Lankan exporters invited to utilize Pakistan’s GSP Plus with EU

Daily Mirror - 24/02/2014
By Sashi Ratnayake

Pakistan’s High Commissioner to Sri Lanka Major General Qasim Qureshi made an open invitation to Sri Lankan exporters to utilize the current Generalized System of Preferences Plus (GSP) scheme Pakistan enjoys with the European Union (EU) and expand trade between the two countries through the existing free trade agreement (FTA).

“Pakistan’s new GSP plus scheme with the EU is an opportunity for Sri Lankan exporters. For that we should jointly explore whatever is possible within the rules and regulations of the trade concession,” Qureshi said during a discussion held at the National Chamber of Commerce, recently.

Pakistan was granted the GSP plus status by the end of December 2013 till the year 2017. The GSP Plus status will allow almost 20 percent of Pakistani exports to enter the EU market at zero tariff and 70 percent at preferential rates, enabling Pakistan to export more than US $ 1 billion worth of products to the international markets. It is said that only the textile industry would earn profits of more than Rs1 trillion per year.

Meanwhile, Pakistan’s High Commission First Secretary Hasan Zaigham joining the discussion explained Pakistan’s position as the third largest consumer of tea in the world.

He pointed out though Sri Lanka exports tea to Pakistan, only elite Pakistani citizens could afford to enjoy the exported tea while the majority of the middle class drinks cheap Indian tea. He urged Sri Lankan tea exporters to look at the possibility of revising the prices to cater to the growing middle class of Pakistan.

According to Zaigham Pakistan by 2012 had a population of 179.2 million people who extensively use motor vehicles. During his presentation he made a strong case for Lankan tyre exporters to contemplate on entering Pakistani tyre market.

Throughout the discussion the Pakistani officials repeatedly mentioned about the interest some of the Pakistani companies have upon entering the sugar industry of Sri Lanka, while explaining higher demand for fruits such as cashew and pineapple in Pakistan showing the new areas the two countries could work upon.

Sri Lanka and Pakistan bilateral trade currently stands at US $ 440 million and it is expected that the trade will grow over US $ 1 billion in the coming few years.

Pakistan expects to invest US$ 500 mn in Sri Lanka

Daily News - 24/02/2014
By Indunil Hewage

Pakistan is expected to invest around US$ 500 million in Sri Lanka in the next three years, said Hasan Zaigham, the First Secretary, Pakistan High Commission in Sri Lanka addressing a seminar on Sri Lanka and Pakistan trade, organized by the National Chamber of Commerce in Sri Lanka.

Investments from Pakistan into Sri Lanka have begun to pick up. As of December 2012, the total cumulative investment stood at around US$ 11.9 million and currently Investment of around US$ 233.3 million is in the pipeline.

Pakistani companies have invested in agriculture, IT, textiles and construction /real estate development.

A number of Pakistani companies have shown interest in investment in sugar sector of Sri Lanka.

Bi-lateral Trade between Sri Lanka and Pakistan to be increased to US$ 1 billion from current US$ 400 million.

“Promotion of Ceylon Tea and apparel in Pakistan, Sri Lanka needs to engage in an aggressive campaign in Pakistan to change the preference of the consumers,” Zaigham said.

Pakistan is the fourth largest importer of tea in the world after Russia, UK and Egypt.

Pakistan is the third biggest consumer of tea. The demand for black tea is over 170 million kg.

“Under-utilization of concessions provided by the both sides under the Sri Lanka Pakistan Free Trade Agreement is a major issue,” Zaigham said.

Tariff Rate Quota (TRQ) of 10,000 metric tons on tea is however not fully utilized by Sri Lanka. In 1975, close to 67 percent of Pakistani tea imports came from Sri Lanka. By 1998 it declined to 7 percent and to further 2.6 percent by 2003.

The TRQs granted to Sri Lanka on apparel also remain underutilized.

The opportunity offered by the FTA could be exploited by the apparel sector by taking a serious look at the Pakistani market.

Sri Lankan raw rubber exporters have a major opportunity to capture a larger share of the Pakistani market and there are also vast opportunities available to export pineapple and cashew nut.

Since many of the goods that Sri Lanka exports to Pakistan have low preference, there may not be a significant expansion in traded volume of exports in the near future, unless Sri Lanka diversifies its basket of goods to higher-preference point items.

Impact of the Sri Lanka- Pakistan Free Trade Agreement on the value of Sri Lankas exports to Pakistan seemed negligible.

“Despite the 4600 tariff lines offered to Sri Lanka only around 80 percent of its exports take place using 16 to 17 tariff lines,” Zaigham said. However, Pakistan experienced growth in exports to Sri Lanka at a much faster rate.

Sri Lankan imports from Pakistan rose from US$ 192 million in 2008 (1.4 percent of total imports), to US$ 351 million in 2012 (2 percent of total imports).

Pakistan imports from Sri Lanka were valued at US$ 83.412 Million in 2012. Pakistan exports to Sri Lanka comprise mainly of cotton and fabrics which in 2012 accounted for 32% of total exports.

