Ceylon Cinnamon under threat

26 August 2015 02:40 am - 0 - {{hitsCtrl.values.hits}}

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Sri Lanka’s cinnamon industry is under threat as the world-renowned Ceylon Cinnamon brand is facing severe competition from cassia, an inferior quality substitute, which costs a third of the price of cinnamon, the apex industry body for the country’s spices and allied products said.

Cassia which is produced in large scale quantities in countries such as China and Indonesia is fast gaining popularity over cinnamon even with the adverse publicity attracted by cassia in the past.

“It is also noticed that some buyers who always insist on Ceylon Cinnamon are moving towards cassia which is selling at prices at much lower than cinnamon.

This is indeed an alarming fact for the industry as a whole,” The Spices and Allied Products Producers’ and Traders’ Association (SAPPTA) said.
In 2014, cinnamon continued to enjoy prices between Rs.1, 000 and 1,500 at the auctions.

Cinnamon is Sri Lanka’s largest agricultural export commodity in the spice sector, annually earning over Rs.17 billion in foreign currency.

Sri Lanka supplied 98 percent of the global cinnamon demand and in 2014 and exported 13,684 tonnes, slightly down from 13,866 tonnes in 2013.

At a time when the tea exports are also declining mostly due to turmoil in Sri Lanka’s key export markets, the fresh issues faced by Ceylon Cinnamon will add to the country’s ailing exports.

Besides, the quality of the Ceylon Cinnamon has also been hampered mainly due to the poor producer awareness on quality and the long standing problem of dearth of peelers.

Adding further to the woes, some of the foreign companies established under the Board of Investment (BoI) license are seen purchasing Sri Lankan spices at farm-gate prices to be exported to their home countries.

“This not just create a non-level playing field but also results in losing the much needed foreign exchange to the country as these companies sell at lower prices,” said the SAPPTA’s immediate past Chairman, M.C.M Zarook.

Local spices and allied exports cannot export around the year because of the limited and seasonal factor associated with supplies.

Hence he proposes to make producing of spices in Sri Lanka mandatory by those BoI companies if they want to export.

About 90 percent of the spices are produced by small house gardens and small scale farmers in Sri Lanka.

Zarook further said no pepper exports had been made to India under the Indo-Sri Lanka Free Trade Agreement.

Despite pepper being included under the free list when it was originally signed in March 2003, India imposed a 2,500 tonnes cap in 2006 which SAPPTA believes was against the true spirit of the agreement.

SAPPTA has 90 members composed of exporters, producers, brokers, processors, dealers and those offering services to the industry.

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