A small-business owner in India, whose family had been growing saffron for years, says it costs over Rs.3 lakh to produce a kilogram (14 pounds) of pure saffron. The average farmer in this region earns about Rs.40,000 in a day.
In South India, there are about 40,000 factories that make saffron for a few thousand households, according to Shailesh Chhayali, the head of the Mumbai-based Federation of Indian Textile Manufacturers, an industry body. (To get a sense of scale, the U.S. produces nearly 30% of the world’s saffron, with exports totaling $3.4 billion a year.)
Saffron and other spices such as cardamom and turmeric are all on the rise, according to the Indian government, and India is now one of Europe and North America’s biggest consumers of spicy foods like spice blends, curry, pickles, ketchup, ice cream and pickle juice, and also a primary supplier of spices and herbs to the U.S.
Indian restaurants are serving saffron to diners, and some restaurants in the U.S. have begun offering saffron desserts. And the U.S. spice trade has long been dependent on India.
But as saffron continues to grow, the Indian spice industry is getting hit by an unexpected problem: the price of industrial saffron.
Saffron is an extremely expensive spice. The Indian government charges manufacturers around 35% more than the price of the natural plant.
So while the supply of saffron-flavored spices has increased by about 50% over a decade, the price of industrial saffron is falling by about 15% a year.
And though the industry hopes to keep the price of industrial saffron stable between about 80% and 90% of the average Indian farmer’s annual income, as long as the industry has to pay around 40% more than that for the raw material, there is nothing to discourage it from growing more.
According to the Federation of Indian Textile Manufacturers, the cost of industrial saffron in India is about $60,000 a ton.
“Once one starts working in Indian manufacturing, the costs do not change,” said Chhayali, who is from Mysore, a southern region of the country.
But some manufacturers say changing the price of
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