Geographical Indication (GI) recognition for agricultural products can improve global recognition for exports while ensuring niche market reach and premium prices, especially by differentiating the certified products in the international market.
Sri Lanka’s first-ever GI certification was for Ceylon Cinnamon. While the country is currently taking steps to achieve this recognition for other products like golden pineapple and king coconut, The Sunday Morning looked into how this recognition has impacted the growth of Ceylon Cinnamon so far.
A recent Institute of Policy Studies (IPS) blog titled ‘Sri Lanka’s Competitive Edge: Intellectual Property Rights and the Power of Geographical Indications’ explains how targeted GI reforms are essential to build a more resilient value-driven export economy. It also revealed that GI remains underutilised in Sri Lanka.
Moreover, following discussions made by The Sunday Morning with several sector stakeholders, both private and Government, it was made more evident that GI utilisation for Ceylon Cinnamon currently remains low in the country. Several factors have been underlined as reasons, which include challenges in ensuring supply chain traceability, the need for promotional efforts, a coordinated strategy, and a lack of value addition.
The need for increased value addition
Speaking to The Sunday Morning, Export Development Board (EDB) Director – Export Agriculture Janak Sanjeewa Badugama noted that GI certification for cinnamon had been commercially available in the market for over two years, and that obtaining the certificate itself had taken a considerably long period.
Being Sri Lanka’s first experience with GI, he said there were many difficulties encountered along the way. GI certification is fundamentally for value-added products, not raw materials. He explained that over 95% of cinnamon traded by Sri Lankan entrepreneurs in the international market was exported as raw materials, not as value-added products, and that this tendency would not change overnight.
There is no meaningful demand in the global market for GI-certified cinnamon sold on a raw material basis. Badugama identified this as the key challenge at present. He also noted that it was not possible at present to gather exclusive data on GI product exports from any source, as there was no separate classification available for GI products.
However, he acknowledged that while the current position had not reached expected levels, there were certain positive signs.
“Some exporters are now looking to shift towards GI products and are sending samples out to international markets mainly through international trade fairs where GI-certified products have been highlighted in the international arena. As a result of the continuous efforts made, we have given priority to displaying GI products at these events, organised exclusive buyer events, carried out communication through international missions, and established partnerships with organisations such as the International Finance Corporation (IFC) for exclusive advocacy campaigns,” Badugama said.
He also explained realistic expectations around the GI market, with the recognition being relatively new. Moreover, he stated that since GI products were premium products, the prices were correspondingly higher, but noted that progress could be better.
Badugama also noted that the EDB maintained a close alliance with the Association for Ceylon Cinnamon Protected Geographical Indication (ACCPGI), with discussions held every month. However, given the fact that the value addition for cinnamon currently remains low, the sector’s concerns go beyond GI alone.
On the benefits of GI certification for exporters, Badugama said that the main advantage was obtaining a premium price. Beyond that, he described GI as a tool that exporters could use to build their own brands in the international market and target niche markets.
“At the country level, having more and more GI certifications in agricultural products raises the overall brand recognition of Sri Lankan produce, allowing it to command premium pricing, which can then support the sale of other products as well. The EDB is currently pursuing GI recognition for Ceylon Kithul and is also looking at Ceylon Tea, while initial groundwork is underway for king coconut, among other initiatives.”
Promotional work and new market opportunities
According to the same IPS blog, Cambodian Kampot Pepper moved beyond niche markets after GI recognition in 2010, with production nearly doubling by 2017 and exports rising by over 250%. Similarly, Indonesian Muntok White Pepper experienced a tripling of exports by 2014 after obtaining GI status in 2010, highlighting how GI status can strengthen global market penetration.
In this light, weighing in on what has been done to advance Sri Lanka’s GI recognition for cinnamon, EDB Spices and Concentrates Advisory Committee Chairman and Samagi Spice Exports Director Marketing Nanda B. Kohona, one of the pioneers in achieving this for the cinnamon sector, explained the current situation.
He noted that the process was carried out about five years ago with the involvement of several key stakeholders, and the ownership of the GI rested with the EDB, adding that the ACCPGI also worked alongside to maintain GI status.
