production & export of spices in sri lanka

Kandaudahewa & Vithana 08/BA/15476 & 08/BA/15761

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Content

Spice and Sri Lanka 03

Spice Distribution of Sri Lanka

Historical Period

The period under colonization and the period after independence

Spices – Production and Export 04

The export of spices in British colonized period

The period after the Independence

Yearly Production and Export of Spices (From 1998 - 2008) 06

Summary 12

Bibliography 13

List of Tables

Table 1: 1998 Production and Export of Spices 06











List of Graph

Graph 1: Cultivated Area 1986 05

Graph 2: Production in 1986 05


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Following are some of the commonly used spice mixtures from spice gardens of Sri Lanka and

around the world for food flavouring:

Spice and Sri Lanka

• Cinnamon

• Cloves

• Cardamom

• Nutmeg

• Sadikka

• Wasawasi

People have used spices for centuries mainly to enhance food palatability. This appetite for

precious spices led the Europeans to plant spice trees and develop spice plantations in their

colonies. Sri Lanka then known as Ceylon was one such colony of the British where spices were

planted in spice gardens of Sri Lanka for commercial purposes

The distribution of spices in Sri Lanka can be described under several stages.

Spice Distribution of Sri Lanka

01) Historical Period

02) The period under colonization and the period after the independence.

The evidence shows that spices were cultivated since the very long history. The coastal area

and the wet zone from the “Magama” kingdom to the “Kotte” kingdom, and the inland

region close to the “Pihiti” kingdom were the famous historical areas where spices were

cultivated. In the upcountry, the central and the wet region were areas where spices were

cultivated. The local government earned large revenue from the spices cultivation.

Historical Period

In this period, the region from Kotte to Benthara River, the upcountry wet zone and the low

country wet zone were used for spices cultivation.

The period under colonization and the period after independence.

As a whole, spice cultivation was distributed immensely in the intermediate and wet zones.

Here, Cardamom (Karadamungu) was cultivated in upcountry wet, central and intermediate

zones and Pepper (Gammiris), Cloves (Karabuneti) and Sadikka (Nutmeg) were distributed in

the upcountry wet zone. In deciding suitable areas for spices cultivation, the historical

factors, environmental factors and agricultural feasibility were important. However, fewer

kinds of spices such as Cardamom (Karadamungu) were also cultivated in wet and the cold

zones.


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Before the British colonization period, spices cultivation considered as the main income

source of Sri Lanka. Basically, according to historical sources, spice cultivations were seen in

low country wet zone, up country wet zone and their production were exported by harbours

like Mathota, Jambukolathissa. Spice cultivation and export happened during

Anuradhapura, Pollonnaruwa, Dambadeniya, Yapahuwa, Kotte and Kandy kingdoms. And

also with the arrival of Muslim to Ceylon, the local spice cultivation marked faced changes.

Spices – Production and Export

With the arrival of British, Local spice industry grew rapidly. During the British colonization

from 1970 to 1815, spices were cultivated in the coastal and the low country wet zone of

Ceylon. But the demand from the export market was not fulfilled. After the British captured

the whole country, they started spice production in large scale and they were exported.

They set up rules also to distribute and protect the spice cultivations.

The export of spices in British colonized period

But, after the beginning of export crops cultivation such as Tea, Coffee, Cocoa cultivations,

the demand and the reputation of Spice cultivation decreased. This lead the spice

cultivation to a pull back and this affected the spice cultivations after the independence

also.

When considering this period, It is clear that no clear development or growth occurred

during this period in spice cultivation. But minor growths can be identified. The reason for

this is the high government sponsorship rendered to the export crop cultivations such as

Tea, Coffee. With this, the export crop production highly increased and it lead the spice

cultivation to reduce.

The period after the Independence

From 1970 to 1985, 50% of minor crop export was captured by spice export and from the stable growth occurred in spice cultivation during 1970 to 1980; the spice export also had a minor growth. (Source – Economic Review 1983, April)


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During the period from 1982 to 1984, the economic value of minor export crops increased

rapidly and the income of minor export crops which was 64 million rupees in 1970 increased

up to 1495 million rupees in 1982. (Source – Economic Review 1983, April)

Due to the unstable condition occurred in the country, the income earned from spice export

decreased to 1360 million rupees. But, soon after, the unstable situation of the country

became stable.

