom, BRC may be more important;
  • Corporate Social Responsibility (CSR): companies have different requirements for CSR, such as signing their code of conduct or following common standards including the Supplier Ethical Data Exchange (SEDEX), Ethical Trading Initiative (ETI) or the Business Social Compliance Initiative code of conduct (BSCI).

 

Requirements for niche markets

If you want to enter a nice market such as organic of Fairtrade, it is essential that you comply with the following standards.

  • sustainable product certification: the major certification systems are Organic, Fair Trade and Rainforest Alliance;
  • selfverification: suppliers assess their own compliance with the sustainability code of buyers. Examples include Unilever’s Sustainable Agricultural Code (SAC) or the Olam Livelihood Charter.

 

Quality requirements

Product quality is a key issue for buyers in Europe. You need to comply with the Quality Minima Document published by the European Spice Association (ESA). This document is leading for the national spice associations affiliated with the ESA and for most key buyers in Europe.

The Quality Minima Document specifies the chemical and physical parameters dried that ginger needs to comply with when sold in Europe before crushing and grinding (after drying).

  • ash: maximum 8%
  • acidinsoluble ash: maximum 2%
  • moisture: maximum 12%
  • volatile oil: minimum 1.5 ml/100 gr
  • SO2: maximum 150 ppm

The ESA has not developed cleanliness specifications. As a result, European buyers often use the specifications for cleanliness stated by the American Spice Trade Association (ASTA).

 

 

 

Labelling requirements

Correct labelling is important for European buyers. To this end, pay extra attention to labelling your product.

For bulk ginger, you have to include the following information:

  • the name of the product
  • details of the manufacturer (name and address)
  • batch number
  • date of manufacture
  • product grade
  • producing country
  • harvest date (month-year)
  • net weight.

Other information that exporting and importing countries may require include the bar, producer and/or packager code, as well as any extra information that can be used in order to trace the product back to its origin.

 

 

Packaging requirements

For shipping, bulk whole dried ginger roots should be packaged in jute sacks (36-65 kg). It is less common but also possible to pack the roots in wooden boxes or linen corrugated cardboard boxes (60 kg).

Ginger processed in the form of slices or powder is packaged in multi-wall laminated bags of different weights ranging from 1 to 25 kg. Common weight classes are 12.5 kg and 25 kg.

 

 

4 . What competition do you face on the European market for dried ginger?

Your main competitors are other suppliers from developing countries. In 2017, these suppliers exported 113 thousand tonnes of dried ginger to Europe, accounting for €153 million. Of these imports, 93% was whole ginger.

China is Europe’s main supplier of ginger and also your most important competitor. The country accounted for 79% of all supplies from developing countries to Europe in 2017.

Other suppliers of ginger from developing countries are:

  • Peru (11% of total supplies by developing countries in 2017)
  • Nigeria (3.2%)
  • Brazil (2%)
  • Thailand (1.7%).

Peru’s market share has increased significantly, though its supplies are small compared to China.

Fresh ginger is an important substitute for dried ginger. Fresh ginger is used for cooking, at home or in restaurants, and in food and beverage manufacturing.

The production of ginger in China is mainly mechanised. Other small suppliers, such as Peru, conduct their production manually. As a result, China is able to produce and export large quantities of ginger compared to the other suppliers from developing countries. This fact makes it difficult to compete with China if you are a smaller supplier. If you want to compete with China, you should be able to:

  • deliver stable supplies of ginger, both in quantity and in quality;
  • comply with delivery times;
  • comply with food safety requirements.

You can also explore opportunities on niche markets such as organic and Fairtrade, or for specific applications such as beverages, which have specific requirements.

If you want to sell your ground ginger to Europe, you are competing directly with European processors. Your buyers could ask you to provide the same service as European re-exporters. You will have to make sure that you comply with their requirements such as short supply times and steam sterilisation.

 

 

 

5 . Through which channels can you get dried ginger on the European market?

See our study of Channels and segments on the European market for spices and herbs. The channels for ginger do not differ significantly from those for other spices and herbs.

 

6 . What are the end-market prices for dried ginger?

Ginger is an annual crop. Its prices fluctuate between one harvesting season and the next. The price of dried ginger also depends on the price of fresh ginger.

In early 2018, dried ginger prices were relatively stable, in combination with ample supply of good quality ginger. In the beginning of 2017, international prices  ranged between US$ 6,000 and US$ 7,000 per tonne.

Global market prices for ginger are strongly influenced by the largest producer of both fresh and dried ginger, China. However, traders often prefer ginger from more expensive suppliers in Peru and Brazil, for example. They prefer these suppliers because of their higher quality.

Figure 5: Indicative price breakdown for ginger

 

Figure 5 gives an indicative price breakdown for ginger. European retail prices for ginger are much higher than global trade prices. However, exporters from developing countries do not necessarily profit from these trade prices. European processors and retailers add large price margins.

The margins that you can receive as an exporter may differ. These margins are influenced by various factors such as:

  • Country of origin;
  • Current and expected future harvest situation;
  • Quality of the raw material;
  • Level of processing;
  • Level of demand;
  • Trends in prices.

Margins and profits can be higher for you as an exporter if you are able to add value locally. For example, by further processing or certification, you can create a competitive edge and benefit more.

 

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