“However, it should be stated that currently, very few exporters are involved or represented in the committee, which is somewhat disappointing. Exporters are aware of the movement and behaviour of the market for GI cinnamon,” he said.
On the promotional front, he noted that despite having limited funding, the EDB carried out many successful initiatives together with a few overseas missions. He also mentioned having submitted documents to the relevant Government authorities recommending that foreign missions and trade sector representatives be engaged, specifically in Europe, where GI cinnamon had been gaining traction, and increasingly in the US as well. He described progress at present as rather slow, with limited interest.
Kohona also shared that proposals had been made to introduce merit awards under the annual Presidential Export Awards, specifically for the best exporter of GI cinnamon from Sri Lanka. Additionally, he noted that efforts were being made in terms of promotional work to drive interest, create momentum, and draw more exporters and stakeholders into the sector, while also encouraging growers to cultivate more cinnamon under the GI certification programme.
“It is also important to effectively utilise funding from agencies such as the IFC, which already funds several commodity and agricultural sectors in Sri Lanka, to create awareness and grow more cinnamon under GI certification. The cost of certification for individual farmers or farmer groups could be partially subsidised to encourage more participation,” he said.
Turning to market opportunities, Kohona identified several new and growing markets for GI cinnamon, including China and Middle Eastern countries such as Saudi Arabia, which had previously shown little interest in cinnamon but was now buying it in substantial quantities, as well as South Africa, Japan, South Korea, and Australia.
“These are new markets that need to be leveraged. However, the private sector alone cannot manage, and the EDB can step in with more promotional programmes such as trade fair participation, Business-to-Business (B2B) missions and meetings, and broader sector support,” he added.
Addressing certain misapprehensions regarding GI certifications, Kohona clarified that not all the cinnamon produced in Sri Lanka could carry a GI certification, with GI being a niche product, certified for a specific reason, and intended for a niche and limited market.
“For example, Cambodia Kampot Pepper is a GI-certified product from a country that produces around 40,000 MT of pepper annually, of which only 300 MT is sold as high-value GI pepper. Likewise, Sri Lanka produces roughly 20,000–22,000 MT of cinnamon per year, and around 100 MT is a realistic starting point for GI sales, with further improvement.
“Thus, this is a niche, high-end market that can be developed, bringing along great brand value and image development for the product. However, a small percentage of the industry is not able to develop the sector. Thus, broader involvement across all stakeholders is what the sector needs to move forward,” he added.
Investing in marketing
Meanwhile, Spices and Allied Products Producers’ and Traders’ Association (SAPPTA) Chairman Ryan Rambukwella noted that actual utilisation of GI at the moment, in terms of retail, was extremely limited. To make the most out of GI, he said, the product needed to be manufactured, retailed, and then branded and marketed quite well in the destination market.
When asked why GI was being underutilised, Rambukwella explained that the whole idea behind GI was that it gave validity and certified the name on the global stage. He explained that most other brands globally that carried GI identification had invested substantially in marketing, not just at the individual company level, but at the level of the country of origin itself.
“That level of funding and marketing is not being carried out currently, and I believe there is a cost factor attached to it as well. Till markets start recognising and start buying cinnamon products for the specific sake of Ceylon Cinnamon, and till that message is well promoted, it is difficult to reach a strong point. Moreover, such progressions usually take time,” he added.
The evaluation process
What the GI certificate essentially does is demarcate Ceylon Cinnamon geographically in the international market. In order to achieve this, it is necessary to assess the different nodes in the supply chain, such as farmers and processors, to check if they follow the required standards and recommended criteria.
Speaking to The Sunday Morning, Department of Cinnamon Development Deputy Director Chinthaka Widanapathirana explained the ground-level evaluation process behind GI certification.
Accordingly, the evaluation process pertaining to harvesting includes field assessments such as determining whether the recommended fertiliser applications, agricultural practices, soil conservation, and land management practices are used.
In terms of processing, assessments are carried out to check if adequate facilities are available for hygienic and quality processing, looking into aspects such as water quality; processing centre maintenance; proper tools and storage; worker hygiene and working environment facilities; proper records, accounts, and documentation across the process; and usage of pesticides, among other steps. Later decisions are made based on these evaluation results.