Three cheers for ‘Ceylon Cinnamon’!

Cinnamon processing and export has been one of the ancient export industries of Sri Lanka for a long period of time. ‘Ceylon Cinnamon’ had been known all over the world as the authentic and genuine cinnamon which has unique colour, aroma and taste.

Sri Lanka accounts for almost 85% of the world market of cinnamon and earned premium price over other substitutes due to its quality. The cinnamon is predominately grown in the south of Sri Lanka and employs a large number of rural youth in the rural hinterland of the island providing income and employment.

 

Overseas markets

The major overseas market for ‘Ceylon Cinnamon’ is Mexico and Europe, particularly Spanish speaking territories in the world. Cinnamon is being used for food preparation, cosmetics industry also as an ingredient of medicinal composition.

The third largest export agriculture crop in terms of value of exports in Sri Lanka is cinnamon. The total quantity exported by Sri Lanka is approximately 12,000 MTs per year. More than, 80% of our cinnamon exports are directed to Mexico. Approximately 9% of our total exports amounting to 1,500 MTs are exported to the EU.

Cinnamon cultivation at present is predominantly practiced at home gardens by the small scale farmers supporting the livelihood of over 70,000 smallholders and providing employment to over 350,000 rural farmers. The value of cinnamon export represents more than 50% of spice exports from Sri Lanka.

Use of SO2

Cinnamon is being processed mainly through traditional processing system and the use of sulphur dioxide (SO2) for fumigation has been known to the industry for centuries. Sulphur dioxide fumigations keep the hygienic quality and act as anti-browning agent and help to retain the characteristic golden yellow colour of ‘Ceylon Cinnamon’. In fact, the fumigation helps to dispel all kinds of pest attacks to the products.

The use of SO2 had not been challenged by any importer, consumer or governmental authorities until 2004. The German Spice Association brought to the notice of one of the European countries that ‘Ceylon Cinnamon’ has excessive application of sulphur dioxide, which would cause health problems to the consumers.

Even at that time it was observed that the European Commission’s Director General, Health and Consumer Affairs already allowed and prescribed the maximum level of usage of sulphur dioxide in food products such as ginger (150 mg/kg), apple and pears (600 mg/kg) and prunes (2000 mg/kg), etc. Unfortunately cinnamon was not included in the EU list and hence no maximum residue value of SO2 had been prescribed.

The Codex Alimentarius, the international organisation which sets standards on preservatives and additives of food products also did not have set maximum residual level in respect of cinnamon. In other words, both the EU food regulations and the international standards were to be framed from the beginning in respect of cinnamon on the basis of scientific evidence.

International standard for cinnamon

As a result of the submissions made by the Sri Lanka Trade Representation at the Mission in Brussels to the EU with the technical input jointly received from Institute of Industrial Technology, Dept. of Export Agriculture (Scientific Aspect of the Product), Sri Lanka Spice Council (Trade Practices), the EU has informally pending framing of legislation sets the residual level of SO2 at 150 mg/kg.

In the meantime, the Sri Lanka Mission to the WTO in Geneva vigorously campaigned with the Codex Alimentarius Commission even bypassing the seven-step procedures for setting up of the residual level in respect of food products to set a new standard on ‘Ceylon Cinnamon’ with the maximum residual level of SO2 at 150 mg/kg.

As a result of the strong lobbying carried out by Sri Lanka, the Codex Alimentarius Commission at its 29th session held in Geneva in July 2006 adopted maximum level of use of 150 mg /kg for SO2 in food category 12.2.1 herbs and spices. This international standard for cinnamon is also recognised by the civil society coalition in Geneva.

Although EU is a member of Codex Alimentarius Commission, according to the EU legislation procedure, it is required that the approval of Scientific Committee, the EU Council and the EU Parliament the maximum residue value of substance in the food product.

In this regard, the Department of Commerce in consultation and with inputs received from Institute of Industrial Technology, Department of Export Agriculture and Spice Council prepared a scientific document requesting for establishing EU standard of SO2 used in cinnamon and forwarded to the EU in 2008 for approval.

It is now inspiring that the EU has passed legislation approving the usage of maximum level of SO2 at 150 mg/kg only for ‘Ceylon Cinnamon’ (Cinnamomum Ceylanicum). This decision will provide legal conformity for the use of SO2 at limited level through the traditional method of cinnamon processing of Sri Lanka, giving much needed relief to the rural farmer communities.

