By Chamindry Saparamadu and Erandi Ranasinghe
Sri Lanka is renowned for Ceylon Cinnamon for centuries and supplies 80–90% of the world’s true cinnamon today. Ceylon Cinnamon, scientifically known as Cinnamomum zeylanicum, is distinct from the cassia varieties that dominate much of the global cinnamon market. Its unique characteristics, traditional processing methods, and reputation for quality give it a strong competitive advantage. Ceylon Cinnamon was recognized as a Protected Geographical Indication (PGI) in the European Union in 2022, creating an important platform to protect and differentiate the product internationally.
Cinnamon industry’s significance extends beyond export revenue. The sector supports thousands of smallholder farmers, processors, peelers, traders and other rural livelihoods, making it an important contributor to rural economy and livelihoods in Sri Lanka.
Cinnamon industry can be expanded significantly with the right solutions to address a number of interlinked barriers that constrain its growth.
At present, only about 10% of Sri Lanka’s cinnamon exports are value-added products. Instead of raw cinnamon and basic products, Sri Lanka has the potential to expand into value-added products such as cinnamon powder, essential oils, extracts, beverages, food products, cosmetics and wellness products. Moving up the value chain will increase the value retained within Sri Lanka while creating new opportunities for rural enterprises and entrepreneurs.
There are significant opportunities to position Ceylon Cinnamon as a premium and sustainably produced one in international markets. Growing consumer demand for natural, organic, clean-label and plant-based products is creating opportunities beyond traditional culinary uses, particularly in the nutraceutical, pharmaceutical, wellness, cosmetic and functional food sectors.
Sustainability is increasingly becoming a market requirement, with buyers paying greater attention to environmental performance, responsible sourcing, social impacts and supply-chain transparency.
Although cinnamon is not directly covered by the EU Carbon Border Adjustment Mechanism (CBAM), expectations around carbon footprints, resource efficiency and environmental performance are increasing. Addressing sustainability considerations and meeting international quality and food-safety standards will help the industry adapt to evolving international market expectations and enable Sri Lankan producers to access higher-value markets rather than competing primarily on price.
Certification, traceability and supply-chain transparency can further strengthen this positioning. Standards and certifications such as Organic, Fairtrade and internationally recognized sustainability, quality and food-safety certifications can help build buyer confidence and open opportunities in premium markets.
Sri Lanka also faces strong price competition from cassia-producing countries such as Indonesia, China and Vietnam. At the same time, adulteration and mislabeling of Ceylon Cinnamon with cassia in some markets can undermine consumer trust and weaken Sri Lanka’s premium position. The EU PGI recognition can be leveraged more effectively to strengthen the identity of Ceylon Cinnamon and distinguish it from cassia and other cinnamon varieties.
At the ground level, limited access to modern processing, finance, technology, quality testing and market information prevents many smallholders and rural enterprises from moving into higher-value markets. Their participation can be strengthened through enhanced access to finance, technology, market information and digital market linkages. Stronger farmer organizations and direct connections with buyers could reduce dependence on intermediaries and enable producers to capture a greater share of the value generated along the supply chain.
Improving post-harvest handling, processing and quality management can further support consistent supply and quality. Digital inclusion and traceability offer important pathways: digital farmer records, QR-based product information and traceability systems can connect smallholders more effectively with processors, exporters and international buyers while improving transparency and market access.
Another pressing problem is the shortage of skilled cinnamon peelers which is driving up labor costs, while rising input and production costs continue to squeeze smallholder farmers who are already struggling with low cinnamon yields and income, due to climatic conditions, diseases and pests, among others. These are compounded by the waning interest among the younger generation in cinnamon cultivation and processing, posing longer term challenges to the sustainability of the sector.
Investment in farmer skills, climate-smart cultivation and improved processing can increase productivity and address the shortage of skilled peelers. Creating opportunities for skills development, modernized processing and sustainable livelihoods can encourage younger generations to see the sector as a viable long-term career.
It is time for Sri Lanka’s cinnamon industry to move from a commodity-focused industry to a value-driven, sustainable and digitally connected sector. This requires investment in farmer skills, climate-smart cultivation, quality management, digital systems and modern processing, sustainability credentials, alongside greater market integration through heightened efforts to promote Ceylon Cinnamon brand globally.
Ceylon Cinnamon already has a unique origin, heritage and global reputation. While we must endeavor to retain this legacy, we must also seize the opportunity to transform the sector with greater value for the farmers and stronger international market positioning for a more sustainable future for the industry.