• Pepper, nutmeg and clove demand plummets 

  by Yakuta Dawood    Spices have been Sri Lanka’s trump card since the 15th Century. The country has the global monopoly for True Cinnamon (Cinnamomum zealanicum) widely known under the geographical indication of Ceylon Cinnamon, which contains smaller amounts of coumarin compared to cassia cinnamon along with other species.  Speaking to The Sunday Morning Business, Spice Council of Sri Lanka Chairman D.A. Perera said that the manufacturing, supply chain, and export industry of Sri Lankan spice is performing well amidst the prevailing Covid-19 pandemic.  “The exports of the spice industry increased in the first quarter with Rs. 26.3 billion worth of cinnamon exports being recorded in comparison to the previous year which was Rs. 13 billion,” Perera said.  Commenting further, he said that the demand for Sri Lankan cinnamon rose as a result of Covid-19. However, the pepper, nutmeg and clove niche of the spice industry have had an adverse impact in terms of production and with low demand from the global market.  “The prices of these products have risen significantly due to the prevailing Covid-19 conditions and we also expect the cinnamon prices to further increase locally and globally considering the scarcity of the spice in Sri Lanka and the present situation in the market,” he added.  Explaining more, Perera noted exports of the spice industry have reduced by 50% in its production. For example, nutmeg has been produced only at a 50% due to the climatic conditions and clove exports were reported only as 3,500 tonnes so far this year in comparison to 6,000 tonnes that was exported last year.  When inquired if the export target will be met by the spice industry, Perera optimistically said ‘yes’ as the demand for it is continuously rising in comparison to last year.  “We will be able to achieve 20% more than the last year. However, it’s too early to predict right now, as it’s a bit difficult as meetings are held online, production in several areas are paused and due to other external challenges,” he mentioned.  Perera said that according to his opinion, there is a global demand for the spice industry in Sri Lanka which will soar if it switches to an organic industry in the future.  “If we can convert all the spices to natural products, there will be a huge market as right now, the products are contaminated and use other artificial fertilisers, and this is my personal opinion,” he concluded.  Speaking to The Sunday Morning Business, Impex Corporation Director of Exports Yamuna Perera in February this year said that Impex Corporation is expected to increase turnover by 20% more than last year.  While commenting on the obstacles that could be faced this year in terms of exporting spices, Yamuna stated that presently, it is only the Covid-19 pandemic which is hindering the process, adding: “This is due to our factories, warehouses, and everything being situated in Colombo, and sometimes we are short of workers.”  Adding further, Yamuna noted that there is a huge global demand for cinnamon because only Sri Lanka has True Cinnamon, and other countries only export Cassia. “Cinnamon is mainly used in terms of getting health benefits such as to manage cholesterol, in pharmaceuticals, and it is also used for drinking in the form of cinnamon powder,” she further added.  Later, she also said that Impex Corporation is trying to expand its portfolio to products such as cinnamon powder and coriander, cinnamon powder and tea leaves, and also cinnamon powder and ginger. “These are the new ventures which we are hoping to embark on this year.”  However, all attempts to contact her for further information and updates proved futile on 18 May.  With reference to the Study and Master Plan for the Ceylon Cinnamon Value Chain in Sri Lanka, there are several options to be taken into consideration to increase the production of Sri Lanka’s unique spice in the local as well as in the global market. The steps mentioned are as below:  Firstly, food safety and hygiene standards have to be established in order to ensure safe products for local and international consumers.  Secondly, market regulation in hand with cluster development will have to facilitate the requirements to develop production processes and increase the production of compliant products.  Thirdly, in addition to the core products (cinnamon quills), value addition and diversification should be made of products as it would lead to increased business opportunities and revenue for the Sri Lankan industry.  Simultaneously, skills development and training need to be up-scaled and fulfil the task to generate a sufficient number of highly skilled cinnamon processors, traders, brokers, etc. as well as trainers in Sri Lanka.  Finally, marketing tools will have to promote Ceylon Cinnamon nationally and globally and cooperate with respective industries and institutions to assure the existence of ample demand at the market for the respective products and services.   According to the Master Plan, all these steps will lead to reliable, high quality Ceylon Cinnamon products with a return of a sustainable PCC value chain leading to an internationally recognised brand with increased demand and revenue for the industry.  “All these activities can be supported by the vision of inclusive and sustainable industrial development thus ensuring social and economic prosperity and a safe environment,”  the Master Plan added.  Meanwhile, not a few years ago, the ‘Ceylon Spice’ master brand was launched as Sri Lanka’s latest national branding attempt for the spice sector in order to achieve an export target of $ 880 million from the ‘Spices and Concentrates’ sector by next year 2022.  Accordingly, this new trademark is said to support growers, processors, and manufacturers of spices, by helping them clearly identify their products as Sri Lankan-made spices.