By: Staff Writer
September 22, Colombo (LNW): Sri Lanka’s ambition to turn its globally recognised spice industry into a US$1 billion export earner is confronting a series of structural weaknesses that could prevent the sector from moving beyond its traditional commodity-based model.
Spices and Allied Products Producers’ and Traders’ Association (SAPPTA) Chairman Ryan Rambukwella has called for a fundamental transformation of the industry, warning that simply increasing production and exports will not be sufficient to achieve the target.
Addressing SAPPTA’s 42nd Annual General Meeting, Rambukwella said the industry needed a common national objective, bringing plantations, traders, processors and exporters together rather than allowing each segment to operate independently.
The central challenge, according to the industry, is the limited value extracted from every kilogram of spice produced or processed in Sri Lanka.
Competing businesses for the same restricted pool of raw materials merely divides an existing market, Rambukwella argued. The opportunity must instead be expanded through value addition, branding, technology and stronger integration across the supply chain.
The industry is also facing persistent compliance problems. Contamination involving chlorate, perchlorate, nicotine and lead continues to create difficulties for exporters, while businesses can sometimes struggle to establish where contamination originated.
This exposes a deeper weakness in the sector’s traceability systems.
Instead of responding only after consignments are rejected, downgraded or subjected to additional scrutiny, the industry wants a preventive system involving testing and certification agencies, exporters, the Department of Export Agriculture, UNIDO and other technical specialists.
Improved traceability could allow Sri Lanka to obtain greater export value without necessarily increasing the physical volume of production.
Another sensitive issue is access to raw materials. SAPPTA wants the Government to consider a controlled mechanism permitting imports of raw materials specifically for processing and subsequent re-export.
The proposal carries obvious implications for domestic producers. Uncontrolled imports could potentially affect local prices and farmers, but Rambukwella argues that a carefully monitored system could allow Sri Lankan processors to compete with international producers that can source inputs globally.
Such a mechanism would require strict traceability and safeguards to ensure imported material does not enter the domestic market improperly.
Finance represents another major obstacle. High working-capital requirements force businesses to move inventory rapidly instead of holding, processing and upgrading products for higher returns.
The industry therefore wants financing structures better suited to agricultural trading and processing.
The proposed transformation also extends beyond processing. Ingredients, extracts and finished consumer products offer opportunities to capture significantly greater margins than bulk commodity exports.
Most importantly, Rambukwella stressed the need for internationally recognised Sri Lankan brands. Unlike commodities, brands generate intellectual property, reputation and long-term intangible value.
The industry is simultaneously confronting labour shortages and technological competition from other producing countries. Mechanisation and automation are increasingly required across cultivation, harvesting, drying, sorting, processing and traceability.
The billion-dollar ambition, therefore, is not merely an export target. It is a test of whether Sri Lanka can restructure an entire agricultural value chain before international competitors capture the higher-value segments of the global spice business.