The Association - SAPPTAsappta.org/wp-content/uploads/2013/08/SAPPTA-Annual...3 The Spices & Allied Products Producers’ and Traders’ Association Annual Report – 2013/2014 LIST

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The Spices & Allied Products Producers’ and Traders’ Association Annual Report – 2013/2014

THE ASSOCIATION With the disbanding of the Cardamom Traders Association and the Sri Lanka Association of Producers and Exporters of Spices and Other Products (SLPESOP), The Spices and Allied Products Traders’ Association (SAPTA) was formed in 1984. With the objective of enlarging the scope of the Association, it was re-named The Spices and Allied Products Producers’ and Traders’ Association (SAPPTA) in 1997.

SAPPTA was primarily founded to enable its members, comprising exporters, producers, processors, dealers, brokers and other service providers associated with the spice industry and other such agricultural products, to make representation, with one voice to the State Authorities on policy matters relating to them and to act in unison in strategies on increasing their production and exports from Sri Lanka. The Association also instils discipline and order within the Industry. The Association’s interests span the entire spectrum of spices, like cinnamon, pepper, cloves, cardamoms, nutmeg, mace vanilla, garcinia, tamarind and other agricultural crops including cashew, arecanuts, cocoa, coffee and also essential oils, oleoresins, herbal products and organic products.

SAPPTA promotes regular dialogue with the State Agencies and other policy making bodies and maintains a good rapport with the Department of Export Agriculture of Sri Lanka (DEA), the Export Development Board of Sri Lanka (EDB), the Department of Customs, the Department of Commerce, the Ministry of Agriculture, the Ministry of Trade and the Ministry of Finance, as well as Foreign Agencies such as International Trade Centre Geneva, International Pepper Community in Jakarta, the United States Agency for International Development (USAID) and the Asian Development Bank (ADB). SAPPTA also works in harmony with the recently incorporated Spice Council, the formation of which it facilitated.

In the Thirty years’ of its existence, SAPPTA has developed into a strong Institution with around 90 members, comprising exporters, producers, brokers, processors, dealers and those offering services to the industry. As such, it has truly become the ‘VOICE’ of the Spice Industry.

The Association’s activities are managed by a Management Committee annually elected from among the exporters, producers, processors, dealers and service sectors. The Colombo Brokers’ Association is invited to nominate a representative to serve on the Committee. Sub-Committees are appointed to overview every sector and are headed by members of the Committee, who act as Convenors.

SAPPTA is affiliated to the prestigious Ceylon Chamber of Commerce, which provides the Association with Secretarial services. SAPPTA is also a member of the Exporters’ Association of Sri Lanka.

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THE COMMITTEE 2013/ 2014

CHAIRMAN - Mr. Sarada de Silva

1ST VICE CHAIRMAN Mr. K.Ramachandran

2ND VICE CHAIRMAN

Mr. Anusha Perera

EXPORTER REPRESENTATIVES Intercom Ltd.

Jayes Trading Co. (Pvt) Ltd Expolanka Commodities (Pvt) Ltd

Saboor Chatoor (Pvt) Ltd Shukra Trading Co. Ltd.

PRODUCER REPRESENTATIVES

Elpitiya Plantations PLC Namunukula Plantations PLC

Maturata Plantations PLC Kotagala Plantations PLC Watawala Plantations PLC

PROCESSOR REPRESENTATIVES

Link Natural Products (Pvt) Ltd L. B Spices Trading (Pvt) Ltd.

DEALER REPRESENTATIVES - VACANT

SERVICE REPRESENTATIVES

SGS Lanka (Pvt) Ltd. Intertek Testing Services Lanka (Pvt) Ltd.

BROKER REPRESENTATIVE - Forbes & Walker Commodity Brokers (Pvt) Ltd.

IMMEDIATE PAST CHAIRMAN - Mr. Viren Ruberu

PAST CHAIRMEN

Mr. C. Dassenaike Mr. S A Cader

LIFE MEMBER

Saboor Chatoor (Pvt) Ltd Malwatte Valley Plantations PLC

NOMINATED (Under rule No. 22.6 – Industrial Expert in the field of Spices and Allied

Products) Mr. F Mushin

Mr. V Abeyratne

SECRETARIAT The Ceylon Chamber of Commerce

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LIST OF MEMBERS

EXPORTER MEMBERS

A. G Masters [Pvt] Ltd 49,10thCross Lane, Centre Road, Borupana Ratmalana

A Baur& Co. Ltd. 5, Upper Chatham Street Colombo 01 A.S Chatoor& Co. Ltd 372, K Cyril C Perera Mw Colombo 13 Abidally Sons (Pvt) Ltd 111, EtampolaWatta Road, Mabole Wattala Adamjee Lukmanjee & Sons Ltd. 140/5,Grandpass Road Colombo 14

Bughary Bio Spices 24, Nuwaratenna Rd Wattegama C. W. Mackie & Co. Ltd 36, D R WijewardenaMw Colombo 10 CBL Natural Foods (Pvt) Ltd 156,Avariwatte Rd, Heenatiyana Devi Trading Co. 125, Bankshall Street Colombo 11 De Silva & Sons G P 171, Galle Road, Rathmalana Eamel Exports Ltd 341, Union Place Colombo 02 Eastern Merchants PLC 341 Union Place Colombo 02 Euro-Scan Exports (Pvt) Ltd 44, Ward Place Colombo 07

Expolanka Commodities (Pvt) Ltd 11 A,, Milepost Avenue Colombo 03 Imperial Spices (Pvt) Ltd 121 A, Biyagama Rd, Peliyagoda Kelaniya Idhrees Traders 195A, Dam Street Colombo 12 Intercom Ltd 129/1A, High Level Road, Kirulapone Colombo 06 Kinetic Trading (Pvt) Ltd 578 B, Nawala Rd Rajagiriya Merchant Lanka (Pvt) Ltd

