NCE points out exporters’ predicament due to order cancellations amid COVID-19

The member exporters of the National Chamber of Exporters of Sri Lanka (NCE) have made representations regarding their predicament due to the sudden cancellation of export orders by certain buyers.

Some of these exporters have already prepared the consignments of goods for export, based on the confirmed orders of the buyers.

Prior to the COVID-19 crisis, the Sri Lankan exporters had incurred heavy expenses to conform with the high standards, traceability and other requirements related to quality, etc. imposed by the buyers in European countries.

During the initial stages, when the Sri Lankan exporters entered into contract with the buyers, they had to adhere to conditions, which were specific to certain countries and buyers. Further, some of these certifications that were required by the buyers had to be obtained from internationally-accredited certifying bodies, where heavy costs were incurred. In this regards, specially the SMES, have had to borrow funds to satisfy their buyers’ requirements.

In this background, it appears some buyers have used the COVID19 crisis in their countries either to cancel orders or to demand 50 percent discounts, violating trade ethics. This is in spite of the fact that counties like the UK have provided packages of assistance to their exporters.

In this light, if they fail to honour their obligations related to confirmed orders, they should at least assist or compensate our suppler exporters using funds in their packages of assistance. If not, the Sri Lankan exporters, who have to forego revenue, will be forced to shed workers, due to their inability to employ them and pay their wages. Further, the businesses in the SME category may have no alternative but to shut down operations.

On the other hand, the Sri Lankan importers of raw materials and other inputs should also honour their obligations under contracts with suppliers in foreign countries in keeping with business ethics.

In other words, both importers in other countries, as well as those in Sri Lanka, should not use the COVID-19 crisis as an excuse to indulge in unscrupulous measures, violating business norms.

In view of the above, it is the duty of the government and relevant state authorities to intervene in this matter by briefing the ambassadors and commercial representatives of the relevant countries, regarding the gravity of the problem. This will enable them to address the issue with the authorities in their countries, to ensure fair trade.