By: Staff Writer
Colombo (LNW): The Sri Lankan rubber product export industry is experiencing revenue decline by around 15-20% Year-on-Year (YoY) in 2023, amidst the economic troubles in the West.
This was mainly due to the economic troubles faced by the EU and the US, which were the main markets of the Sri Lankan rubber product export industry.
The Sri Lanka Association of Manufacturers and Exporters of Rubber Products (SLAMERP) forecast for the rest of the year is based on what has been observed in the actual numbers. Forecasts stand unless drastic changes take place, such as a market change. However, that is unlikely.
The (SLAMERP) in a statement said that the value-added rubber export sector has seen a 10% revenue decline in the first three months of 2023 from $ 251 million to $ 231 million.
The declining trend has been seen from 2022 in which year a near 20% revenue reduction to $ 1 billion was recorded from $ 1.2 billion in 2021.
SLAMERP DG Rohan Masakorala said forward order books too have dropped considerably, and the number of factories have reduced production capacity or are having temporary shutdowns, as both external demand and domestic demand has come down drastically.
Although the input costs too have gone down, the buyers are continuously asking for price reductions to place new orders, he added.
According to Masakorala Europe has seen a drastic downturn in orders, while the US remained stagnant in the first quarter of 2023.
On the global front, the demand is coming down due to high inventory with buyers and also the recessionary pressures linked to inflation and interest rate hikes which are affecting the total global supply chain.
SLAMERP also expressed concern that the only positive factor they had was the global freight which peaked in the last two years, was coming down due to market forces, but locally the shipping ministry has taken decisions to artificially inflate freight rates by allowing unbundling of the freight to avoid market forces by removing a competition Gazette that was originally introduced in 2013.
SLAMERP said that they are confident that President Ranil Wickremesinghe whom they have spoken to will fix this issue.
The industry also said that the Government must focus on supporting the export industry to grow, encourage new export diversification and make the national export strategy be implemented along with the rubber master plan which had been neglected.
The country’s economic problems have to be resolved by strengthening the export sector with every possible support extended by all line ministries, SLAMERP DG emphasized.
