Market Entry Requirements for Herbal Medicinal Products and Herbal Products Industry in Sri Lanka - A Case Study

Abstract

The herbal product sector has been identified as a key area of promoting exports in Sri Lanka. Developed countries have changed dietary habits into herbal products resulting from increase health awareness. The demand for herbal products exceeds the supply in the major herbal product markets supply in the major herbal product markets such as Europe, Japan, and USA. Thus, developing countries have comparative advantage to export herbal produce for the international market. Both synthetic and natural ayurvedic/herbal medicinal products used in pharmaceutical industry in Sri Lanka are categorized under the same coding system called Harmonized Commodity Description and Coding System. Thus, market information related to volume exported, price and quantity consumed are not available on trade of herbal produce even in the customs. Information on major herbal products and consumption in European Union, USA, Japan are collected. Tourist hotels are the best marketing places contributing (31 %) followed by pharmacies (25 %) and supermarkets (25 %). The best five companies, which tend to export value added products in resent years have shown an increase in Herbal Value Percentage compared to Herbal Quantity Percentage by 15.1 %, 79.35 %, 52.83 %, and 0.003 %. Lower product quality, high cost of production, short supply, insufficient raw materials and their seasonal harvest, lack of market information and lack of research and development, Lack of government incentive schemes, recognition as an industry and training and awareness programmes are recognized as constraints. It is suggested to develop a national plan to promote the industry, cultivation of medicinal plants, allocation of funds to educate suppliers, for extension services and for research and development to upgrade the industry. This study indicated that herbal products and herbal medicinal products consumption in Europe has been increased in this decade. Import promotion programmes in Europe will be created higher demand for Sri Lankan produce.