Sri Lanka’s listed plantations companies are getting into spice cultivation, drawn by the opportunities offered by their vast land holdings and the reputation for the island’s crops, officials said.

As many as 12 of the 18 plantation companies listed on the Colombo bourse have diversified and gone into the production of spices, said Chris Fernando, vice chairman of the Spices & Allied Products Producers’ & Traders’ Association (SAPPTA).

The companies, which grow mainly tea, rubber and coconut, have diversified into cultivation of cinnamon, pepper, cashew and cardamoms.

The association, which represents the spice trade’s different players - from producers and processors to traders and exports - has long tried to lobby for plantations companies to do more spice cultivation.

Officials said the firms could make use of their land holdings to grow spice crops not only for the local market, which faces shortages in certain spices such as cocoa and cashew, but for export as well.

For instance, Sri Lankan confectionary manufacturers continue to import cocoa beans and cocoa butter to meet their requirements.

"This is the ideal time for plantations companies to go into cocoa production and for the small holders to improve their production and productivity," a SAPPTA official said.

In export markets Sri Lankan spices are also known for their distinct characteristics brought about by a combination of the island’s location, the effect of two monsoons, and soil conditions and elevations at which crops are grown.

"For instance, our pepper has more pepperine content than those of other origins - the pungency is more," said M C M Zarook, a former chairman of the association.

Fernando said that so far about 1,965 hectares under the listed plantation companies spread over Balangoda, Malwatte Valley, Chilaw, and Kurunegala in the central and north-central regions are presently under spice cultivation.

Fernando said his own plantations company, Malwatte Valley Plantations, has now started pepper cultivation.

It has 175 hectares of pepper in Hali-Ella, in the central hills, and another 500 hectares of cashew in north-western Puttalam.

"SAPPTA was able to get 12 plantations companies to diversify into spices," Fernando said. "Now they’ve realised they can generate extra income through spices."

The companies were also looking in to the possibility of growing cinnamon, the island’s best known spice, in upcountry estates.

Sri Lanka accounts for 90 percent of the world’s production of true cinnamon.

But the plantations companies also face problems in diversifying, as they often make losses when prices of their main products, tea and rubber, fall, as their costs are high.

The long gestation period for spice crops, fluctuations in prices and lack of funding are the main obstacles, according to SAPPTA.

The companies also have to face theft of produce from their vast estates and uncertainty over land leased from government.

Irregular rainfall and drought also affects harvests along with pest attacks.

"Crops are also dependant on weather," said Fernando. "In the past three years we’ve had very irregular rainfall which affects crops. Also there are a lot of pest attacks which is very expensive to control." (LBO)