Financial package for cinnamon trade

Bandula NONIS

Sri Lanka Export Development Board (EDB) has brought a proposal to grant financial assistance to cinnamon exporters to face the present difficulties in marketing cinnamon.

The cinnamon in the island, has been superior in quality in taste and many Europeans from the time of the Silk Route came here to purchase Ceylon cinnamon.

Specially the Portuguese came here to grab the trade which was under a monopoly by the Moors in Europe.

Cinnamon is grown in the rain forest basin since the plant is comfortable in the wet climate. It can be grown in the dray zone with irrigation and water supply.

The line of producing countries starting from Sri Lanka is followed by Seychelles, Madagascar and India.

Indonesia, China and Viet Nam produce the thicker type for export.

With the present market trend for cinnamon one time commercial agricultural export commodity from Sri Lanka, according to the Central Bank statistics, show a decline in exports compared to 2007.

There is a sharp decline by 80%approximately where the exports stand at 478 tonnes. Cinnamon is derived from the bark of the tree.

The total consumption of spices in both developing and industrial countries is based on the size of population, income and the economy.

In the developing countries spices are used chiefly in the household but in industrial countries spices are consumed in the food processing industrial sector.

In the export of spices international standards exist for black pepper, cardamom, ginger, chillies, curry power, cinnamon, cloves or seeds.

There are accepted grade designations for branding and Sri Lanka cinnamon has a grade mark in trade. There are sometimes British standards and specifications for spices from developing countries covered under contracts. The health regulations and controls differ from one importing country to another making difficulties in compliance to the exporters from developing countries. All this is for the protection of the spice consumer and health compliance in the EU countries.

The intention of Minister of Export Development Prof. G.L.Peiris is to strengthen the export agricultural base specially for commercial export agricultural products.

He is aware of the demand for these agricultural products in the EU countries, which keep on changing with the strength of world currency.

The phenomental depression experienced in the West has affected the cinnamon market as well. Like tea cinnamon is now brought under protection under a financial package to the grower or exporter.

Chairman SLEDB, Anil Koswatte commenting to the 'Expo News' monthly publication for exporters by the SLEDB says that the EDB has been able to obtain a loan from the Treasury as a concessionary package for traders or exporters who are affected by this crisis.

The proposed financial package is handled by the chain of Commercial Banks. There are over 350,000 cinnamon growers spread out as small cultivators in the wet zone.