Financial Times

Barring natural and man-made disasters, Sri Lanka will host the 34th Session of the International Pepper Community (IPC) in Kandy next month which would enhance marketing links by bringing local producers and processors together with an international audience that will hopefully have a lasting effect on the sector here concerning the “King of Spice”.

Full member countries are Brazil, India, Indonesia, Malaysia, Sri Lanka and Vietnam, where Papua New Guinea and China are associate members, with the latter having made a formal request to join fully, something to be considered at the conference. “This is very exciting for the community as with China on board we can say that member countries produce 95 percent of the world’s [pepper] supply,” said Anandan Adnan Abdullah, Executive Director, International Pepper Community.

At the conference, from September 4-7 at the Earl’s Regency Hotel, three main meetings will be held: exporters will discuss the economic situation of production, exports, prices, prospects, problems and other related matters; the Pepper Tech will be a technical forum to look at and identify the problems facing the industry pertaining production, processing, marketing and product development with the aim of finding solutions; and the Pepper Exim meet where supply and demand issues of each producing and consuming country will be aired, looking at quality improvement and control, and the possible use of technology to improve quality.

“And to end it all the final day will be a field trip to help promote the local product, as well as the country,” Abdullah said.

As for the worsening troubles in the north and east, he said that was a major reason as to why he was in the country – the Malaysian is based in Jakarta, Indonesia, where the IPC headquarters is.

“Once the logistics are in place there should be no problems as the guests will be transferred straight from the airport to Kandy. Already we have 15 Indian representatives, nine from China and three from Brazil, which considering the latter have missed the last two sessions can only mean they are not worried. I shall be reiterating the ‘OK factor’ on the IPC website when I get back to Jakarta."

Tissa Warnasuriya, Secretary to the Ministry of Agriculture Development, said that the session will be beneficial for everyone due to the opportunities to promote and talk to each other, as well as talk about “how good Sri Lankan pepper is”.

“It will also show the country’s ability to host MICE tourism, where this meeting covers three of the four categories. It will also be good for the government and the private sector to meet their opposite numbers in other member countries and beyond,” he said.

(MICE stands for meeting, incentive, conference and event, where the missing segment here is incentive as that is defined as offering a reward for a previous performance which is not the case here.)

“The IPC will be able to tell us what our strengths and weaknesses are; where we can look at value-added products to boost revenue,” Warnasuriya said.

He added that the country was meant to host the event last year but was deferred due to the tsunami.

Presently the country produces 14,000 tonnes, of which 8,000 is exported, grown on 30,000 hectares.

As Sri Lanka is known to grow the most pungent pepper that fetches high prices, a six-year plan was put into operation in 2005 in a bid to boost production and foreign exchange. P. J. Wickramasinghe, Director, Department of Export Agriculture, said that from a total harvest of 105 tonnes in 1972 worth Rs 90,000, last year’s harvest was worth Rs 1.23 billion on an 8,829 tonne harvest.

“After a tough couple of years due to low prices, over the last few weeks the price per kilogram has risen from Rs 120 to Rs 190.

As for the plan to 2010, an extra 9,200 hectares of land will be put aside for pepper growth, where yield per hectare is expected to rise from a present 446 kilograms to 1,000 and income will rise from Rs 464 million to Rs 1.5 billion, “but hopefully more due to world prices rising”, the director said.

He added that there were also plans to move into the white pepper market as there is great demand in the West and Japan. “Due to the high quality of pepper grown in the country, it should command a premium price,” Wickramasinghe said.

Abdullah added that the move to white pepper was positive as it was seen as a superior quality pepper. “There is also the product standard side as when you peel off the outside skin you get rid of any residue left over from pesticides and herbicides.”

Dr M. Illangasinghe, Senior Deputy Director, Department of Export Agriculture, said that as most of the local producers worked land of 10 perches or less, there was a problem with quality in general due to indifferent growing and picking methods, “something that has to be looked into”.

“What we are looking to do is get collective farming going, where there no longer are hundreds of small farmers working individually, but getting them to work together, where we will help by offering, be it free or on hire-purchase, the right equipment to boost harvests. We need to improve all aspects of the industry, from beginning to the end so every kilogram can be sold for premium prices; something that’s not happening today,” he said.

“One of the main benefits of hosting the event is that everyone in the industry can participate, whereas when it takes place elsewhere very few in the local players in the pepper industry attend. In Kandy, everyone can talk to each other. Foreign importers will also see first hand how things are done here. To move on, specially with globalisation, we all have to all work together,” said Sarada De Silva, Chairman, The Spice Council.

And as Abdullah said, “Pepper is an inelastic product. When the price is cheap, people don’t go out and buy more; similarly, when the price is high people still buy it. It is a product that is always in need.”