Feasibility Report

On
Cinnamon Export

Trade in Cinnamon

Global Scenario
Global trade in cinnamon ranges between 8500-12000 tonnes annually. Srilanka
contributes nearly 80% to 90% of the total cinnamon production followed by
Seychelles, Madagascar and India. USA, Japan and EU are the major import
markets of the spice.

Indian Scenario

The Indian production of cinnamon is in negative territory, as over the years the
production has gone down even though the land area under cultivation for
cinnamon has gone up.

Exhibit 1
SPICE/STATE WISE AREA & (Area in Hec, Production in
PRODUCTION Tonnes)
States 2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07

Pro Are Pro Pro Pro Prod

Area dn. a dn. Area dn. Area dn. Area n.
Kerala 293 NA 311 NA 328 NA 326 NA 327 NA
Andaman
& Nicobar 57 8 80 11 103 14 153 18 153 18
Karnatak
a 48 69 29 19 21 6 21 6 50 9
TOTAL 398 77 420 30 452 20 500 24 530 27
 Imports

As India is deficient in production of cinnamon (refer Exhibit 1) India has to

import cinnamon to satisfy the domestic demand. Cinnamon Imports have
registered a growth of 60.83% over the last trade year.

2008- 2009-
S.No. HSCode Commodity %Share %Share %Growth
2009 2010

1. 0906 CINNAMON & CINNAMON TREE 6,127. 0.0045 9,854. 0.0072 60.83
FLOWERS 61 81

Exhibit 2

Exports

Cinnamon exports from India has shown a negative growth over the years as
Srilanka has emerged as a dominant player in the international market controlling
80-90% of international cinnamon trade due to their economies of scale.

S.No. HSCode Commodity 2008-2009 %Share 2009-2010 %Share %Growth

1. 0906 CINNAMON & CINNAMON 1,031.11 0.0012 667.69 0.0008 -35.25

TREE FLOWERS

Exhibit 3
 International Prices

INTERNATIONAL PRICES (SPOT PRICES) OF MAJOR SPICES FOR THE WEEK

ENDING 22.10.2010
ORIGIN/GRADE MARKET PRICE FOR THE WEEK LAST LAST LAST
WEEK MONTH YEAR
PRICE SAME SAME
WEEK WEEK
22/10/2010 15/10/201 24/09/201 23/10/200
0 0 9
(US$/KG) (US$/KG) (US$/KG) (US$/KG)
CINNAMON CEYLON H2 NEWYORK 8.83 8.83 8.82
CINNAMON

The international spot price of cinnamon stands at $8.83/kg which is

Rs.391.257/kg and if we add other charges such as duties, transportation, storage,
package and exporting costs we will be rendered uncompetitive in the market.

Hence, I recommend that we should not go ahead with the prospect of exporting
cinnamon.

References:
www.commerce.nic.in

www.fao.org