The Sri Lankan government has allowed apparel exporters to make payments to their foreign suppliers using their foreign earnings. Sri Lankan Central Bank has permitted to retain foreign currency for the same, according to Joint Apparel Association Forum (JAAFSL), the country’s apex body for the textile industry.
“Some of the immediate concerns of the export sector have been addressed by the government. Exporters are now allowed to purchase fuel directly from the Ceylon Petroleum Corporation (CEYPETCO) and Lanka IOC in US dollars, helping exporters to avoid undue disruptions from power cuts. Apparel exporters are also able to make payments to their foreign suppliers using their export earnings, with the Central Bank allowing exporters to retain foreign currency to do so,” Yohan Lawrence, secretary general of JAAFSL, said in an exclusive virtual communication with Fibre2Fashion.
“We continue to fulfil orders and meet production targets. Logistical and other issues may pose us to reschedule some of our production since we are dependent on imported raw materials. Apparel exporters have taken all possible measures to overcome such challenges, for instance by using air freight for certain orders, sacrificing margins to ensure that we meet our commitments to our brands and buyers,” Lawrence said in an email communication.
Sri Lankan government has allowed apparel exporters to make payments to their foreign suppliers using their foreign earnings. Sri Lankan central bank has permitted to retain foreign currency for the same, according to Joint Apparel Association Forum (JAAFSL), the country’s apex body for textile, which is confident of early solution to current crisis.
In spite of the current economic crisis in the country, key institutions supporting trade and exporters continue to function with minimal disruption. For instance, the Colombo port has continued to operate without delay or congestion during the past few months. The port also has independent arrangements in place to ensure the availability of fuel for internal requirements.
On the question about the shifting of orders to India, JAAFSL said that it’s natural for competitor countries to try and capitalise on disruptions to gain market share. “However, our relationships with our buyers have been established over several decades. They have remained strong and enduring, even throughout the war (with LTTE which ended in 2009). Hence, we are confident that the risk of orders migrating to other countries is minimal, particularly considering Sri Lanka’s unique competitive positioning as an ethical and sustainable producer of value-added and high-value apparel. We have invested significantly in research and development to enhance our product development and innovation capabilities. Hence, we fulfil some very specific buyer needs that are not easily transferable. Our competitors, who are mostly based in Asia, have built their own capabilities which tend to somewhat differ from our own, considering especially their levels of innovation and value-addition.”
JAAFSL said that necessary steps have been taken to minimise disruptions – for instance, by securing better access to fuel. Even amidst multiple challenges, Sri Lankan apparel exports recorded their highest ever cumulative value for January in 2022. “The industry is strong and resilient – as demonstrated amply during both decades of war and following the pandemic. Hence, we are confident that the industry will be back on a growth trajectory, once pressure from domestic challenges ease to some degree,” Lawrence said.
According to JAAFSL, Sri Lanka is now on the correct path to address its economic challenges. The textile industry body is confident of early solution to the current crisis, which had been triggered by several events including some of which has its origins in geo-politics.
Fibre2Fashion News Desk (KUL)
