Sri Lanka’s spice industry should aim for US$1 billion in export revenue as soon as it can, but will not get there by producing and trading more raw material, the chairman of the Spices and Allied Products Producers’ and Traders’ Association (SAPPTA) has said.
Addressing SAPPTA’s 42nd Annual General Meeting last Friday, Ryan Rambukwella said the sector cannot expand meaningfully while plantations, traders, processors and exporters operate in silos, the Daily FT reported.
“Irrespective of our individual businesses and aspirations, I believe there should be one common national objective. Sri Lanka’s spice industry should reach $1 billion in export revenue in the shortest possible time,” he said.
He named five barriers: compliance failures, restricted access to raw materials, working-capital constraints, limited value addition and slow technology adoption.
Why more volume will not work
Rambukwella’s central argument is that competing for the same raw material only splits an existing market. “If we all compete only for the same limited pool of raw material, we simply divide the existing opportunity. Value addition and brand building allow us to make that opportunity larger,” he said.
He drew the distinction sharply: “A commodity carries a market price. A successful brand carries brand equity, intellectual property, reputation, and long-term intangible value.” For a resource-constrained country, he said, competing purely on volume is not viable, and the question to ask is how much value is generated from every kilogram produced or processed — pointing to ingredients, extracts, finished products and Sri Lankan brands.
Contamination is costing exporters
Rambukwella said contamination involving chlorate, perchlorate, nicotine and lead continues to affect the industry, with exporters sometimes unable to establish where the problem originated.
Rather than dealing with it after consignments are rejected or downgraded, he called for stronger traceability and coordinated work between testing and certification agencies, exporters, the Department of Export Agriculture (DEA), the UN Industrial Development Organisation (UNIDO) and other specialists. “If we can improve traceability and resolve these compliance issues, we can generate greater export value from the same volume of production,” he said.
The controversial ask
SAPPTA wants the Government and industry to examine a controlled mechanism for importing raw spice material for genuine value addition and re-export — a proposal Rambukwella acknowledged is sensitive in a sector built on protecting domestic growers.
He stressed that farmers and domestic producers must be protected, but argued Sri Lankan processors are competing against countries that can source raw material globally. A carefully designed and traceable system, he suggested, could let imported material be used strictly for processing and re-export without distorting domestic prices or undermining farmer livelihoods. “The objective should be a well-thought-out national framework that protects the local market, while allowing Sri Lanka to grow as a competitive value-added export centre,” he said.
On financing, he said high working-capital pressure forces businesses to turn inventory over quickly rather than hold it, process it and raise its value. “If we want to move from commodity trading towards value-added exports, we need financing structures that better reflect the realities of agricultural trade.”
He also warned that labour shortages and technological advances among competing origins are making mechanisation urgent across cultivation, harvesting, drying, sorting, processing and traceability: “Technology and mechanisation are no longer optional; they are becoming essential to our competitiveness.”
SAPPTA said it would strengthen market information services and provide a platform for industry and Government to tackle bottlenecks together.
How big the target is
Sri Lanka’s single largest spice export is cinnamon, and in July the Cinnamon Development Department was targeting US$300 million in cinnamon exports as farm-gate prices for premium Alba grade hit a record Rs. 7,500. On those two figures, cinnamon alone would account for roughly 30% of the $1 billion goal — a comparison we have derived from the two targets rather than one SAPPTA has published, and one that indicates how much of the balance would have to come from pepper, cloves, nutmeg and processed products.
Not reported
The Daily FT does not say what Sri Lanka’s spice exports are currently worth, so the gap to $1 billion cannot be quantified from the report, and Rambukwella sets no date for the target beyond “the shortest possible time.”
It does not say whether the Government has responded to the controlled-import proposal, whether any ministry or the DEA is considering it, or how a traceable processing-and-re-export scheme would be policed. It gives no figure for consignments rejected or downgraded over contamination, does not say which export markets are raising the chlorate and perchlorate findings, and does not identify where in the chain the contamination is believed to originate.
Attendance at the AGM, the new office-bearers elected, and whether any government official addressed the meeting are all unreported.