No. 35/24, Araliya Gardens, Thewatte Road Ragama,

Multi Foods (Pvt) Ltd 22, Sri PriyadarsanaMawatha Colombo 12 Orient Trading Co. (Pvt) Ltd 165, Dippitigoda Road, Dalugama Kelaniya People’s Organisation for Development 197/3A, Padre Pio Mw, Telduwawa Negambo Premawardena Exports Pollewwa Batapola Ranfer International (Pvt) Ltd 36, Ketawalamulla Place Colombo 09 Renuka Enterprises Ltd 69, Sri Jinaratna Road Colombo 02 SDS Spices (Pvt) Ltd No. 17 1/1, Horton Place Colombo 07 Sindbad (Pvt) Ltd 49,10th Lane, Centre Road, Off Borupana Ratmalana Spice of Life (Pvt) Ltd. 264, Grandpass Road Colombo 14 Spiceco Ltd 167, Sri Wickrema Mw, Mattakkuliya Colombo 15 Stassen Exports Ltd 833, SirimavoBandaranayake Mw. Colombo 14 Tropical Island Products 18-1/5, 1sFlr.State Bank of India Bldg. Colombo 01 Union Commodities (Pvt) Ltd. 79, Biyagama Road, Talwatta Kelaniya Worldwide Resourses (Pvt) Ltd 385, Galle Road Colombo 03

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PRODUCER MEMBERS Agalawatta Plantations PLC, No 10, Gnanartha Pradeepa Mawatha, Colombo 08

Agarapatana Plantations PLC 53 1/1, Sri Baron Jayathilaka Mw, Colombo 01. A W M C Bandara Greenwood Estate „A‟ Nawalapitiya Balangoda Plantations PLC Greenwood Estate ‘A’ P.O.Box 6,Palmgarden Ratnapura De Siva & Sons H D 309, Jayantha Weerasekara Mawatha Colombo 10

D T International 20, Frances Rd, Colombo 0 6

Elpitiya Plantations PLC Aitken Spence Tower I, 305, Vauxhall Lane, Colombo 02. E. W. Balasuriya& Co. (Pvt) Ltd 7/2, Sangamitta Mawatha Kandy Green Field Bio Plantations (Pvt) Ltd 23, Braybrooke Street Colombo 02 Hapugastenne Plantations PLC Nambapana, Ingiriya Kahawatte Plantations PLC 52, Maligawatte Rd Colombo 10

Kegalle Plantations PLC 310, High Level Road, Nawinna Maharagama Kotagala Plantations PLC 53 1/1, Sri Baron Jayathilake Mw, Colombo 01 Kelani Valley Plantations PLC 400, Deans Rd, Colombo 10 Lalan Eco Fields, (Pvt) Ltd,

236/15, Vijaya Kumarathunga Mawatha, Polhengoda,

Kirulapone

Maturata Plantations Ltd No. 168, Negombo Rd, Peliyagoda. Medatenna Estate 57, Sri SangarajaMw Colombo 10 Mirissa Hills (Pvt) Ltd Handunugoda Estate, Titagalla Ahangama Namunukula Plantations PLC 310, High Level Rd, Nawinna Maharagama P W Rodrigo Estates Ltd. 10, Templers’s Avenue Mt. Lavinia PussellawaPlantations Ltd 168, Negombo Rd Peliyagoda SHM Spices 17A, Brodie Street Matale Watawala Plantations PLC 60, Dharmapala Mw Colombo03

PROCESSOR MEMBERS Brown & Company PLC,

34, Sri Mohamed Macan Markar Mw

Colombo 03 Citro Essential Oils (Pvt) Ltd. Citro Building,15C, Old Quarry Rd Mt. Lavinia International Commodity Traders (Pvt) Ltd, 148/1, Kynsey Road Colombo 08

Paints & General Industries (Exports) Ltd. 5A, 6th Lane, Maligawa Road Ratmalana

DEALER MEMBERS

Jayalanka Traders 104/2, Dam Street Colombo 12

Serendib Traders 74, St. Joseph’s Street Colombo 14 Spices @ K K 136 /A, Dam Street Colombo 12

BROKER MEMBERS

Commodity Consular’s (Pvt) Ltd. 49/4, Sir Chithtampalam A Gardiner Mawatha Colombo 02 Chrisslogix (Pvt) Ltd, 120/11 C, Vidya Mw, Colombo 7 Eastern Brokers Ltd. 280, Dam Street Colombo 12 Forbes & Walker Commodity Brokers Ltd. 46/38, Navam Mw Colombo 02 J. D. & Sons (Pvt) Ltd. 37/3, Pedris Road Colombo 03

Lanka Commodity Brokers Ltd. 97, AnandaRajakaruna Mw Colombo 10

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The Spices & Allied Products Producers’ and Traders’ Association Annual Report – 2013 / 2014

SERVICE PROVIDER MEMBERS

Adamson Company

209, Keyzer Street

Colombo 11

CIC Agri Businesses (Pvt) Ltd 205 1/1, D. R. Wijewardena Mw Colombo 10 Intertek Lanka (Pvt) Ltd Intertek House, 282, Kaduwela Rd, Battaramulla S.G.S. Lanka (Pvt) Ltd 140, Vauxhall Street Colombo 02

Trade Solutions Lanka (Pvt) Ltd 89/1A, Piyadasa Sirisena Mw, Maradana Colombo 10

LIFE MEMBERS

Akbar Brothers (Pvt) Ltd

334, T. B. Jayah Mw

Colombo10

Asia Siyaka Commodities (Pvt) Ltd. 120/15, VidyaMawatha Colombo 07 Chrissons (Pvt) Ltd 395/4, Kasagahawatte Lane, Old Kottawa Rd, Nugegoda EOAS International 34/3 Lumbini Avenue Ratmalana Gamwasama Estate Ltd 49,10th Lane, Centre Road, Off Borupana Ratmalana Ishana Spice Export 37, Old Moor Street Colombo 12 Jafferjee Brothers 150, St. Joseph Street, Colombo 14 Jayes Trading Co. 106, Bankshall Street Colombo 11 L B Spice Trading Pvt Ltd 220, Old Moor Street Colombo 12 Link Natural Products (Pvt) Ltd. CIC House, 199 Kew Road Colombo02 Malwatte Valley Plantations PLC 280, Dam Street Colombo 12 Meezan& Co., (Pvt) Ltd 366/10, Avissawella Road Wellampitiya SaboorChatoor (Pvt.) Ltd. 20, Sri WickramaMawatha Colombo 15 Shukra Trading Company 127, Grandpass Rd Colombo 14 Sripathi Enterprises No.131, Lokilangamuwa Kotugoda[wp]

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AN OVERVIEW OF THE INDUSTRY

EXPORTS – VOLUMES & VALUE

The following table indicates the volume and values of exports of agricultural products for the years 2011- 2013.

