Govt. to set up a Cinnamon Authority to uplift industry

By Charumini de silva

Spice producers on Friday commended the 2016 Budget proposal to set up a Cinnamon Authority, noting the Government should also look at other spices that are picking up.

Pointing that Sri Lanka produces about 90% of the world’s cinnamon the Spices and Allied Products Producers and Traders Association (SAPPTA) said it was high time Government set up an institution dedicated to uplift the cinnamon industry.

“It is high time that we have an authority or a board for Cinnamon.  We have boards dedicated for tea, rubber, coconut,” Zarook said.

He asserted that in the budget proposal there were many significant proposals dedicated for cinnamon, but at the same time, the Government should also look at other spices that are picking up pace in the export market.

Sri Lanka’s spice industry accounts for about 10% of the world production, which is insufficient compared to the competitors such as Vietnam, India, Indonesia and Malaysia. “Our production is about 32,700 tons as against world production of 362,000 — that is just nothing compared to the world production” he said.

Noting that Sri Lanka has quality pepper and has been in the industry for decades SAPPTA Founder Chairman Gulam Chatoor said it is easy to cultivate and double the current market share.

He pointed out that pepper has a good scope in the world market as world consumption has increased significantly. “If Sri Lanka could capitalize on the supply of pepper to the export market, we can easily double the market share, because our pepper quality is good, we have been in the business for decades and we know how to market it.”

Explaining that if the industry has sufficient production, they are in a position to do the value addition and exports Chatoor added, “What we need is more production and more production,” 

In the case of pepper, the gestation period is less than three years, whereas the other two spices; nutmeg and cloves gestation period is longer, marketing is not easy as pepper.

“This is one of the reasons why we are emphasizing that the Government try removing the cesses thereby the prices can improve from the farmer’s level, production can go up and exports can go up,” he pointed.

SAPPTA Chairman Vernon Abeyratne drew attention to the existence of  a sizeable BOI registered Indian company operating in Mirigama where it enjoys the best of being in Sri Lanka and not having to pay any cess.

“The association objected to the BOI condition, saying that they can give BOI approval, if the BOI Company signs an agreement to cultivate at least 500 acres of pepper. But it was never heard of and instead the said company gets raw materials from local farmers at a cheap price,” he said.

He went on to say that it is necessary to have investments in the country, but it should be a win- win situation. “The investment should have been on plantations to increase productivity not to buy what is already there in the country at a cheaper rate and sell it elsewhere.”