The foreign income earned from spices in 1970 was 50 million rupees and it increased to

559 million rupees in 1985. This is an increase of 10 times than in 1970.

In this period, the spice export proportion to the world market was 49% from the total

export. In this proportion, except Cinnamon, Pepper shared a proportion of 35%, Cardamom

shared a proportion of 6%, Cardamom (Karadamungu) shared a proportion of 3%, Sadikka

(Nutmeg) shared a proportion of 3% and Wasawasi shared a proportion of 3%.

In 1986, the total spice cultivation acreage (except cinnamon) was 17300 hectares and the

total production per hectare was 66415kg. However, this was not sufficient to fulfill the

total foreign demand and this situation encouraged other countries to enter the market.

Graph 1 Graph 2

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Source –Economic Review - 1987, April

Pepper Cardamom Cloves Nutmeg

Grade 1 340 57 170 227

Grade 2 3500 175 625 1200

0500

1000150020002500300035004000

Production In 1986 Hectares

9%

8%

8%

4%71%

Cultivated Area 1986

Pepper

Cardamom

Cloves

Nutmeg

Other


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Table 3

Yearly Production and Export of Spices (From 1998 - 2008)

When we consider about the spice production of 1998, Pepper and cloves are very

important in the production and the export sector. In that year, Pepper has the maximum

production which is about 17814 MT and the export of Pepper in the same year was

5493080kg. The highest income we earned from spices marked by the income of Pepper.

And the least income earned by Nutmeg, but the least production was Cardamom. The

reduced market value of Nutmeg was another identical feature of that year.

In 1999, the production of spices except cloves (Pepper, Cardamom, Nutmeg, Wasawasi)

have decreased and the income earned from Pepper export has decreased comparing with

the other spices. Reasons for this reduction are the decrease of production and the price

decrease of Pepper in the world market. And the other reason was the decrease of demand

to Sri Lankan Pepper in the world market. However, this year shows an increase in the

production of cloves. This enabled this year to earn more foreign income than the early

year. Although the Cardamom production reduced than in the early year, the foreign

income earned from cardamom were greater than early years.

Table 1

1998 Production (KG) Export (KG) Export (Value) (RS.) Peppar 17814000 5493080 17180786.87 Cloves 4365000 1454873 1212991.15 Cardamom 1187000 16341 115003.90 Nutmeg 860368 1045392.45 Mace 38456 191059.59

Source – Department of Population & Census

Table 2



Table 3




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In 2000, it seems that the production of almost every kind of spice has decreased except

Pepper and Cardamom which show the maximum production decrease. This has lead to the

decrease in export also. Due to the variations of prices in the world market for spices, the

price of Cardamom increased and the price of Pepper increased slightly. Therefore,

however, with the price variation of Cloves, the production and the export decreased and it

lead to a 1/4 price reduction than in the early year. The export of Wasawasi showed a

growth of 1/3 and earned more foreign income than in the early year.

When we consider the year 2001, we can see a pull-back in all the kinds of spice export. The

terrorist attach which hit America's and the World's economy affected the whole world.

With this, the spice market also was affected. This lead to a decrease in demand and with

this decrease in demand, the export income earned from spices in that year decreased. This

did not affect the production directly, but the incomes of spices except Pepper were

affected. Although the price of the rest of spices decreased, we can see an increase in the

price of Cloves. With this, Clove earned 4 times large income than in the early year.

However, with the price variation of Pepper, we can see a 3 times large decrease in the

whole economic value of spices. This can be introduced as a special situation which shows

an increase in production but a decrease in income. With this decrease of production and

export, the production and export values of Cloves, Cardamom and Wasawasi have

decreased compared to the early year.