TABLE 1 VOLUME AND VALUE OF EXPORTS OF AGRICULTURAL PRODUCTS

Products

H. S. Code

2011 2012 2013

Volume (Tonnes)

Value (Rs. Mn)

Volume (Tonnes)

Value (Rs. Mn)

Volume (Tonnes)

Value (Rs. Mn)

Arecanut 08029 1483 177 2,329 457 3,175 644

Cardamom

090830 090831 090832 11 65 9 28 4 21

Cashew Nuts 080132 310 288 145 170 50 77

Cinnamon 0906 13,485 13,394 14,435 16,655 13,866 17,189

Cloves 0907 3,569 3,675 1,404 2,061 5,478 6,361

Clove Stems

09070030/ 09071013 09071093 1,624 235 1,487 248 1099 237

Cocoa Beans 18010010 0.1 0.017 24 0.493 22 7

Coffee 09011110 2 0.706 0.29 0.644 5 3

Essential Oils 330190 348 1,927 400 2,146 593 2,918

Nutmeg 090810 / 090811 1,668 2,068 1,389 1,948 1,657 1,802

Mace 090820 090821 205 756 162 496 287 626

Pepper 0904 5,412 3,488 10,825 9,014 21,695 16,592

Garcinia 08134090 880 219 1,540 324 4,037 962

Tamarind 08134010 499 22 2,209 74 291 13

Total 29,496 26,315 36,358 33,622 52,259 47,452

Source: Sri Lanka Customs

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TABLE 2 VOLUME AND VALUE OF EXPORTS OF ESSENTIAL OILS

Products HS Code

2011 2012 2013 (b)

Volume (Tonnes)

Value (Rs. Mn)

Volume (Tonnes)

Value (Rs. Mn)

Volume (Tonnes)

Value (Rs. Mn)

Cinnamon Leaf oil 33019030 231 498 318 482 265 480

Pepper oil 33019093 8 151 12 279 8 101

Nutmeg oil 33019092 22 235 25 334 33 420

Cardamom oil 33019095 1 75 0.8 43 2 74

Citronella oil 33019020 11 28 12 28 14 46

Cinnamon Bark Oil 33019040 30 350 9 259 17 323

Clove Oil 33019050 13 45 3 33 4 39

Total 316 1,382 379.8 1,458 143 1,483

Source: Sri Lanka Customs ( b) Provisional

PRODUCTION

Agricultural crops such as Cinnamon, Pepper, Nutmeg, Coffee, Cocoa and Arecanuts showed mixed performance in 2013.

TABLE 3 PRODUCTION OF EXPORT AGRICULTURE CROPS

2011-2013 (Metric Tonnes)

CROP 2011 (Tonnes)

2012 (a) (Tonnes)

2013(b) (Tonnes)

Coffee 2,974 3,000 3,000

Cocoa 525 513 515

Cinnamon 18,250 17,165 17,500

Pepper 10,800 18,604 28,000

Cloves (with stem) 5,533 4,009 6,190

Cardamom 57 80 50

Nutmeg & Mace 2,116 2,002 2,545

Arecanuts 24,485 23,450 24,000

Total 64,740 68,823 81,800

Source: Dept. of Export Agriculture(a) Revised (b) Provisional

Note by DEA: Since accurate data on bearing extent & productivity are not available, production estimates are made considering exports/imports & volumes of domestic consumption. Per capita consumption figures available with the DCS have been used for the estimation of household sector consumption. In addition to the above, a substantial quantity has been estimated for the use of industry sector, catering services, indigenous medicine & un-reported exports etc.

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The area under cultivation for year 2013 is set out in Table 4 against the figures of the previous two years.

TABLE 4 EXPORT AGRICULTURE CROPS – EXTENT (Hectares)

Commodity 2011 2012(a) 2013(b) Cardamom 2,795 2,798 2,800 Cinnamon 30,523 31,049 31,551 Citronella 1,174 1,177 1,177 Clove 7,605 7,612 7,622 Cocoa 2,300 2,336 2,365

65 Coffee 6,040 6,093 6,117 Nutmeg 954 978 993 Pepper 31,296 31,667 31,997 Total 82,687 83,705 84,622

Source: Department of Census & statistics & Department of Export Agriculture

(a) Revised (b) Provisional

TABLE 5 AVERAGE FARM GATE PRICES – 2011 TO 2013

(Rs. per kilo)

Commodity Average Price 2011 2012 2013

% Change 2012 - 2013

Cinnamon 921.85 1,042.08 1,109.41 6.46

Clove 1,250.35 1,159.70

1,233.93 6.4

Cocoa 322.13 266.92 193.97 -27.33

Coffee 234.09 249.51 220.70 -11.55

Pepper 691.90 832.05 731.06 -12.14

Cardamom 2,713.12 1,945.75 1,731.68 -11

Citronella 1,589.09 1,210.14 1,751.63 44.75

Nutmeg (w.s) 742.53 838.45 683.88 -18.44

Mace 2,847.77 2,096.51 1,536.27 -26.72

Citronella 1,589.09 1,275.33 1,751.63 37.35

Ginger (Raw) 76.51 106.78 214.40 100.79

Turmeric (Raw) 47.70 36.54 34.54 -5.47

Source: Department of Export Agriculture

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INSTITUTIONAL SUPPORT

The Department of Export Agriculture (DEA)

The Department of Export Agriculture continues to give extension services to the producers. Continuous support and assistance provided by the regional officers and extension officers of Department of Export Agriculture to the spice sector has helped the sector to perform extremely well. The industry is of the opinion that one of the factors responsible for a record export of Pepper during the year under review is the good extension services extended by the officers of the DEA.

