Following the country’s declaration of bankruptcy recently , Sri Lanka’s president Gotabaya Rajapaksa, reportedly announced his resignation this week not long after Prime Minister Wickremesinghe announced he was stepping down, adding yet another blow to the country’s reputation while the apparel sector looks to assure buyers of its stability.

The nation has dominated global headlines in recent months, currently battling its worst economic crisis in 70 years. Sri Lanka’s apparel industry trade body JAAF warned export earnings in the clothing sector for the June-August period can be expected to fall by 20-25% and it is likely to miss the $6bn export target for the year.

It is a far cry from where the country was at the turn of 2022. In March, Sri Lanka was eyeing global garment exports of US$8bn by 2025. It came after the country’s apparel export earnings for January 2022 rose to US$487.6m, the highest in five years.

The apparel sector has hugely benefitted from rigorously applied safety measures following Covid, as well as digital product development technology adoption that helped mitigate supply chain disruptions.

But with the current state of affairs, the industry’s 2030 vision to transform Sri Lanka into a global apparel hub by that year looks bleak.

With apparel accounting for on average 40% of Sri Lanka’s total export revenue, there is an urgent need to maintain buyers’ confidence in the industry.

The global apparel sector is also well placed to help Sri Lanka resurface from this incredibly challenging period and experts are urging brands to commit to their Sri Lankan suppliers.

Though with challenges including a fuel shortage which could potentially impact shipment delivery time, there certainly will need to be an element of patience exercised.

Some brands have already expressed their support of their Sri Lankan partners. The president of Italian fashion group Calzedonia, said he had faith in the resilience of Sri Lanka’s apparel industry and planned to increase sourcing from the South Asian island nation

A spokesperson for Sri Lanka’s Joint Apparel Association Forum (JAAF) acknowledged to Just Style in an exclusive comment that the fuel shortage was “very concerning” and said apparel exporters are “managing day-to-day operations to meet the Production time “.

“Currently, several plants have sufficient fuel stocks to meet ongoing production needs,” the spokesperson added.

Cash starved government has partially reversed a hasty decision of ill-conceived national non-scientific experiment in organic agriculture compelling the treasury to pay billions of rupees for organic fertiliser stocks procured from local manufactures last year .

Organic fertiliser producers have demanded the finance ministry to pay Rs 14 billion for their supplies fulfilling 60 percent of the solid and 90 percent of liquid organic fertiliser requirement for the Yala season.

As a result of spending all most all the allocation of the agriculture sector for organic farming with no avail, the treasury was left with a meagre sum of Rs. 3.8 billion for the payment of organic fertiliser procurement to local producers although their bill was massive Rs 14 billion.

In 2021, the Government has allocated Rs. 50.7 billion on food crops such as paddy, maize, potatoes, big onions, vegetables and fruits including expenditure on organic fertiliser subsidy amounting to Rs. 35 billion.

Agriculture Ministry has announced compensation on the directions of the President for more than a million paddy farmers whose crops failed under an ill-advised scheme to become the world’s first 100-percent organic farming nation.

Therefore the treasury has released a sum of Rs. 40 billion to compensate farmers for the losses incurred during the Yala and Maha seasons 2021 due to the government’s policy of banning the use of chemical fertilisers, a senior official of the treasury said.



After this payment from Rs. 50.7 billion allocation only Rs. 10.7 billion was left with the treasury to make payments for organic fertiliser manufacturers and subsidies for other cultivators of maize, potatoes, big onions, vegetables and fruits, he disclosed.

At that time Sri Lanka was about to face adverse impacts on food security, agriculture industry revenue, foreign exchange earnings and rural poverty pushing the country into a serious crisis.

This was the direct result of shifting the existing local agricultural practices to organic farming without considering the technological, environmental, and economic costs and benefits, several treasury officials pointed out.

Further a sum of Rs. 3.8 billion was spent to purchase organic fertiliser from local producers during the Maha cultivation season last year, finance ministry data shows.

The cost to import nano nitrogen liquid fertiliser (Nano urea) from India was Rs. 9 billion while another sum of Rs.1.3 billion was paid to import 30,000 tonnes of potassium chloride fertiliser.
After settling this expenditure amounting to Rs 14.1 billion, the treasury has exhausted the allocation for the agriculture sector and there was no money for the payment to fertiliser manufacturers, senior official pointed out.

The local producers have supplied their stocks in accordance with proper tender requirements on the recommendation of Agriculture Director General and under the supervision of the national fertiliser secretariat, President of the Environment-Friendly Fertiliser Producers Association, Shammi Kirinde disclosed.

Although the total value of the stock was Rs 22 million in accordance with the tender documents, they have been able to supply fertiliser to the value of Rs 16 billion due to urgent need of farmers, he said adding that even after handing over the necessary documents to relevant authorities, only a sum of Rs 2.4 billion has been paid as a part payment.

A National Fertiliser Secretariat top official who wished to remain anonymous told the Business Times that a stock of organic fertiliser worth of Rs 12 billion has been distributed among farmers and Rs 2 billion has been paid due to financial constraints..

The treasury is releasing money on the basis of Rs 100 million per fertiliser manufacturer and the Secretariat has paid asum of Rs 2 billion to them up to now, he revealed.

The fertiliser stocks have been handed over to the authorities in accordance with the government tender and the agreement with the Lak Pohora Company and Colombo Commercial Fertilisers Ltd, Secretary of the Fertiliser Producers Association Shaminda Kankanamge claimed.

Although the payment should be paid within 28 days after handing over the stocks the authorities have so far failed to make their payments, he added.

He noted that several manufacturers have spent Rs 600-700 million for the organic fertiliser production and others had to bear Rs100-200 million and they had to pay hundreds of thousands of rupees for plastic container and bags suppliers and raw material suppliers.

These manufacturers have become destitute as most of them had borrowed money from banks for seed capital for their production plants , he said, claiming that around 500,000 direct and indirect employees engaged in the process are suffering without any payments at present.