Sri Lanka spice traders thwart protectionist move

Sept 29, 2009 (LBO) – Sri Lankan spice traders say they have thwarted an attempt by few processors to push the government to impose an export tax that would have benefited their own industries but hurt growers, mostly small farmers. Pepper light berries are used to make high value products from the extracted oil while nutmeg and its flower, mace, are known for their powerful fragrance and used in the perfume industry.

Karthik Ramachandran, former head of SAPPTA, raised the issue at the association’s recent annual meeting.

“A few exporters with a vested interest in the spice extraction industry tried to get the government to introduce an export cess on pepper light berries and nutmegs which would have benefited their extraction industry,” he said.

“The extraction industry would then have got easy access to the pepper light berry segment.”

Sri Lanka has seen a rise in protectionism of late, with powerful business interests with political connections restricting the economic freedom of others, in the name of ‘economic nationalism.’ Spices and Allied Products Traders Association (SAPPTA) officials said there was a move to impose an export cess on pepper light berries and talk of a similar cess on nutmeg exports.