The Export Development Board (EDB)

Pure Ceylon cinnamon logo

The issuing of license for eligible exporters to use the Pure Ceylon cinnamon logo on cinnamon packs was held at Sri Lanka Export Development Board (SLEDB) auditorium on Friday, April 04, 2014. The SLEDB requested pure Ceylon cinnamon manufacturing companies in Sri Lanka that wish to use pure Ceylon Cinnamon Lion Logo on cinnamon packs to forward completed applications in respect of each product design to the Sri Lanka Export Development Board. Applications were called from companies eager to use Pure Ceylon Cinnamon Lion Logo on their cinnamon packs. These companies who will use the pure Ceylon cinnamon lion logo on their cinnamon packs will have to obtain prior approval from the Export Development Board. Approval of the Cabinet has been granted for the Sri Lankan Export Development Board to hold the ownership and custodianship of the name „Ceylon Cinnamon‟ on behalf of the people of Sri Lanka. The SLEDB is in the process of promoting Ceylon Cinnamon as an international brand in the global market. The pure cinnamon logo can be used only on Ceylon Cinnamon packs containing 100% pure Ceylon cinnamon manufactured in Sri Lanka. This will be made on the recommendation of relevant government institutions based on the test reports and field observations.

EDB advisory committees The Export Development Board (EDB) has established 26 new advisory committees covering key product sectors. The 400 members of these committees represent the public and private sectors. At a ceremony on July 11, 2013, letters of appointment were handed over to them by the Minister of Industry and Commerce Hon. Rishad Bathiudeen and EDB Chairman Bandula Egodge. One such Advisory Committee relates to “Spices & Allied Products” and five of the SAPPTA members Messrs Sarada de Silva (Chairman of the Advisory Committee), Gulam Chatoor, M.C.M Zarook, S.A Cader and Viren Ruberu have been appointed by the Hon. Minister to serve on this Committee.

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PRODUCTS

ARECANUTS

Prices remained steady between Rs.210/- and Rs.240/- per Kg throughout the period April 2013 to March 2014, except for a brief period from end November to Mid December when prices reached Rs.270/-.

CLOVES

Exports in 2013 totalled 4,369 tonnes, of this quantity India imported 3,050 tonnes (70%). The other importing countries were UAE, Saudi Arabia and Pakistan. Local Prices The local prices eased a bit and then continued to improve during the year under review. The following prices prevailed :

April 2013 to Early May Rs.1,100 to Rs.1,250 Early May to Mid June Rs.1,075 to Rs.1,150 Mid June to Mid November Rs.1,250 to Rs.1,400 Mid November to End March 2014 Rs.1,500 to Rs.1,575

The import tariff in India on Cloves from Africa remained at 4% and other sources 23% as against 0% from Sri Lanka.

PEPPER

Exports from Sri Lanka in 2013 totalled 21,330 tonnes which was the highest figure ever achieved. The record exports can be attributed to good weather conditions, proper fertilization and good extension services extended by the field officers of the Export Agriculture Department. History has been created as for the first time Sri Lanka exports have overtaken Malaysia (18,000) and India (15,250). Of this figure of 21,330 tonnes, exports to India totalled 7,272 tonnes (34%). These exports to India were to their Export Oriented Units and under the Indian Advance License System. No exports were made under the Indo Sri Lanka Free Trade Agreement. The Association continued to endeavour to have the CAP imposed in 2006 restricting the imports from Sri Lanka to 2,500 tonnes, removed. Representations have been made at regular intervals for the removal of the CAP as the Spice Industry fields it is against the spirit of the Agreement. International Prices Prices fluctuated between USD 6,000 and 7,000 during the year. The price is based on C&F Europe and the origins are Brazil, India, Indonesia, Malaysia and Vietnam.

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Prices in Sri Lanka The prices that prevailed in Sri Lanka are listed hereunder:

From April to early September 2012 Rs.660 to Rs.760 Early September to end October Rs.760 to Rs.850 November to March 2013 Rs.850 to Rs.990 End March 2013 Rs.880 to Rs.890

WORLD EXPORT FIGURES OF PEPPER FOR 2012 AND 2013

Country

2012 2013*

Black White Total Black White Total

Brazil 27,233 1,890 29,123 28,595 1,990 30,585

India 17,436 965 18,401 16,500 1,000 17,500

Indonesia 49,500 13,107 62,608 40,000 15,000 55,000

Malaysia 8,440 2,014 10,454 9,918 2,187 12,105

Sri Lanka 10,000 29 10,029 15,950 50 16,000

Vietnam 97,200 19,350 116,550 112,181 22,261 134,442

China - 2,563 2,563 - 1,606 1,606

Others 10,729 - 10,729 11,389 - 11,389

Total 220,538 39,919 260,457 234,533 44,094 278,627

Source: IPC, Jakarta

* Note: As estimated by International Pepper Community at its annual session held on 11th to 13th November 2013.