The decision will equally benefit the consumer and the importer all over the world by providing scientific basis to safeguard the health aspect. Sri Lankan cinnamon cultivators and processors are now able to use their traditional method of fumigation in order to maintain the hygienic quality by preventing microbiological contamination and insect attacks. Similarly, consumers all over the world can use cinnamon for any purpose without any hesitation. This decision of Codex Alimentarius and the EU will facilitate the international trade of cinnamon.

Identity for ‘Ceylon Cinnamon’

The Sri Lankan cinnamon industry has also encountered a difficulty in the international trade arena to maintain its unique quality and identity from the inferior quality substitutes freely available and sold as ‘Ceylon Cinnamon’ in the market as there was no special classification under the Harmonised Code (HS Code) of Custom Nomenclature.

According to World Custom Organisation, all types of cinnamon were classified together under HS Code 090610 (Cinnamomum Blume). Consequent to the submission made by Sri Lanka to the World Custom Organisation, a new category only for ‘Ceylon Cinnamon’ under the HS Code and a new and special sub heading (HS 090611) has been designated since 2008.

The demarcation of new heading for Ceylon Cinnamon ensured true identity for ‘Ceylon Cinnamon’ in the international trade regime/trade which benefits the Sri Lankan cinnamon grower and exporter as the decision establishes true identity of ‘Ceylon Cinnamon’. Similarly, the consumers of cinnamon all over the world are now given an assurance that the product that he consumes is true cinnamon originating from Sri Lanka.

Intellectual property rights

The Intellectual Property Law (IP) under the WTO jurisprudence and also according to Sri Lankan domestic enabling legislation on IP provide protection for products which have unique characters associated with the geographical area where it is grown or produced (e.g. Bordeaux Wine, Swiss Cheese, Ceylon Tea, etc.).

The domestic laws have now been framed to identify ‘Ceylon Cinnamon’ with the intellectual property rights under the geographical indications giving an opportunity for Sri Lankan exporter of cinnamon to recourse to the legal action and seek remedies if any trader violates the IP rights of ‘Ceylon Cinnamon’ by selling inferior quality substitute in the international market.

‘Ceylon Cinnamon’ logo

In an associated development, as a praiseworthy initiative, the Sri Lanka Export Development Board (EDB) launched the ‘Ceylon Cinnamon’ logo at the Presidential Exports Awards Ceremony held on 28 June 2011. The President unveiled the new Ceylon Cinnamon Logo at the occasion.

The ‘Ceylon Cinnamon’ logo could be utilised in the similar manner of the much popular Ceylon Tea Logo in the international market. The logo represent as a good marketing tool for the industry to further their presence in the global market.

Factors to improve on

The setting of maximum residual value of SO2 in Ceylon Cinnamon by the Codex Alimentarius in 2006 and the EU legislations, demarcating special sub heading only for Ceylon Cinnamon under the Harmonious Custom Clarifications (HS Code) by the World Custom Organisation and the legal protection provided for two Cinnamon under the geographical indications (GI) of IP framework and registered Ceylon Cinnamon logo certainly provides a sound scientific basis and standard for Ceylon Cinnamon and legal protection. While these salutary developments, important and vital, there are some other factors which would also contribute for the betterment for the industry and some of them are as follows:

Assist farmers through cinnamon clusters to process cinnamon to improve hygienic aspects and minimise SO2 usage

Encourage cinnamon cultivators with the introduction of productivity enhancing farming practices (application of fertilisers, etc.)

The areas cultivated with cinnamon are now declining with the resultant of low production. This could be arrested by encouraging farmers to grow more cinnamon in their home gardens and practicing productivity enhancing methods

Cinnamon cultivation and processing could be brought under the facilities provided through the home economic development programme

Develop farmer organisations and cooperative system in order to strengthen the bargaining power of the farmer to receive better remuneration for their quality products

Strengthen the current agriculture extension services for cinnamon cultivation as well

Conduct research on usage of cinnamon for new products

Improve the facilities available for production of cinnamon bark oil, which has a premium price in the world market

(This paper has been compiled by the Research and Policy Advocacy Unit of Federation of Chambers of Commerce and Industry of Sri Lanka – FCCISL. A number of research papers on similar nature are available at www.blog.fccisl.lk. Please send your comments to [email protected].)