Saffron - The Costliest Spice On Earth Costs Rs.2 Lakh / Kilo

It's almost as costly as gold and as lucrative a commodity to smuggle. The rich and the blueblooded around the world have loved it for millennia. The richest country in the world, the United States, loves it so much that even (clandestine) imports from Iran are okay. India's elite loves it, too, and it provides the most pleasing link between politically troubled Kashmir and the rest of the country.

It's, therefore, a super-premium product that trumps geopolitics. So, what is it? More clues. Cleopatra bathed with it, Alexander the Great used it to heal battle wounds, it adds that special touch to Indian biryani and Italian risotto, to super premium cakes and lavishly cooked kheer, and it enhances the quality of your skin as well as that of your sex life - if you can afford the Rs 2 lakh/kg price tag.


It's saffron, the world's most expensive spice. Its economics is made for super premium pricing and, when it intersects with global politics, it also produces a fascinating underground trade. 

Iran produces 95 per cent of the world's saffron. India, along with Spain, Italy, Greece, Morocco and Ajerbaijan, produce the rest. Kashmir is India's only saffronBSE -4.85 % producing centre and thanks to floods this year, is facing a possible 75 per cent shortfall in production of the spice. It takes 1 lakh flowers to produce 1 kg of saffron, and output is typically just half a kg per hectare. 

That kind of production norm, plus the fact of Iran being the biggest saffron producer, means two things. First, there's always excess demand for saffron and prices always remain high. Second, given sanctions on Iran and high demand from the US, non-regular trade in saffron thrives. Saffron smugglers are called pigeons in the trade and the fact that metal detectors are of no use against this pricey spice is an incentive for non-regular saffron supply chains. 

Those who know saffron trade say Iranian saffron is bought by traders in countries like Dubai and then shipped to other parts of the world, including Canada. Canada to the US, with country of origin masked, is an easy supply route for saffron. Washington-Teheran tensions, a regular fixture in international relations, haven't stopped American consumers from getting their hand on Iran's premium quality saffron.

India, say saffron trade insiders, is no stranger to the spice from Iran coming through non-regular trade routes. India imposes a high duty on saffron imports. Iranian saffron prices can be almost 50 per cent less than Indian prices - the incentive for avoiding official channels is therefore high. Unsurprisingly, there's saffron ego - as in my saffron is better than your saffron claims. The world considers Iranian saffron to be premium quality. Saffron needs unpolluted environs to grow best and Iran offers plenty of these. 

Kashmir's agricultural officials and saffron growers say the valley's saffron is premium quality as well. But the saffron industry is divided about product quality of Kashmiri saffron. Some experts say Kashmir's increasing urbanisation is not good for maintaining saffron quality. But Srinagar's officials hotly deny this. 

"Saffron grown in Kashmir commands premium in the market," says director of Jammu & Kashmir agriculture department Mushtaq Ahmad Shah. There may be debate on quality but on quantity everyone agrees - floods have wrecked Kashmiri production of saffron, prices have jumped by Rs 10,000 per kg in the last two days and traders expect prices to go up more and cross Rs 2 lakh/kg.

Even in normal years, Indian demand outstrips domestic production of 15,000 kg. This year, therefore, businesses that use saffron are worried. Snack and ice-cream makers such as Haldiram, Vadilal and Bikaji are big buyers of saffron. "We have not started procurement of saffron yet but there are reports about poor harvest this year," said Vadilal group MD Rajesh Gandhi. Bulk buyers like Gandhi will have a problem. 

"This year, there is no volume to offer to large traders and institutional buyers. There are 40,000 outfits selling saffronBSE -4.85 % and majority of them are defunct as farmers have not been able to produce much," said GM Pampori, who heads the All J&K Saffron Growers & Dealers Association. Saffron is sold in packages of a tola or 10 grams in retail markets while large traders procure in bulk through agents in Jammu & Kashmir. 

So, what of India's elite users of saffron, those who like the spice as an ingredient in fine food and fine living? Or what about big temples and gurudwaras, which are big customers of saffron? 

Traders say top-end users of saffron are rarely deprived of their favourite spice. Last year, the super-wealthy Guruvayur temple inked an agreement with J&K Agro Industries Development Corp to procure 10 kg of saffron every month. Saffron is a key ingredient of the Hindu, Buddhist, Jain and Sikh faiths. Saffron and sandal pastes are often used to anoint idols and statues. It is also used in many rituals. 

Recently, people thronged to the Chhoti Dadabari Jain temple in New Delhi's South Extension to observe a 'miracle' of saffron water flowing from a marble carving of a Jain saint's feet, known as 'charan pratishtha'. For other elite lovers of saffron, there will be other ways to get their hands on the world's most expensive spice. Price is no object for these customers, and there's always Iranian saffron.