- Stresses need for innovation and processing to capture higher-value markets
Amidst the export earnings from bulk spice exports increasing in July 2024, the government is encouraging value added spice exports, The Daily Morning Business learns.
Speaking to The Daily Morning Business, Export Development Board (EDB) Export Agriculture Director Janak Sanjeewa Badugama said: “90% of agricultural products are exported as raw materials. This is different from the coconut industry, where it captures some significant percentage for valuable products since their innovations and organisations have developed new products and tendencies as such. On the other hand, due to the regulatory impact, the coconut nuts can’t be exported to any other country.”
He pointed out that yet, there is no such regulation for spices. Therefore the exporters export in bulk form.
Moreover, when it comes to spices, there are organisations in India; they do have a processing plant, and they collect the raw materials from various countries, not only Sri Lanka but other countries as well. Then send it to the world market. Sometimes it may be semi processed items they export from India to some other destination. This is the mechanism they practice, he added.
Even though the EDB and the government discuss value-added items to break bulk raw material exports, it is not an easy task because when it comes to value additions, as exporters, they think whether spending much time and investments on value-added products is worthwhile because at the moment there’s a profitable source so that they can earn money.
Yet, the country definitely has to think about bigger revenues; therefore, they need to capture huge markets through encouraging people to export value-added products, stated Badugama.
“We must figure out how to obtain the raw materials if we are to investigate the sizable global market. For instance, Sri Lanka can import raw materials from India, reprocess and re-export,” he explained.
However, According to EDB, the government and private sector need to establish certain mechanisms and processes on how to control and monitor these things, which is significant.
“We should not discourage local growers, but simultaneously, they should match with the import quality, which is currently hard for them due to a lack of technology and effective processing methods since they are used to the home gardening conceptions,” he added.