As the country’s exports continue to recover from the COVID-19 pandemic, the Sri Lanka Export Development Board (EDB) remains confident of the future prospects of the country’s export sector, with its focus to break into premium markets.
With the EDB assistance, Sri Lanka’s merchandise export sector during the first 10-month period of the year grew by 21.2 percent year-on-year to US $ 10.06 billion, recovering from the pandemic-led fallout in 2020.
The EDB is currently in the process of updating the National Export Strategy (NES) in conjunction with the new developments and disruptions, in an effort to further strengthen the NES.
Joining for a brief discussion with Mirror Business, EDB Chairman and Chief Executive Suresh de Mel shared his views on the export performances, future prospects and key focus areas of the country’s export sector.
Following are the excerpts from the discussion.
Q : What is your take on the export performance for this year?
A : We believe that the ups and downs in export are because of the pandemic. Especially, we saw notable fluctuations in the export performance during the first and two lockdowns. However, we don’t expect to see such surprises in moving forward, given the success of our vaccination drive.
In this pandemic period, we ensured that our exporters continued their operations. Especially, we facilitated them with curfew permits while also playing our role in facilitating them with the COVID-19 vaccinations. For these tasks, we have set up 14 dedicated help desks within the EDB. Prior to the pandemic, we used to have only one help desk. Considering all the issues, the exporters have performed well. Most of the exporters have received enough orders.
Therefore, we believe that we are on the track to achieve the revised export target of US $ 15.72 billion for the year, consisting of US $ 12.14 billion earnings from merchandise exports and US $ 3.58 billion in service exports.
Q : What’s your view on the organic agriculture policy of the government, in terms of exports?
A : The whole world is moving towards clean foods but there’s no trusted source market in the world to buy genuine clean foods. When the country becomes fully organic, I believe that we can gain the confidence of top premium organic product markets and to supply our organic products premium prices.
In fact, we should build up market linkages to access top premium markets, when Sri Lanka becomes fully organic, by focusing on marketing in advance. If we stick to this policy and get the organic certification for the whole country, I’m sure that our agriculture industry will have a brighter future.
Currently, the National Organic Control Unit is within the EDB, which issues certifications through a third party globally accepted certification body that is accredited in Sri Lanka. We have assisted so many people to obtain these certifications.
There are spices, vegetables and fruits because it’s a premium market with better prices, with value-added products. Moving forward, we can focus on the GI labels, organic certifications and microbiology quality, in order to break into the premium markets with our value-added products.
Q : The EDB together with the Export Agriculture Department early this month invited the cinnamon industry stakeholders (growers, processors, traders and exporters) to become members of the Ceylon Cinnamon GI Association (CCGIA) after securing the geographical indication (GI) label for Ceylon Cinnamon. How is the EDB progressing in facilitating exports of Ceylon Cinnamon with the GI label?
A : Firstly, we need to get people to sign up for this and start marketing it that way. There are certain criteria that we have to follow in this. Therefore, we are getting the stakeholders to join this association in order to use the GI label. We have to upgrade the cinnamon exporters and introduce new markets for them to sell with the GI label.
Although there’s a market for products with the GI labels, we are not in those markets. So, there has to be a change in our marketplace. In addition to the GI label, we need to focus on microbiology quality and value addition aspects.
Q : Is the EDB taking any measures to resolve the shortage of containers and high freight charges faced by the exporters.
A : As this is a global issue, we can only cope with it. We are trying to initiate certain new proposals, including our engagement with shipping agencies to explore the possibility of chartering ships. In fact, the container shortages are partly due to the shortage in shipping.
Q : What are some of the issues of the country’s export sector that hold it from penetrating to new markets?
A : We have to diversify our focused markets and add more value to our products. However, Sri Lankans need to be more entrepreneurial and they should be able to take risks. However, most seek the government to take risks. Then, they have become traders, instead of entrepreneurs. If they are entrepreneurs, they will add value to the product and export to premium markets, unless they are traders. I don’t treat traders as entrepreneurs. They have to be more industrial.
Q : Are you concerned about the complaints regarding export input shortages, due to FX liquidity issues?
A : Not really, because the exporters can import. If you have enough value addition, then there is no problem.
Q : There have been concerns about the NES being stalled and abandoned. What’s the current state of the NES?
A : It’s moving ahead. As certain disruptions are taking place, we have to rethink of some of them and will align them accordingly. We can add more products to the strategy, with the new developments. All of the five products that we are responsible for are being promoted and we have given the responsibility of wellness tourism to the tourism authorities.
By Nishan Fernando