Sri Lankan spice industry targets US$ 500 million revenue this year
The spice industry of Sri Lanka has reportedly set a revenue target of US$ 500 million for 2019 with the assistance of new markets, rupee depreciation and increased value addition, as well as increasing exports of pepper, cloves, and nutmeg.
To achieve the revenue target of 2019, the spice industry aims to export cinnamon, as well as pepper, nutmeg, and cloves, to new markets such as Russia, Uzbekistan, and Kazakhstan, former Spice Council Chairman Nanda Kohona reportedly said on the sidelines of the launching ceremony of the Global Spice Road Symposium.
Kohona has told the English Daily, the Daily FT that the industry would also be looking at increasing value addition to reach the revenue target, but Government support would also be necessary to succeed.
According to the Central Bank of Sri Lanka, spices earned US$ 330.3 million in the first 11 months of 2018 but it was an 11.6% drop when compared to the same period the preceding year. In November, spices earnings had dropped from US$ 33.7 million to US$ 27.7 million, which is a reduction of 17.7%, data from the latest external performance report had shown.
“Most of our cinnamon is exported to Mexico and South American countries, and a fair percentage goes to the European Union. We’re looking at new markets like Russia, Uzbekistan, and Kazakhstan, which are coming up now and looking for spices from Sri Lanka. The demand is not only for cinnamon but pepper, cloves and nutmeg as well,” Kohona has told the media.
He has also said that the industry is looking for mixed markets where high value addition is done. Mass markets are not an option, as the industry is looking for specialised products in terms of getting the best income. Kohona has explained the importance of making the best use of local spices, such as exporting extracts from spices which have medicinal value, which are usually exported raw to other countries.
“If you take black pepper, the highest piperine level is in Sri Lankan pepper. Extract that and market into the world, without exporting it raw and allowing another big producing country to get that benefit, which we can do,” he has observed.
According to Kohona, although cinnamon was the highest income earner for the spice sector, the production of pepper is higher than cinnamon in Sri Lanka.
OSL take:
Sri Lankan exports are on a growth path and the spice industry in particular is being focused as a high potential area to increase revenue. The target of US$ 500 million revenue from the spice industry this year indicates the potential to further develop the spice sector. Sri Lanka enjoys many trade agreements with other countries and foreign businesses/investors could explore opportunities to invest in the local spice industry or form a joint venture with local exporters to penetrate foreign markets.
| Article Code : | VBS/AT/21022019/Z_3 |