The genus Cinnamomum

298 M.S. Madan and S. Kannan
Singapore account for more than 90% of the total exports. Singapore alone accounts for
more than 50% of the re-exports in the world market. Produce from Indonesia and
Vietnam is routed through this important entry port for spices. The US, the largest
importer in the world, re-exports a sizeable quantity of both cinnamon and cassia. Of the
total, imports, the US re-exported around 674 t of cinnamon and cassia, mainly to Mexico,
Germany and Canada, accounting for more than 70% of total exports (Table 12.14).
India exports and re-exports a greater amount of cassia type cinnamon than true type
cinnamon. Item-wise and year-wise total exports of both cinnamon and cassia from India
are given in Table 12.15, however, there is no definite pattern in export of either
commodities. The export of cassia and cassia products has remained greater than that of
cinnamon, and there has been a steady decline in export of cinnamon products during
the period 1995–2000. India’s export is more than that of its production, indicating that
the country re-exports a sizeable quantity of imported cinnamon and cassia.
Vietnam’s export earnings from spices indicated an annual average growth rate of
13.1% during 1994–2000, which declined by 3.6% in 2000 mainly due to a negative
growth rate (9.2%) registered by cinnamon export. Earnings from cinnamon export,
which accounted for 59% of the total spice exports from Vietnam, declined mainly due
to low international prices.
Competitiveness
The opening up of the Vietnamese economy has introduced competition into this commodity
market. Saigon cassia, a much sought after variety prior to the Vietnam war, is
now available on the market. During 1995, among the individual products exported from
Vietnam to the European Union, the highest market shares were for cinnamon (6.8%) and
essential oils (6.4%), mainly from cinnamon. However, the unit price received by
Vietnamese cinnamon is less than the market average. An exceptionally higher price
deviation was recorded in cinnamon (price ratio 0.61). Cinnamon and its essential oil
have similar price pattern, and are influenced by the same market trends (Anon, 2001).
In order to understand the position and competitiveness of individual exporters in
the world trade of cinnamon, market shares and unit value ratios were calculated and
presented in Table 12.16. In the absence of time series data on prices, the unit price was
worked out from the value of export and quantity exported. While calculating the unit
price, individual items of export were not taken into account. So, there is bound to be
a slight variation depending upon the share of value added products in the export
basket of individual countries. However, the estimated unit value ratios help in comparing
the prices of each exporting country with one another and with the average of
total imports. The ratio is computed by dividing the country’s unit value by the unit
value of total imports. The data shows that:
• Sri Lanka’s share of total exports has declined substantially since 1970, despite the
higher unit value ratios when compared to other exporting countries. The decline
is only in terms of a percentage share, not in terms of actual quantity.
• Two major suppliers of cassia cinnamon taken together dominate the market. Both
Indonesia and China have improved their share in the import market by many-fold
since 1970, not at the cost of other exporting countries, but by the steady growth in
their export to meet the world demand. China with its faster growth rate has
overtaken Indonesia in export performance. In future one country’s success depends
on the failure of the other in light of the emergence of new competitors like Vietnam.