Curcumin supply escapes worst of coronavirus supply disruptions

Yesterday Indian Prime Minister  Narendra Modi announced the country’s existing stay at home order, which was put in place with little warning on March 25,  would be extended for another three weeks to May 3​​.  Among the provisions is the need to apply for permits for internal travel between municipalities and states. 

Raw material grown by thousands of small holding farmers

This raised the specter that the internal shipment of goods could be interrupted or delayed.  And it also posed the question of whether workers would find it difficult to get permits rapidly enough to keep manufacturing plants deemed to be essential running efficiently.  The speed with which Modi’s initial order was implemented left some of these questions up in the air.

Manufacturers of curcumin ingredients rely on thousands of individual small holding turmeric farmers to grow their crops. The fields are scattered across India, with a concentration in the southern states of Karnataka and Tamil Nadu.  But extraction facilities are generally located in and around bigger cities like Bengaluru and Pune, far away from where the crops are grown.  Unlike some other agricultural commodities, turmeric rhizomes don’t spoil quickly, and can be shipped long distances and held in warehouses for a period of time without declining in quality.

OmniActive Health Technologies is one of the suppliers that has been affected by the country’s anti virus measures. Sanjay Mariwala, managing director of OmniActive, told NutraIngredients-USA​ that the situation was a bit chaotic at first, but the country’s famously labyrinthine bureaucracy seems to have risen to the occasion.

“There was a bit of work to do on the turmeric markets, because famers were not able to move their stocks into the hands of traders,” ​Mariwala said.   OmniActive has its headquarters in Mumbai, but does its curcumin extraction in Pune, where it manufactures its CurcuWIN branded ingredient. The internal shipping situation was fairly quickly rectified, he said.

“I had reports from our plant that local industrial officials had reached out to help.  In two weeks time we can make this into a smooth functioning system,​” he said.

Mariwala said the workers at his company’s extraction facilities had been classified as ‘essential’ and so were allowed to go to work.  Still, the initial dislocations meant that the workforce was reduced in the early days, and the plant was only operating at about 60% of capacity for a time.

But he said the key point for supply of extracted curcumin ingredients is that the virus lockdown hit after most of this year’s crop had been harvested and much of it had already been shipped to its final destinations.

“We were having some challenges in getting workers to the plant, but we have ample raw material,” ​Mariwala said.  “And we have shipped what our customers need right up to the end of May.”​

Sabinsa: Cautiously optimistic for future

Shaheen Majeed, president worldwide of Sabinsa Corporation, which manufactures Curcumin C3 Complex and a range of other ingredients, said his company has made it a practice over the years of having adequate stock on hand to smooth out possible demand spikes. So the present crisis has not clouded the immediate supply picture.  Sabinsa, which is based in Bengaluru, contracts with farmers in Tamil Nadu to grow much of its turmeric raw material, but sources from other places as well.

“The majority of this year's turmeric crop has been harvested, dried, and processed into its first stage. Based upon where our remaining plants are located and the current state of affairs, we're reasonably confident that the remainder of the material we historically collect through May will come in as expected. With regard to the other herbal extracts we supply, we forward secured supply and are not anticipating any shortages based on forecasts. We'll continue to monitor and pivot as necessary. Thanks to our land expansions across the globe, we're no longer limited to only India for growing our materials. Our cultivation program has always been focused upon securing access to raw materials in the event of disruption, so we will be able to continue meeting our customers needs,” ​Majeed said.

Course of disease in country still unclear

Majeed said its impossible to predict how the crisis will affect the sowing of next year’s crop because the progress of the disease is still in its early stages in India.  As of today there are only about 10,500 confirmed cases and 358 Indians have died of the disease​​.  But the United States, with a population of about 330 million, now has almost 600,000 confirmed cases and more than 24,000 deaths.  Infectious disease experts believe the croweded urban conditions in India are even more conducive than they have been in places like New York City to the spread of an infectious agent like the new coronavirus.  It’s an open question how long Modi can keep the country’s more than 1 billion residents at home.  Whether his relatively early and extreme action will help to keep the ultimate number of infections in the country down remains to be seen.

“​The prime minister's unilateral lockdown decision took place rapidly, announced four hours before implementation, not allowing a great deal of time for planning and for India's 30 states and 548 districts to respond,”​ Majeed said.

“There's no doubt that we see challenges ahead, but we're committed to purchase what our farmers harvest and look to be supplying quality manufactured material for the short and long term.  None of us know for certain how these unprecedented difficulties will evolve. However, we’re confident that with the stock we have in our warehouses throughout the world and the steps we’ve taken in India to comply with the government’s requirements while still producing our ingredients, we can and will continue to deliver our products,” ​he added.

Mixed picture on exports

The picture of shipments of turmeric raw material and finsished goods out of India is mixed depending on whom you ask. Italian company Indena reports that it has what it needs to meet market demand.

“We are continuing to get the curcumin needed from India to produce our leading curcumin product MERIVA,”​ said Greg Ris, vice president of sales for Indena USA.

But R.V. Venkatesh, managing director at Gencor Pacific, which manufactures a branded curcumin ingredient called Hydrocurc, said shipments have been interrupted, though he was hopeful that it would be a temporary situation.

“There has been a disruption in exports because of logistical issues related to lockdown in India. We're hoping that commercial shipments and cargo movements will be allowed in the second half of April. We have sufficient stocks of the product in India as well as sufficient inventory in USA to meet current demand. Once the lockdown is lifted, we expect the supply situation to be back to normal,”​ he said.

“​There has been an increase in demand for turmeric ingredients as people are more concerned about health. There is an increased awareness and willingness to focus on adequate supplementation with the right ingredients for maintaining good health. Turmeric has the pride of place in such supplementation,”​ he added.