Strategic plan will help develop exports - EDB chairman

by Lalin FERNANDOPULLE

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The export sector, a main contributor to the country’s economy is facing tough times due to the decline in exports to key markets which are affected by the global crisis.

According to the Export Development Board (EDB), exports to the United States dropped to around 28 per cent this year from 32 per cent last year.

Officials of the EDB said that exports to Europe will drop due to the low demand for many products.The demand for traditional agricultural products has been high.

President, National Chamber of Exporters (NCE), Rohan Fernando said that the projected export earnings during the past two months dropped by around US$ 200 million due to the global economic slow down.

“Despite the drawback the export sector earned US$ 1.4 billion so far for the year surpassing last year’s earnings of US$ 1.1 billion. Export earnings up to October this year were US$ 1.1 billion which is above last year’s earnings”, Fernando said.

The gloomy scenario will change by mid January with world exports expected to stabilise. The country’s export earnings recorded a 12 per cent growth up to September this year. Buyers have called upon exporters to hold back shipments for a certain period.

EDB Chairman, Anil Koswatte said Sri Lanka’s export sector is geared to face the impact of the global economic crisis due to the diverse products, developed domestic industries and promotion of non traditional items.

He said despite many challenges the export sector recorded a 12 per cent growth and expects around US$ 8.2 billion income this year. Export income recorded US$ 5.4 billion up to August this year compared to US$ 4.8 billion earned last year.

“The country is now in a better position to face the impact of the world financial crisis compared to countries that exports large volumes. The support of the government and the strategic plan to develop exports will help to sustain growth levels” Koswatte said.

The EDB will focus on promoting value added low cost products that will have a demand in international markets.

Exports to the United States and Europe have dropped considerably due to the low demand.

The government has allocated Rs. 1 billion through the 2009 Budget to promote exports and grant subsidies. Around Rs. 500 million will be used to develop agro based products and Rs. 300 million to promote the ‘One village one product’ concept.

Koswatte said import taxes were introduced to develop domestic industries and exports.

The scope for expansion of trade in emerging markets is vast.

Trade promotions will be held in South Africa, East Europe and South America which have a market for Sri Lanka’s non traditional agro-based products. “The apparel industry will receive trade concessions from the EU though even if it not under the GSP Plus scheme. The industry will need marketing strategies to be competitive”, he said.

Director, Promotion, Sri Lanka Tea Board, Hasitha De Alwis said tea prices in the world market since October declined and the national average for high, middle and low grown teas was Rs. 224 per kilogram at the November 18 auction.

He said the global demand for tea and beverages will stabilise quickly.