With the world economic crises occurred due to the terrorist attach to America, the

economy of 2002 also decreased. But in 2002, the income earned from spice export

increased. As an instance, the total export income earned from Pepper increased by about 3

times and also the export production also increased by 4 times than in the early year.

Table 4



Table 5




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In 2002, although the production of Cloves a decrease, the income earned from Cloves

showed an increase. This is an important and a special situation where the production has

decreased but the income has increased. The high demand for cloves caused this situation.

In 2002, the production of Cardamom shows a growth of 8MT. In 2002, although the export

quantity was less than 2001, with the increase in price, the export income in 2002 increased.

The high quality and the scarcity of Sri Lankan spices lead the market to this situation.

Export quantity of Wasawasi increased by a little amount. But the income increased with a

higher value compared to the little increase in production.

In 2003, Cloves export was a major factor in spice export market. In 2003, Clove production

decreased and also the Clove production and export showed a clear pull-back. The reason

for this was the economic pull-back occurred in Europe. As a whole, the production and the

export quantity of Pepper and Cardamom showed a growth. The income earned from

Pepper export decreased. But the stable growth of the foreign price for Cardamom showed

a growth in the whole industry. And also the export quantity of Cardamom and Wasawasi

increased than in the early years. This earned a high income from abroad by Cardamom and

Wasawasi. Among these two, Cardamom had the highest value.

In 2004, Pepper production has increased. But the export has decreased greatly. In 2003,

export was 7740803. But in 2004, it has decreased to 4851615 which about a half of the

early year's export. With that, the income earned from Pepper has also decreased. But this

decrease of income is less than the decrease of export quantity. In the same year, Clove

Table 6



Table 7




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production has decreased by about 4000 MT. And the export quantity has an extreme

decrease. In 2003, we can see very special situation in the Clove export market. The export

quantity was 24894085 in 2003 and in 2004, it was only 2977039 which more than 10 times

less than the early year's export. But the thing is that although the export has decreased by

10 times, the income has increased by about 4 times. The reason for this is the scarcity of

Cloves in the world market. This year, Cardamom production has decreased from 1053 MT

to 747 MT, but the export has increased from 3666 kg to 4406 kg. Although the export

quantity has increased, the export value has decreased from Rs. 8154133 to Rs. 5399004.

The quality decrease has affected this decrease in value. In 2004, the export quantity and

the export value both have decreased.

When we consider the year 2005, the production of Pepper has slightly decreased from

18561 MT to 18292 MT. But the export has doubled than in the early year. With this

increase, the income also has increased from Rs. 934046595 to Rs. 1227168421. This feature

can be seen in Cloves also. The cloves production has decreased from 3619 to 3262 MT and

the export has doubled. But the special feature we can see is that the export value has not

increased by such an amount. When we consider about the production and the export of

Cardamom, the production has slightly decreased but the export has a growth of more than

2 times. And the export value has increased by about 3 times. Nutmeg's export has

increased from 1241733 MT to 1709740 MT and the export value has increased from Rs.

394357214 to Rs. 567815827. As we know, in December, 2004, Tsunami hit Sri Lanka's

economy greatly. But as we can see, the spices market has not affected by the Tsunami. As

spices are cultivated in inland areas and as the Tsunami hit the coastal areas, the market

showed a steady growth in this year also.

Table 8




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In 2006, the Pepper production and the export quantity have increased slightly. But we can

see a clear increase in export value of Pepper. The scarcity of Pepper in the world market is

the reason for this. The situation in Clove market is different. There, the production has a

slight decrease and the export has decreased to a half of the early year's export. With this,

the export value has also decreased. The Cardamom export has reduced to about half of the

early year's export. But, as we can see, the export value has increased from Rs. 15596435 to

Rs. 16530315. In Nutmeg market, the export quantity and the export value both has

decreased.

In 2007, we can see that the production and the export quantity have slightly increased and

the export value of Pepper has doubled (From Rs. 1774215273 to Rs. 35082852277). But the

situation in Clove market is different. All the production, export quantity and the export

value have decreased. Cardamom production has decreased, but the export quantity has

increased from 5861 kg to 7586 kg. Although the export quantity has increased, the export

value shows a decrease from Rs. 16530315 to Rs. 14205460. Nutmeg export quantity and

the export value have increased slightly. But the proportional increase of export value is

larger than the export quantity.

