Kandaudahewa & Vithana

08/BA/15476 & 08/BA/15761

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

Table 2: 1999 Production and Export of Spices 06

Table 3: 2000 Production and Export of Spices 06

Table 4: 2001 Production and Export of Spices 07

Table 5: 2002 Production and Export of Spices 07

Table 6: 2003 Production and Export of Spices 08

Table 7: 2004 Production and Export of Spices 08

Table 8: 2005 Production and Export of Spices 09

Table 9: 2006 Production and Export of Spices 10

Table 10: 2007 Production and Export of Spices 10

Table 11: 2008 Production and Export of Spices 11

List of Graph

Graph 1: Cultivated Area 1986 05

Graph 2: Production in 1986 05

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 Kandaudahewa & Vithana
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Spice and Sri Lanka

Following are some of the commonly used spice mixtures from spice gardens of Sri Lanka and
around the world for food flavouring:

• Cinnamon • Cardamom • Sadikka

• Cloves • Nutmeg • 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

Spice Distribution of Sri Lanka

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

01) Historical Period

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

Historical Period

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.

The period under colonization and the period after independence.

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.

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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08/BA/15476 & 08/BA/15761
Spices – Production and Export

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.

The export of spices in British colonized period

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.

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.

The period after the Independence

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.

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

Cultivated Area 1986 Production In 1986 Hectares

4000
3500
Pepper
9% 3000
8% 2500
Cardamom
\ 2000
8%
Cloves 1500
1000
4%
71% Nutmeg 500
0
Other Pepper Cardamom Cloves Nutmeg
Grade 1 340 57 170 227
Grade 2 3500 175 625 1200

Source –Economic Review - 1987, April

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

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

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.

Table 2

1999 Production (KG) Export (KG) Export (Value) (RS.)

Peppar 17265000 3753839 13057135.39
Cloves 4392000 3441632 4137675.91
Cardamom 1118000 17673 133360.12
Nutmeg 1041182 2577399.20
Mace 107090 537157.76
Source – Department of Population & Census
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 3

2000 Production (KG) Export (KG) Export (Value) (RS.)

Peppar 16831000 4855259 15873389.43
Cloves 4385000 940154 3045389.33
Cardamom 1079000Table 3 8453 65829.73
Nutmeg 1175878 3420090.84
Mace 131938 780537.34
Source – Department of Population & Census

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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.
Table 4

2001 Production (KG) Export (KG) Export (Value) (RS.)

Peppar 17091000 2161858 5321702.32
Cloves 4126000 196870 11597744.17
Cardamom 1006000 2891 49349.02
Nutmeg 1048520 3015985.91
Mace 92762 448545.65
Source – Department of Population & Census

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.

Table 5

2002the world economic

With Production
crises (KG) Export
occurred due to (KG) Exportto(Value)
the terrorist attach (RS.) the
America,
Peppar 17676000 7589113 14088118.10
economy
Cloves of 2002 also decreased. 4035000
But in 2002, the income earned from 27033955.13
40436009 spice export
CardamomAs an instance, the total export
increased. 1014000
income earned from 2819 60384.49
Pepper increased by about 3
Nutmeg 1508960 4373202.71
times
Maceand also the export production also increased by 4 times than in the early year.
155825 1067023.59
Source – Department of Population & Census

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08/BA/15476 & 08/BA/15761
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.

Table 6

2003 Production (KG) Export (KG) Export (Value) (RS.)

Peppar 17856000 7740803 12333031.74
Cloves 3461000 24894085 5759983.77
Cardamom 1053000 3666 81541.33
Nutmeg 1655370 4989615.14
Mace 176187 1159510.16
Source – Department of Population & Census

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.

Table 7
2004 Production (KG) Export (KG) Export (Value) (RS.)
Peppar 18561000 4851615 9340465.95
Cloves 3619000 2977039 13595995.00
Cardamom 747000 4406 53990.04
Nutmeg 1241733 3943572.14
Mace 127832 926287.16
Source – Department of Population & Census

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

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08/BA/15476 & 08/BA/15761
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.

Table 8

2005 Production (KG) Export (KG) Export (Value) (RS.)

Peppar 18292000 8053904 12271684.21
Cloves 3262000 5516500 17622540.67
Cardamom 709000 11336 155964.35
Nutmeg 1709740 5678158.27
Mace 225446 1742489.90
Source – Department of Population & Census

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.

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Table 9

2006 Production (KG) Export (KG) Export (Value) (RS.)

Pepper 18601000 8191332 17742152.73
Cloves 3136000 2974646 13068165.50
Cardamom 685000 5861 165303.15
Nutmeg 1502792 5073918.77
Mace 166289 1487252.89
Source – Department of Population & Census

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.

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
Source – Department of Population & Census

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.

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Table 11

2008 Production (KG) Export (KG) Export (Value) (RS.)

Pepper 22870000 6236763 28412588.49
Cloves 3989000 7403991 35758711.40
Cardamom 397000 12058 289887.96
Nutmeg 1589483 7884232.55
Mace 177375 1826039.63
Source – Department of Population & Census

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.

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

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