SAPPTA dismisses minimum export price for Lankan cinnamon

• Says competition between SL cinnamon and Cassia has kept prices low
• Stresses industry stakeholders should be consulted before any hasty decision

Responding to a recent newspaper article where it was suggested to introduce a minimum export price (MEP) for Sri Lankan cinnamon to prevent unhealthy competition, the management committee of the Spices & Allied Products Producers’ & Traders’ Association (SAPPTA) dismissed such claims and said the competition between Sri Lankan cinnamon and Cassia is keeping prices low. “An individual has suggested recently in the print media that there is intense, unhealthy and unethical competition resulting in low quality cinnamon being exported. He claims that this has resulted in lower prices for Cinnamon. 

“Where in the world is there no competition? There are many exporters with no one exporter having a monopoly and being able to manipulate the cinnamon price. Prices are determined by market forces. Sri Lankan cinnamon is competing with Cassia, and brought down prices. This has had an effect on the cinnamon price,” a statement said. While acknowledging quality must be maintained at all times, it was pointed out that this must be done at farm gate level where the initial processing and quills (sticks) are made. 

“Business is not always done on standards fixed by the Sri Lanka Standards Institution. It is also done on an understanding between the buyer and seller based on the buyers’ requirement. 

“Therefore, the introduction of a minimum export price (MEP) would not work. When a MEP was introduced for a short time for some spices in the seventies, it failed and caused major disruption to the export of spices and was withdrawn. 

“Stakeholders like the Spices & Allied Products Producers’ & Traders’ Association (SAPPTA), The Spice Council and the Cinnamon Association in the cinnamon trade should be consulted before any hasty decision is taken to implement a MEP,”the statement noted.