Table 10

2007 Production (KG) Export (KG) Export (Value) (RS.) Pepper 19393000 9015365 350828522.77 Cloves 3066000 2325977 10185224.54 Cardamom 500000 7586 142054.60 Nutmeg 1542260 6584409.63 Mace 238889 1838362.82


Table 9




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When we consider the 2008 spice market, the production of Pepper has increased. But the

export quantity has decreased. The decrement of export quantity has affected the export

value. In 2007, export value was Rs. 35082852277. But in 2008, it has become Rs.

2841258849. This is a decrease of more than 10 times. This decrement has affected the

whole spice export market to reduce its total export value. The production of Cloves has

increased from 3066 MT to 3989 MT. Although there is a slight increment in production, we

can see a 3 times growth in export. With this growth, the export value also has increased

from Rs. 1018522454 to Rs. 3575871140. The Cardamom production has decreased from

500 MT to 397 MT. But the export quantity has increased from 7586 kg to 12058 kg. With

this, the export value also has increased. But as we can see, the proportionate growth of

export value is more than the value of export quantity. The export value has doubled in

2008 compared to 2007.

Table 11




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SUMMARY

With all these facts, we can see that the production and export of spices has decreased

comparing with the British colonized period. At that time, spices were among the major

income sources of Sri Lanka. But with the introduction of commercial crops such as Tea,

Rubber, Coffee, the place and the attention paid to spices were reduced. Now it has become

a minor export of Sri Lanka.

But as we can see, the period from 1970 shows a gradual increase in spice production and

export. With the introduction of open economy to Sri Lanka, the economy has widened and

the export market increased with time. As a result of this, the income earned from the

export of spices is becoming important.

According to the data sources, the share of spices out of all the exports is as follows.

2004 2005 2006 2007 2008

1.30% 1.51% 1.49% 1.63% 1.86%

We can see that the share has increased from 1.30% (in 2004) to 1.86% (in 2008). With this,

we can come to a conclusion that the spice industry of Sri Lanka is becoming more and more

important.

On the other hand, Sri Lanka is a very famous country for its spices since the colonized

period. With this reputation, there is a good place for Sri Lanka's spices. As a result, Sri

Lanka plays a major role in Spice market of the world. But, unfortunately, the producers of

Spices in Sri Lanka sometimes tend to earn more profit by the production. This spoils the

reputation of Spices of Sri Lanka among the foreigners. As an example, in the Pepper

production, producers use hot water to boil Pepper and after boiling, Pepper dries soon.

This enables to produce Pepper quickly. But the Pepper produced in this method quickly

expires. When the customers of Sri Lankan spices got to know that the quality of Sri Lankan

spices is not good, the demand for Sri Lankan spices decrease. Such situations greatly affect

the export market of spices.


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Bibliography

• NA, “Spices In Sri Lanka”, Economic Review, Vol 1, No 1, 1983.

• NA, Central Bank Annual Report 1988, Central Bank, Colombo, 1999

• NA, Central Bank Annual Report 2008, Central Bank, Colombo, 2009

• NA, Annual Report 1998, Export Agriculture Department, Kandy, 1999

• NA, Annual Report 2008, Export Agriculture Department, Kandy, 2009

• NA, Export Analysis 1998, Hektor Kobbakaduwa Agriculture Research Institute,

Colombo, 1999

• NA, Export Analysis(Trends) 2006, Hektor Kobbakaduwa Agriculture Research

Institute, Colombo, 2007

• Chomchalow, Narong, NY, “Spice Production in Asia - An Overview” Assumption

University Press, Thailand.

• NA, Statistic Data Report , Census Department, Colombo 2009

• http://www.spicegardenssrilanka.com viewed 05th march 2010.

• http://www.srilankabusiness.com/ viewed 07th march 2010.

http://www.spicegardenssrilanka.com/�

production & export of spices in sri lanka

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