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WORLD PRODUCTION OF PEPPER IN TONNES

Year Brazil India Indonesia Malaysia Sri

Lanka Vietnam Others Total

1985 30,000 55,000 41,000 19,000 1,677 1,317 13,468 161,462

1990 30,514 65,000 53,000 31,000 1,990 8,623 25,586 215,713

1995 22,000 55,000 64,900 14,950 6,030 20,000 24,690 207,570

2000 29,024 58,000 85,250 24,000 11,850 36,000 28,035 272,159

2001 43,000 79,000 65,000 27,000 8,308 61,600 36,395 320,303

2002 45,000 80,000 75,000 24,000 13,310 82,500 38,460 358,270

2003 50,000 65,000 80,000 21,000 13,274 93,500 48,500 371,274

2004 45,000 62,000 58,000 20,000 11,060 110,000 51,659 357,719

2005 44,500 70,000 64,000 19,000 13,316 104,500 37,770 353,086

2006 44,500 55,000 52,000 19,000 13,575 110,000 36,400 330,475

2007 42,500 50,050 58,000 20,000 15,265 93,500 37,500 316,815

2008 41,000 50,100 52,000 22,000 13,338 99,000 45,600 323,038

2009 40,700 50,000 50,000 22,000 13,762 123,750 44,650 344,862

2010 34,000 50,000 59,000 23,500 16,730 110,000 45,150 338,380

2011 35,000 48,000 47,000 25,600 13,000 110,000 43,800 322,400

2012 33,500 43,000 75,000 23,000 18,600 120,000 45,720 358,820

2013 (e) 33,000 58,000 70,000 25,000 23,000 118,000 46,800 373,800

Source: IPC, Jakarta Note: Production of pepper for 2013 is still estimate, taken from country statement reported in the last IPC Session considering export performance achieved in 2013; some revision on the production figures may take place

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COCOA

During the year prices remained stable around Rs.350/- to Rs.400/- per Kg. There does not appear to be any new planting taking place. Indigenous manufacturers of Chocolates continue to draw their supplies from external sources as the local supplies are not sufficient to fulfill their requirements. Exports of only 21 tonnes are reported, to India. Imports of 2,002 tonnes into Sri Lanka have taken place as stated hereunder:

From Ghana 1,525.0 tonnes From Nigeria 450.0 tonnes From Indonesia 27.5 tonnes 2,002.5 tonnes

CASHEW

Sri Lanka‟s crop of raw Cashew nuts was approximately 6,000 tonnes. Around 90% of the crop may have been consumed in the local market. The prices of Raw Cashew nuts were around Rs. 200/- to Rs.300/- per Kg. During the season in April, May, June prices came down to Rs. 180.00 and during the off Season the prices went up to Rs.300/- per Kg. Cashew kernels were traded in the local market from Rs.1,500/- to Rs.1,800/- per Kg. 60 tonnes of Cashew kernels have been exported during the period under review as organic Cashew kernels. 800 tonnes of Raw Cashew nuts were allowed to be import from African countries during the off Season. Sri Lanka Cashew Corporation has distributed Cashew Plants to growers. New lands mainly in the North and East have been cultivated with improved varieties. 150 tonnes of processed Cashew kernels were imported from Vietnam and India during the period. There is a great potential for the development of the Cashew Industry in Sri Lanka. If it is done, it will lead to the creation of a lot of employment.

ESSENTIAL OILS

Essential oils across the board have remained somewhat flat in 2013 and with the recession having an impact on the end users primarily in Europe and US, buyers are not looking at taking long positions. The burden of holding inventory is on the suppliers. In 2013, most crops, in particular Black pepper and Cinnamon showed a drastic increase in production and availability of raw material. Export statistics show a growth too in the export volumes and values of all essential oils produced in Sri Lanka. The worrying factor is the accuracy of the statistics. Thus 2013 could be considered a good year in terms of growth of volume and value considering the current economic status prevailing in the global market place.

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Looking forward, the industry must move into some form of backward integration and moving up the value chain. If these factors are not taken seriously, then we may face the possibility of losing the markets and be priced down in terms of unit cost in the not too distant future. The positive aspect is the growth in Asia in particular India and China. These markets should be pursued rather than relying on the traditional buyers.

CARDAMOMS

The production was yet under the attack of „Thrips‟ and many growers have abandoned the plantations due to this reason. Demand was high and the prices of available best were around Rs 2500/- to Rs.2800/-. During the year mixed quality parcels were sold between Rs.1400/- to Rs.1750/-. Cardamoms with „Thrips‟ were also picked by curry mix grinders at around Rs.1300/- to Rs.1400/-. Fair volumes of cardamoms from other origins were available in the market at around Rs 1500/- per kilo from time to time, though the demand for Sri Lankan cardamoms were higher during all times.

COFFEE

Hardly any quality coffee was available in the market during this year. The usual DMQ (Dealer Mixed Quality) traded between Rs.225/- to Rs.250/- during majority of the period under review, with few short spells where prices reached up to Rs.275/- . Production remained somewhat unchanged, whilst the demand was steady. Better demand was evident from Northern and Eastern provinces, especially during festive seasons.

GARCINIA (GORAKA)

Garcinia is becoming a large export item as can be seen from the statistics in Table 1. Exports have reached 4,037 tonnes in 2013 as against 2,209 tonnes in 2012 and around 400/500 tonnes in 2010 and 2011. India, as usual, was the largest buyer in 2013 taking 3,300 tonnes (81.7%). The other large buyer was China.

NUTMEGS

Exports in 2013 at 1,657 tonnes showed a slight improvement over 2012 (1,389 tonnes) India took around 727 tonnes followed by Pakistan and UAE. In the local market Nutmeg (In the shell) faq was sold as under:

During April – May 2013 Rs.825 to Rs.975 per Kg During June Rs.700 to Rs.775 per Kg From July to end March 2014 Rs.600 to Rs.675 per Kg

MACE

A considerably larger quantity of Mace at 289 tonnes was exported in 2013, as against 162 tonnes in 2012. India took around 254 tonnes followed by Germany and Bangladesh. Following prices prevailed during the year under review:

April to Mid November 2013 Rs.1,550 to Rs.1,800 per Kg Mid November to end March 2014 Rs.1,800 to Rs.2,150 per Kg On 31st March 2014 Rs. 1,950 per Kg

