Seeking the high profits promised by the cinnamon market, Portuguese traders arrived on the island of Ceylon in the Indian Ocean toward the end of the 15th century. Before Europeans arrived on the island, the state had organized the cultivation of cinnamon. People belonging to the ethnic group called the Salagama would peel the bark off young shoots of the cinnamon plant in the rainy season, when the wet bark was more pliable. During the peeling process, they curled the bark into the ‘stick’ shape still associated with the spice today. The Salagama then gave the finished product to the king as a form of tribute. When the Portuguese arrived, they needed to increase production significantly, and so enslaved many other members of the Ceylonese native population, forcing them to work in cinnamon harvesting. In 1518, the Portuguese built a fort on Ceylon, which enabled them to protect the island, so helping them to develop a monopoly in the cinnamon trade and generate very high profits. In the late 16th century, for example, they enjoyed a tenfold profit when shipping cinnamon over a journey of eight days from Ceylon to India.

When the Dutch arrived off the coast of southern Asia at the very beginning of the 17th century, they set their sights on displacing the Portuguese as kings of cinnamon. The Dutch allied themselves with Kandy, an inland kingdom on Ceylon. In return for payments of elephants and cinnamon, they protected the native king from the Portuguese. By 1649, the Dutch broke the 150-year Portuguese monopoly when they overran and occupied their factories. By 1658, they had permanently expelled the Portuguese from the island, thereby gaining control of the lucrative cinnamon trade.

In order to protect their hold on the market, the Dutch, like the Portuguese before them, treated the native inhabitants harshly. Because of the need to boost production and satisfy Europe’s ever-increasing appetite for cinnamon, the Dutch began to alter the harvesting practices of the Ceylonese. Over time, the supply of cinnamon trees on the island became nearly exhausted, due to systematic stripping of the bark. Eventually, the Dutch began cultivating their own cinnamon trees to supplement the diminishing number of wild trees available for use.

Then, in 1796, the English arrived on Ceylon, thereby displacing the Dutch from their control of the cinnamon monopoly. By the middle of the 19th century, production of cinnamon reached 1,000 tons a year, after a lower grade quality of the spice became acceptable to European tastes. By that time, cinnamon was being grown in other parts of the Indian Ocean region and in the West Indies, Brazil, and Guyana. Not only was a monopoly of cinnamon becoming impossible, but the spice trade overall was diminishing in economic potential, and was eventually superseded by the rise of trade in coffee, tea, chocolate, and sugar.