Exporters plumb new depths in virus crisis

It would be years before Sri Lanka’s garment and textile industry, the biggest export industry, recovers from the adverse impact of the global coronavirus pandemic.

Sri Lanka Apparel Export Association (SLAEA) said that the real effects will be felt in mid year when the factories go dry for want of orders.

Association president Rehan Lakhany said that about 60% of factories are producing masks and personal protective equipment (PPE) which are in demand globally. But, in the next three months when the virus wanes, the demand will drop, he said. “June and July this year will be the biggest drop in the market,’’ he said. Only around 50% of factories are into mask and PPE production and are working with 70% to 80% employee capacity under strict health guidelines.

Some factories have got massive orders from the United States and countries of the European Union, Singapore and the United Kingdom.

“All garment manufacturing countries are making masks and PPE and soon the demand will flatten,’’ Mr. Lakhany predicted.

He said the government was quick to allow imports of raw materials. Last week, a gazette notification removed restrictions on imports of low value accessories for the garment sector.

The Export Development Board estimates a 82% decline in garment exports in April this year. However, the industry said April had always been a lean month with Sinhala and Tamil New Year holidays, and the months ahead could be critical.

The tea industry also experienced a sharp decline, when exports tumbled by 50% in March this year.

The Sri Lanka Tea Exporters Association is hopeful that exports will pick up soon once the coronavirus spread eases in the destination countries.

“We have not lost our markets as it is a beverage,’’ president Jayantha Karunaratne said.

He said the only issue was logistical problems and that too is slowly easing with many countries opening up their borders.

The Sri Lanka Tea Board is working out logistics problems with customs, he said.

He maintained t h at although the existing markets will not be lost, the buying power of consumers and importers will decline.

“Our main buyers Russia, Iran, Iraq and Europe have been severely affected by the Covid- 19 and their economies are down,’’ he said.

The EDB has a help desk to facilitate and resolve urgent issues of exporters by networking with relevant organisations and departments.

Also, it provides information on best practices, state concessions, logistics and information on fast evolving global markets.

EDB statistics show that Sri Lanka’s exports have dropped by 26% from January to April 2020 from the same months the year before.

Also, apparel exports dropped by 82%, rubber by 64.9%, tea by 21%, coconut by 35.2% and seafood by 72%.

Other than garments and tea, the next affected industries are tourism, services, and Ayurvedic spa sector. Agri- based value added products, and the boat and ship building industry have also been hit.

In addition, countries have cancelled orders for rubber, coconut and coconut products because of the delay in shipments. Chartering flights for products are costly.