• ‘Govt’s decision encourages local cultivators & SMEs’-COSMI’s Rajabdeen

• “More than half of Sri Lanka agricultural exports are spices & allied products

• 2018 spice exports at US $ 361 Mn

Sri Lanka’s Confederation of Micro, Small and Medium Industries (COSMI) hailed the government’s December 5 decision to block the re-export of minor export crops. COSMI President Nawaz Rajabdeen said on 12 December that this move encourages Sri Lanka’s export crop growers and Small and Medium Industrialists. More than 50% of Sri Lanka’s agricultural exports are spices and allied products. “The government’s decision to stop importing of pepper, dried Areca nut, Tamarind, Cinnamon, Nutmeg, Mace, Cardamom, Cloves and Ginger by a gazette is praiseworthy. The government seeks to encourage local cultivators of minor export crops and small and medium scale industrialists. We also praise the subsequent gazette notification also in which import of spices for re-export was banned. The entire sector suffered during the last ten years as a few favored parties were given the opportunity to import spices and re-export them without any value addition. It badly affected our local cultivators and MSMEs” said Rajabdeen and added: “Although the relevant Department issued a condition for value addition, no such value addition was seen to be made”.

On the directive of Prime Minister Mahinda Rajapaksa, the government banned the importation of spices and minor crops on December 5 to protect and encourage the minor export crop growers and Small and Medium Industrialists.

Threatening locally produced exports, Sri Lanka’s re-exports of all types have quietly increased over the last decade. In 2007, only 1.46% of Sri Lanka’s total exports were identified as ‘re-exports’ but a decade later in 2017 such re-exports doubled to 2.88% of total exports. The value of all re-exports (including spices) jumped by a massive 400% in 2017 compared to 2007. Damaging the local spice exports further, due to lower cinnamon and cloves exports a decline in Lankan spice export revenues too was seen in 2018. More than 50% of Sri Lanka’s agricultural exports are spices and allied products. Year on year export of spices and allied products declined in 2018 by 11.53% to US $ 361.1 Mn from 2017’s $408.17 Mn. In 2018, the major market for Sri Lanka’s spice exports was Mexico followed by India and US.

The Confederation of Micro, Small and Medium Industries (COSMI) was formed this year, and it aims to revive and foster the MSMEs in Sri Lanka.

Photo - COSMI Founder President Nawaz Rajabdeen