Sri Lanka’s spice industry needs to re-invest its profits to ensure industry growth and spice producers deserve to be thanked for the forex revenues they bring in, said Minister of Industry and Commerce Rishad Bathiudeen, addressing the Advisory Committee on Spice on Wednesday, 11 May, at the Export Development Board premises in Colombo.
“The Divineguma programme of the Government could be used to increase our cinnamon production by enlisting the households to grow cinnamon and various other spices so that the families too benefit,” the Minister said.
The committee members informed Minister Bathiudeen of various promotional activities that the EDB and the spice industry have undertaken in the past few years.
Future promotional activities include the launching of the Ceylon Cinnamon Lion logo locally in the next two months by President Mahinda Rajapaksa, which will thereafter be launched internationally at the Anuga Trade Fair in Germany and IFT in New Orleans, USA. This will be followed by registering the Ceylon Cinnamon Lion logo in the main consumer markets.
Sri Lanka can still sell an additional 10,000 tonnes of cinnamon easily if the country can produce it, they revealed. “We need to double our capacity so that we will be able to meet this extra demand,” Minister Bathiudeen said.
According to Export Development Board of the Ministry of Industry and Commerce, Sri Lanka’s total spice exports value in 2010 stood at US$ 165 m and 51% of it belonged to Ceylon Cinnamon (US$ 84 m). Spice exports earnings increased by 27% in 2010 in comparison to 2009 while cinnamon exports revenues too increased by 13.3% compared to 2009.
Sri Lanka is topmost exporter of Ceylon cinnamon having 85% of world market share for cinnamon. Mexico is Sri Lanka’s main cinnamon export destination followed by USA. More than 85% of locally produced cinnamon are exported.
The committee members said that of the 30000 hectares of cinnamon grown in Sri Lanka, 20% are peeled twice a year and 70% are peeled only once a year, thereby incurring potential forex losses. “10% peeled once in two years, if peeled at all” a member said. According to them, Sri Lanka’s cinnamon industry needs another 10000 peelers due to worker shortage. Currently, a cinnamon peeler earns between Rs 30000 to 45000 per month, with a mere three months ‘on the job’ training.
The Committee Members voiced that high labour costs are a serious burden. Unlike in tea and rubber industries, there is a serious shortage of cinnamon peelers in Sri Lanka leaving the existing peelers to charge exorbitant amounts for peeling. Cinnamon peeling is skilled work and the communities involved in it for generations have begun to demand income sharing and no less. “We share a minimum of one-third (33%) of our cinnamon sales revenue with the peelers on a daily basis and some producers are compelled to share as much as 50% of their revenues” said Sarada M De Silva, of “Intercom Limited.”.
Minister Bathiudeen was also informed by the Committee that the Sri Lankan spice volumes (including cinnamon) for export, despite their high quality, are facing the risk of rejection in tough international market segments such as North America, due to the lack of various essential cleaning and sterilisation process facilities at pre-export stages. A committee member said that post-harvest drying of spices before the export is essential and if any moisture is left in the commodities, the export shipment could be rejected and compelled to be incinerated at the importers’ end. The Sri Lankan exporter then have to bear additional charges for safe destruction of the entire shipment, a member said.