Sri Lanka to target China’s $ 1 billion cinnamon market
The Morning: Plans are underway to commence the export of Ceylon Cinnamon to China by next year in terms of the Memorandum of Understanding (MOU) signed with China in 2023 as a first step in capitalising on the $ 1 billion Chinese market, the Department of Cinnamon Development (DCD) reveals.
Speaking to The Sunday Morning Business, DCD Deputy Director (Administration) K.D. Chathuranga Gunasekara revealed that the department had entered into an MOU with China last year to provide for the export of Ceylon Cinnamon to China.
According to him, Sri Lanka predominately exports its cinnamon to Latin American countries such as Mexico.
He added that with the signing of the MOU last year, they were hopeful of creating a path for Ceylon Cinnamon to be exported to China in order to capitalise on the approximately $ 1 billion demand in the Chinese market.
Gunasekara further stated that the DCD had recommended around 10 local cinnamon producers, from among whom three had been selected by Chinese officials.
“After signing the MOU with China, they have selected around three of our manufacturers. Unlike our other markets, we can’t just directly import cinnamon to China; there are certain quality standards they expect us to meet.
“Accordingly, they have carried out inspections and upon being satisfied with quality, in consultation with the Chinese Embassy, they have informed the Chinese buyers that we are qualified to export to China,” he said.
He further revealed that the three selected cinnamon producers had yet to commence exporting to China and that they were still finalising the agreements. Accordingly, exports to China are expected to commence by next year.
According to Gunasekara, Sri Lanka’s annual cinnamon exports stand at around $ 350 million at present.
The DCD was established in terms of Budget Proposal No.16 of 2023 as a dedicated department for the development of cinnamon for the purpose of elevating it from a minor export crop to a major commercial plantation crop. Subsequently, the National Cinnamon Research and Training Centre, previously under the Department of Export Agriculture, was transferred to the DCD.
OSL take:
Sri Lanka is in the process of expanding the country’s export product portfolio to further boost the steady growth recorded by the sector. Among the products being promoted in the foreign markets are food commodities that include spices and Ceylon Cinnamon. Ceylon Cinnamon has managed to penetrate new foreign markets with the potential to expand to more foreign markets. It is in such a backdrop that Sri Lanka is targeting the $ 1 billion annual Cinnamon market in China. Sri Lanka’s strong trade ties with many foreign countries and the ongoing programme to further expand ties with the inclusion of more countries with trade agreements would further support the growth of the local exports sector. All these are indicative of the expanding business/investment opportunities in the exports sector. Local export authorities have also encouraged exporters to focus on value addition and further diversification of their export product portfolio. Given the growing demand for Ceylon Cinnamon in the foreign markets, Sri Lanka’s cinnamon industry has presented many business/investment opportunities for foreign businesses/investors exploring opportunities in Sri Lanka. With local businesses engaged in the cinnamon industry showing growth and profits, foreign businesses could also look at forming collaborations with local businesses with the aim of further expanding operations. The increasing business potential in Sri Lanka’s cinnamon industry ensures quick returns on investment for foreign businesses/investors.
Article Code : | VBS/AT/20241020/Z_1 |