Govt mulls Rs 20B investment to uplift spice exports
Minister of Primary Industries, Daya Gamage announced that Rs 20 billion investments including private investments would be made in the spices and allied product sector in the next few years to achieve $1.5 billion in export revenue from spices including $1 billion export revenue from cinnamon exports.
The Minister made these remarks while participating at the 33rd AGM of Spices and Allied Product Producers’ and Traders’ Association (SAPPTA).
Elaborating the Ministry’s plan to achieve spice export targets, Gamage asserted that Rs 20 billion would be invested in spice sector including private investment within the next few years. He said the World Bank project was underway to empower small-scale spice producers by providing funds between 20-50 per cent of their investment. He further said the Government is currently seeking a $100 million grant from WB to provide low interest loans 1800 mini-projects in the spice industry. He said the WB has agreed to three-fold the funds, once the current project is completed.
Speaking to Ceylon FT, Secretary to the Ministry of Primary Industries, Bandula Wickramaarchchi said Sri Lanka could easily achieve $400 million……from cinnamon exports without value addition by capturing the Cassia market share. However, to achieve $1 billion from Cinnamon exports, the country needs to focus on value-added products. Wickramaarchchi said the Ministry of Primary Industries has developed a cinnamon-based carbonated drink and more value-added products on the pipeline. The Minister said promoting the health value of Cinnamon is the key to compete with Cassia. He pointed out that Cinnamon has anti-cancer properties while Cassia is considered as a contributor to cancer.
SAPPTA Chairman, Vernon Abeyratne said pepper prices had drastically dropped from Rs 1,300-1000 per kg to Rs 750-800 per kg now and predicted further decline in prices due to high supply of pepper from Vietnam. Responding to Abeyratne, the Minister announced that he has put forward a proposal to Cabinet to grant a Rs 200 subsidy per kilogram of pepper to pepper farmers in the country. Gamage insisted that exporters need to diversify its market as the exporters rely on Indian market for over 50 per cent of pepper exports.
The Minister also announced the Ministry plans to develop software to provide stable prices to spice growers. He said he could not rely on data received from State sector workers. He elaborated that this software will create database which would help to avoid oversupply of spices to local markets.
Spice and allied products exports were at $311.54 million in 2016 contributing to a little over 3 per cent of overall exports.