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CINNAMON The Cinnamon Industry has done extremely well, during the year, prices being the highest ever. With the prices increasing quality has suffered. Because of the very good prices that have prevailed no effort has been made by the producers to improve the quality. Actually the quality has dropped drastically and continues on the downward path. It is to be really appreciated that the Ministry of Minor Export Crop Promotion along with DEA has undertaken a two year program to educate the producer and peelers of the urgent need to meet SLSI standards. To arrest this drop in quality, the Government has taken steps to improve the quality at the grass root level. If we do not address the quality issues and the problem of the shortage of peelers, the Cinnamon Industry will suffer due to competition from Cassia which is less than 25% of the price of Cinnamon. Superior grades were not available making it difficult for the exporters to meet their commitments for these grades. The problem of obtaining peelers to process the Cinnamon Quills, continues. The industry is trying to ease the problem by training new people. Ceylon Cinnamon Lion Logo was issued to the first nine exporters who applied for it. Another important contribution made by the Government is to continue giving fertilizers at subsidized rates for the Industry. The Ministry is working closely with some Plantation Companies to plant Cinnamon. This is encouraging as SAPPTA has been trying for many years to get the plantation companies involved in growing spices. However the involvements of the Plantation companies are very limited and they are already experiencing peeling problems referred to earlier. High prices continued to prevail throughout the year. Very high prices being fetched by Cinnamon is a threat to the Industry as foreign buyers could be pushed into shifting to CASSIA which is selling at prices much lower than Cinnamon. Only way to retain the interest of the foreign buyers is to improve the hygienic and quality standards of our Cinnamon.

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THE PLANTATION SECTOR

With the support from SAPPTA, the Ministry of Minor Export Crop Promotion and The Department of Export Agriculture, competitive initiatives were taken by the Plantation Sector for implementing large scale spice cultivation on their lands. .

A land area of over 2000 acres has been fully diversified into Cinnamon, Cloves, Pepper, Cashew and other spices in the Plantation Sector during the last two years . The Plantations have had continuous dialog with the state and related authorities on issues relating to the sector together with the submission of suitable suggestions and productive proposals received by SAPPTA and Export Agriculture Ministry for the improvement of the sector.

Quality improvement and technological upgrading are being taken up by the plantation sector as an ongoing programe. Other areas focused upon by the plantation companies are value addition and export promotion in identified markets.

The aim of the Plantations is to increase the production of quality export spice crops by enhancing value addition of the crops.

The common goal shared by each member of the sector will be an ambitious and productive outlook for the future of the spice industry.

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BROKERS’ REPORT – THE AUCTION During the year, demand for Cardamoms remained steady whilst a slightly improved quality was available in the market. However the production remained poor due to the prevalent thripts attack, which was mainly evident in Kandy/Nuwaraeliya region. LG traded between Rs.3,000/- to Rs.3,700/-, whilst LLG 1 went between Rs.2,000 to Rs.2,500/- during this period. The lowest quality insect attacked pods also fetched up to Rs.1,400/- at the Colombo auctions. Cinnamon remained steady throughout the year with C grades trading between Rs.1,200/- to Rs.1,500/. Mixed quality parcels offered at the auctions traded around Rs.1,250/- to Rs.1,300/-. Black Pepper had a strong demand during this year. Lowest price recorded was Rs 750 whilst the highest recorded price was Rs.1,100/-. Cloves too enjoyed attractive prices this year. Sharp increase in demand was evident during 1st quarter 2014. No.1 Quality traded between Rs.1,500/- and Rs.1,600/-, whilst mixed parcels changed hands between Rs.1,400 to Rs.1,500/-. Coffee continued to trade between Rs.250/- and Rs.300/- and the demand was for local consumption. Being a home garden crop, the quality of SL coffee was not up to high standards which limited the possibility of exports to high end markets. Cocoa was in high demand though the production was poor. Growers continue to complain of Squirrel and monkey attacks which have discouraged many estate owners to expand Cocoa cultivation. Price for Good Quality (1 & 2 mixed) reached almost Rs.400 during the period, whilst mixed parcels traded between Rs.350/- to Rs.375/-. Quantities Offered at the Public Auctions During 2013/2014

Year Cardamoms Pepper Cinnamon Coffee Cloves Nutmeg Cocoa Total

2012/13 1,402.95 1,221.40 1,006.80 875.00 402.60 880.00 - 5,788.75

2013/14 1,749.55 4,307.05 2,460.15 1,232.85 1,352.10 302.40 2,431.00 13,835.10

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ANNUAL GENERAL MEETING The 29thAnnual General Meeting of the Association for the Year 2012/2013 was held on Friday, August 23, 2013 at “On Golden Pond” of the Taj Samudra Hotel, Colombo. Hon. Reginald Cooray, the Minister of Minor Export Crops Promotion was the Chief Guest at the event, whilst Dr. Koshy Mathai, Resident Representative for International Monetary Fund (IMF) in Sri Lanka & Maldives, was the Guest of Honour. The Annual Report and the Accounts for the year 2012/2013 were unanimously adopted by the membership.

ACTIVITIES OF THE ASSOCIATION

CESSES ON SPICE EXPORTS The Under stated Export CESSES continued to be levied:

Cinnamon Quilling, Feathering and Chips Rs. 6/- per Kg Cloves and Clove Stems Rs. 6/- per Kg Pepper Light Berries Rs. 10/- per Kg Pepper Heavy Rs. 3/- per Kg Nutmegs Rs. 10/- per Kg Mace Rs. 3/- per Kg

PEPPER FROM SRI LANKA TO INDIA UNDER THE ISFTA

No exports are taking place under ISFTA as the industry in Sri Lanka continues to hold the view that the introduction of the CAP in 2006 of 2,500 tonnes Pepper to be exported from Sri Lanka to India is against the spirit of the agreement and has to be revoked. Stated hereunder are the facts:

1. The Indo Sri Lanka Free Trade Agreement (ISFTA) was signed in March 2003. Several items were placed in the free list. Pepper was one such item thereby allowing free imports into India.

2. While the trade between the two countries continued smoothly India imposed a CAP of 2500 tonnes on imports from Sri Lanka into India effective April 01, 2006.

3. Sri Lankan Pepper exporters objected to the imposition of this CAP as they maintained that it was against the spirit of the Agreement.

