Beyond Export Volume: Value Capture, Trading Hubs, and Equitable Upgrading in the Global Cinnamon Value Chain A Review

Abstract

Cinnamon illustrates a persistent paradox in global agricultural trade: the countries that cultivate and supply a commodity do not necessarily capture the largest share of the economic value generated from it. Indonesia, particularly the Kerinci highlands of Jambi and neighboring areas of Sumatra, is a major source of Cinnamomum burmannii, yet cinnamon is also exported by non-producing economies such as Singapore. This qualitative integrative literature review examines how value is created, distributed, and captured across the global cinnamon chain and investigates whether producing countries and smallholder farmers receive an equitable share. The analysis integrates recent literature on cinnamon trade, global value chains, smallholder inclusion, geographical indications, sustainability standards, intermediation, processing, traceability, and market power, complemented by official trade statistics. The review finds that production leadership and export competitiveness do not automatically create value-capture leadership. Significant value is generated after the farm gate through aggregation, quality assurance, processing, logistics, finance, certification, formulation, branding, market intelligence, and distribution. Intermediaries and trading hubs therefore perform economically meaningful functions, although information asymmetries, concentrated market power, financing constraints, and weak producer organization may create unequal distributional outcomes. The article proposes an Equitable Cinnamon Value-Chain Upgrading Framework integrating productive capabilities, functional upgrading, producer organization, origin differentiation, traceability, finance, fair contracting, and market development. For Indonesia, the strategic objective should shift from maximizing cinnamon export volume toward maximizing sustainable domestic value added and the proportion of that value ultimately retained by producing communities.