PERSPECTIVE

Cinnamon, once largest source of revenue

Geoff Wijesinghe

Cinnamon ,the sweet scented bark of the Cinnammum Zceylanicum tree was Sri Lanka’s largest source of revenue since the advent of the Portugese in the early 16th century. And is even today a principal export earner.

Marco Polo was so captivated by `Serendib’ or Sri Lanka as she is now and the fragrant spice breezes which wafted over the land that he describd this fair isle as the most beautiful he had visited.

Indeed, Sri Lanka’s spices are a bulwark of our exports and are the best, the finest, the most aromatic predominant is cinnamon. But, as time goes by the Sri Lanka cinnamon industry has had to compete with lesser quality from the East, needless to say, at lower prices.

However, due to its very high quality our product established and acknowledged as the best in the world, has withstood the test of time and is today the country’s fourth largest agricultural export, recording foreign exchange earnings of US dollars 75 million in 2007.

However, Sri Lanka’s Cinnamon Industry has run into turbulence, through no fault of its own, but due to the vagaries of the economic climate caused by the current global recession which is wreaking havoc in every corner of the world.

As a result, cinnamon prices have taken a tumble along with a sizeable drop in demand. According to producers, prices have dropped from Rs. 800-900 per kilogram, to a lowly Rs. 350-400 per kilo and still the demand is low due to the acute liquidity crisis being experienced by buyers worldwide.

Export Development Board Chairman Anil Koswatte was reported to have said Tuesday, at a media briefing that President Mahinda Rajapaksa had held a meeting with cinnamon industrialists and pledged financial assistance to spice exporters.

The EDB would offer a special stimulus package .

In a move to stablise the industry, the Spice Council has reportedly included the cinnamon sector under the New Comprehensive Rural Credit Scheme to provide concessionary loans to cinnamon traders and exporters to overcome their working capital difficulties.