4. Ever since the imposition of the CAP, for the last seven years, Sri Lankan Ministry of Trade to the Indian Government for the removal of the CAP.

5. The stand taken by the Pepper Industry in Sri Lanka has been consistent which can be seen from the fact that no exports of Pepper have taken place from Sri Lanka to India under ISFTA since the introduction of the CAP in April 2006.

6. As the CAP was imposed after the signing of the Agreement and as it was against the spirit of the Agreement, the Sri Lankan exporters urge the Government of India to remove the CAP allowing a normal flow of trade in Pepper to be restored between the two countries.

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However, exports of Pepper from Sri Lanka to India under their Advance License System and to their Export Oriented Units continued and India imported 7,272 tonnes of Pepper from Sri Lanka against a total exports from Sri Lanka of 21,330 tonnes in 2013.

COMPULSORY PRE-INSPECTION SCHEME FOR CINNAMON

Compulsory Pre-Inspection Scheme for Cinnamon Exports (CPIS) was introduced by the Sri Lanka Government in a bid to ensure that the required quality standards for cinnamon are maintained in the international markets. A Gazette notification was passed by the Parliament on July 05, 2013 in this respect and the Cinnamon Pre Inspection Scheme was scheduled to be implemented with effect from January 01, 2014. However, since the relevant authorities have not offered sufficient training at producer level and also based on the request of the key stakeholders of the industry the effective date of the regulations on Compulsory Pre-Inspection Scheme for Cinnamon which was published in Gazette (Extra Ordinary) No. 1813/15 was extended to 1st April 2014. However, later, the scheme has been withdrawn indefinitely.

41ST SESSION OF THE INTERNATIONAL PEPPER COMMUNITY (IPC)

The 41st Annual Session of IPC hosted by the Ministry of Plantation Industries and Commodities of Malaysia and organized jointly by the Malaysian Pepper Board and the IPC Jakartha took place in Malaysia on 11th to 13th November 2013. More than 250 officials and trade delegates from 23 countries (producing and consuming countries) participated.

EVENTS ORGANIZED BY SAPPTA

SAPPTA appraise RPC CEOs/Directors on market opportunities of spices and allied products industry SAPPTA convened a successful Meeting with the CEO‟s of the Plantation Companies on January 16, 2014. All Plantation CEO‟s who are members of SAPPTA were invited, in a bid to educate them on the status of the industry and to encourage them to diversify their produce, which in turn will have a bearing on the gross profit of the supply chain of their companies. Sixteen RPC CEO/Directors‟ participation was recorded. Mr. N. K. A. Rupasinghe, the Deputy Director of DEA, Dr. Nugawela, Chairman, Link Natural Products (Pvt) Ltd and Mr. F Mushin, Director Exports & Business, Link Natural Products (Pvt) Ltd., participated as guest speakers at this forum. Discussions were carried out on the subject of Spices as a future diversification crop for RPCs and the potential benefits, methods of value addition, financial benefits and the future markets. Also included in the discussion was types of new high value spices and the scales of economies and the assistance offered through the Government institutions and the present subsidy schemes in place for the spice industry. SAPPTA and Spice Council Are Strategic Partners for ‘Cinnamon to the World’ Information Hub As part of its continued efforts to promote the development of export oriented crops, NDB pioneered ‘Cinnamon to the World’, a giant national initiative that aims to empower the Cinnamon growers, exporters and Cinnamon related product manufacturers in the country; with a vision to stimulate Cinnamon export growth in Sri Lanka. The initiative was ceremoniously inaugurated at an event held on Monday, 27th January with the patronage of Hon. Ministers Basil Rajapaksa (Cabinet Minister of Economic Development) and Reginald Cooray (the Minister of Minor Export Crop Promotion) as chief guests. An online information hub for Ceylon Cinnamon ‘www.cinnamontotheworld.com’ was launched at the event by Hon Minister Rajapaksa; thus providing the world with easy access to a compilation of insightful information on ‘Ceylon Cinnamon’. SAPPTA, Spice Council, Export Development Board, and the Ceylon Chamber of Commerce, were strategic partners to the initiative.

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NDB teams up with SAPPTA to Spice up Sri Lankan Cinnamon Industry

NDB initiated a special program to empower the Cinnamon growers, exporters and Cinnamon related product manufacturers to create national consensus towards developing regional players in the Cinnamon industry, NDB teamed up with SAPPTA, The Ceylon Chamber of Commerce, and the Galle District Chamber of Commerce to conduct a workshop for small and medium sector growers and exporters in Galle. SAPPTA Members’ Get Together SAPPTA held its Annual Members‟ Get Together on December 20, 2013 at the “Sri Lankan Restaurant” of Grand Oriental Hotel. The fellowship was attended by all stakeholders of the Spices Industry which included exporters, producers, processors, dealers, brokers and other service providers associated with the spice industry.

CUSTOMS STATISTICS

Statistics are now available on the Customs web site, though with limited information.

WEB-SITE SAPPTA continues to quote weekly prices of spices on the web site which also offers an opportunity to the members to advertise their products.

SAPPTA PRICE LIST

With SAPPTA website, the weekly price list of SAPPTA indicating the prevailing market prices are being uploaded to the website. The price lists are being sent via electronic mail to the membership and relevant government authorities.

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NEW MEMBERS / RESIGNATIONS / CESSATION

New Members

Chrisslogix (Pvt) Ltd was enrolled as members of the Association with effect from May 2013. Kelani Valley Plantations PLC was enrolled as members of the Association with effect from July 2013 Trade Solutions Lanka (Pvt) Ltd was enrolled as members of the Association with effect from August

2013 Bughary Bio Spices and D T International were enrolled as members of the Association with effect

from January 2014 Resignations

Almar Trading Co. (Pvt) Ltd resigned from the Association with effect from June 2013. Cessations

The following ceased to be members under Rule No. 5.4 of the Constitution of SAPPTA during the year under review:

Basheer & Co

Ceylon and Foreign Trades

Damam K International (Pvt) Ltd

Eastern Produce Exports

Flemingo Products Lanka

Fruits and Nuts (Pvt) Ltd

Lanka Asiatic Corporation (Pvt) Ltd

Lankam Expo

Ramlin Spice House (Pvt) Ltd

Saleem Agency

Sri Lanka Spice Center

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THE CHAMBER BOARD OF ARBITRATORS AND SURVEYORS 2013

CHAMBER ARBITRATORS FOR THE YEAR 2013/2014

Mr. G.S. Chatoor Saboor Chatoor (Pvt) Ltd.

CHAMBER SURVEYORS/ASSESSORS FOR THE YEAR 2013

Pepper

Mr. P. D. Liyanage of SGS Lanka (Pvt.) Ltd.

Mr. K D P perera of Forbes & Walker Commodity Brokers (Pvt) Ltd

Mr. P. Ravinath of Intertek Testing Services Lanka (Pvt.) Ltd.

Cinnamon

Mr. J.M.J Melder of Control Union Inspections (Pvt) Ltd


Mr. P. Ravinath of Intertek Testing Services Lanka (Pvt.) Ltd.


Mr. S L Gurunada of SGS Lanka (Pvt.) Ltd.

Cardamoms


Cloves


Cocoa


Nutmeg & Cashew Kernels


Mr. S L Gurunada of SGS Lanka (Pvt.) Ltd.

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CONVENORS OF SUB-COMMITTEES

International Exhibitions, Study Tours, Conferences – Mr. F.Mushin

Local Seminars/ Workshops/ Exhibitions/ Miscellaneous – Mr. D. Perera

Finance and Planning - Mr. S. de Silva

Media, Publicity News Letter and Website - Mr. G.S Chatoor

Plantation Sector – Mr. C. Fernando

Legal, Constitutional, Disciplinary & Election – Mr. S. de Silva

Membership Development – Mr. S.A Cader

Exports Sector – Mr. V. Aberatne

Dealers Sector - Vacant.

Produces Sector – Mr. Geethal Peiris

CONVENORS OF SUB-COMMITTEES – PRODUCTS

Arecanut - Mr. Hassan Kassim

Pepper - Mr. G S Chatoor

Cardamoms – Mr. Damitha Perera

Cashew – Mr. V Abeyratne

Cinnamon – Mr. S de Silva

Essential oil – Mr. F Mushin

Cloves - Mr. G S Chatoor

Cocoa - Mr. S A Cader

Coffee - Mr. Damitha Perera

Nutmeg - Mr. S.M Rafeek

Mace - Mr. S.M Rafeek

Vanilla - Mr. S A Cader

Organic Products - Vacant

Garcinia - Mr. G S Chatoor

Turmeric and Ginger - Vacant

Technical – Dr. Wimal Wimaladasa

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REPRESENTATION ON OTHER BODIES

THE CEYLON CHAMBER OF COMMERCE Mr. Sarada de Silva and Mr. G.S Chatoor were nominated to serve on the Committee of the Ceylon Chamber of Commerce for the year 2013-2014, as the SAPPTA representative and Alternate, respectively.

THE EXPORTER'S ASSOCIATION OF SRI LANKA Mr. V. Abeyrathne and Mr. G.S Chatoor were nominated to serve on the Committee of the Exporters‟ Association of Sri Lanka [EASL] for the year 2013-2014, as the SAPPTA representative and Alternate, respectively. THE DEPARTMENT OF COMMERCE OF SRI LANKA

Mr. G.S Chatoor represented the Association at the Department of Commerce of Sri Lanka

SRI LANKA EXPORT DEVELOPMENT BOARD Mr. Viren Ruberu represented the Association at Sri Lanka Export Development Board

MEMBERSHIP

The number of members as at March 31, 2014 was 89 of which 15 members are Life Members of the Association.

AUDITORS M/s HLB Edirisinghe & Co. were appointed as Auditors of the Association for the financial year April 01, 2013 to March 31, 2014 at the Annual General Meeting held on August 23, 2013.

A copy of the Audited statement of Accounts is appended to this report.

SECRETARIAT The Ceylon Chamber of Commerce continued to provide Secretarial services to the Association.

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CHAIRMEN OF SAPPTA

YEAR CHAIRMAN

1984/1985 Mr. G. S. Chatoor 1985/1986 Mr. C L Wickramanayake 1986/1987 Mr. C L Wickramanayake 1987/1988 Mr. C L Wickramanayake 1988/1989 Mr. O. Kassim 1989/1990 Mr. O. Kassim 1990/1991 Mr. G. S. Chatoor 1991/1992 Mr. T. Akbarally 1992/1993 Mr. T. Akbarally 1993/1994 Mr. A. Chatoor 1994/1995 Mr. A. Chatoor 1995/1996 Mr. M. C. M. Zarook 1996/1997 Mr. M. C. M. Zarook 1997/1998 Mr. M. C. M. Zarook 1998/1999 Mr. C. Dassenaike 1999/2000 Mr. C. Dassenaike 2000/2001 Mr. S. de Silva 2001/2002 Mr. S. de Silva 2002/2003 Dr. D. Nugawela(Until March 20,2003)

Mr. G.S. Chatoor(From March 20, 2003) 2003/2004 Mr. G. S. Chatoor 2004/2005 Mr. S. A. Cader 2005/2006 Mr. S. A. Cader 2006/2007 Mr. L. Wickremesooriya 2007/2008 Mr. K. Ramachandran 2008/2009 Mr. K. Ramachandran 2009/2010 Mr. C. Fernando 2010/2011 Mr. C. Fernando 2011/2012 Mr. Viren Ruberu 2012/2013 Mr. Viren Ruberu

BY ORDER OF THE COMMITTEE Sgd. FOR SECRETARY

Documents

The Association - SAPPTAsappta.org/wp-content/uploads/2013/08/SAPPTA-Annual...3 The Spices & Allied Products Producers’ and Traders’ Association Annual Report – 2013/2014 LIST