In 2008 the value of Sri Lankan exports to Pakistan was US$ 71.37 million (0.9 percent of total exports). 2012 saw this figure rise to US $ 82.75 million, but this figure still accounted only for 0.9 percent of Sri Lanka's total export. Pakistan exports are being value added by Sri Lanka for export to other markets.

Further liberalization of trade in goods by rationalization of negative lists will help boost the bi-lateral trade between two countries. Broadening and deepening on FTA by including Investment and Services , Encouraging bilateral investments , building institutional mechanisms including more robust dispute resolution mechanism and customs cooperation, marketing Sri Lanka as a tourist destination in Pakistan, getting Inputs from the private sector in technical review talks on FTA and encouraging business delegations to participate in trade fairs will create many opportunities for both countries to enhance trade and investment opportunities.

Lanka, Iraq bilateral trade up by 80% to $ 90 mn

Daily News - 20/02/2014

Rishad Bathiudeen, Minister of Industry and Commerce meets Iraqi Ambassador in Sri Lanka Kahtan Taha Khalaf in Colombo

As bilateral trade topped $90 mn, Iraq and Sri Lanka are aiming to break new grounds when largest joint trade session will commence in Baghdad next week-and OPEC's second biggest oil power is now ready to channel its Basra Light crude to Sri Lankan refineries.

" In the past Sri Lanka bought and refined our oil but has discontinued. You can buy our Basra Light brand of crude streams and we are ready to supply them to you as we are a top buyer of Ceylon Tea," said Iraqi Ambassador in Sri Lanka Kahtan Taha Khalaf yesterday.

Iraq is OPEC's second biggest oil power after Saudi Arabia. According to the Department of Sri Lanka, the value of total trade between the two countries that stood at $ 8.72 mn in 2003 topped $ 89.99 mn in 2013. Sri Lanka exported goods totalling $ 89.80 mn to Iraq and imported only goods of $ 0.19 mn from Iraq during 2013. Tea has been a major export item to Iraq accounting for about 95% of the total exports to Iraq. It is also estimated that almost 15,000 MT of Ceylon tea is being exported to Iraq indirectly through Dubai, Jordan and Kuwait.

"In the past Sri Lanka bought and refined our oil but has discontinued. You can buy our Basra Light brand of crude and we are ready to supply them to you as we are a top buyer of Ceylon Tea. You can refine Basra light crude to more than 50%, even up to 60% here," Khalaf said.

SRI LANKA: Apparel exports exceed $4bn target

Sri Lanka's apparel and textile sector exported a record US$4.3bn in 2013 and its Joint Apparel Association Forum (JAAF) has predicted overseas sales will continue rising this year.

The JAAF president Noel Piyatilake told just-style the industry is targeting an ambitious target of US$6bn in exports by 2020, making Sri Lanka one of the world's top 10 apparel exporting countries.

Piyatilake is also hoping to gain extra leverage from planned trade agreements. "We have made several representations to the Sri Lankan government to explore the option of entering into preferential treatment agreements with several countries including China, Japan, India, Brazil and Russia, which will benefit our sector immensely," he explained.

Tuli Cooray, the JAAF secretary general, added that the 2013 figures were particularly encouraging given the original export sales target for last year was US$4bn. In 2012, Sri Lanka clothing and textile producers exported US$3.8bn worth of products.

Most sales were made to customers in the United States and Europe, with more than US$1.9bn of clothing exported to the European Union and US$1.8bn to the US.

Meanwhile, discussions are already underway between the Sri Lankan and Chinese governments for a possible free trade agreement which officials predict will be finalised and signed this year (2014).

The Sri Lankan apparel sector is particularly optimistic about this potential deal as it views China as a key emerging market, ripe for well-priced Sri Lankan exports.

Lanka mulling to be a medical tourism brand

Asian Tribune - 13/02/2014

Merging its latest tourism arrivals to its modernizing healthcare, Sri Lanka is mulling to be a medical tourism destination next-while also opening a new niche service niche in its surging exports.

“Due to the support of well-trained, high quality healthcare professionals, availability of treatment centres as well as pharmaceuticals, we are witnessing the emergence of a new sector, that is medical tourism, contributing to our service exports” said an upbeat Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka on 12 February in Colombo.

Minister Bathiudeen was addressing the launch event of the twin exhibition -Intrad 2014 and Arogya 2014- at Hilton Colombo on 12 February afternoon. The event to be held from May from 16th to 18th in Colombo is organized by the National Chamber of Commerce of Sri Lanka with the Ministry of Industry and Commerce, Ministry of Health, Department of Commerce, Ministry of Traditional Industries & Small Enterprise Development and EDB being co-organisers. During the event, Minister Bathiudeen also launched the twin event’s official website, www.intrad-arogya2014.com.

“The INTRAD 2014 and Arogya 2014 are gaining gradual recognition among our business community as networking events for these growth sectors in Colombo. I am given to understand that INTRAD is a wide ranging exhibition, including industries, imports and even exports. As the Minister in charge of exports, I commend your efforts to promote our exports through this series” said Minister Bathiudeen, addressing the event,

He added: “In fact, I am pleased to share the good news with you on our exports. As announced two days ago, earnings from exports during 2013 grew by 6.3% to $ 10.38 Bn. As the Minister of Industries, I am also pleased to note that Industrial exports, have led 2013 December growth on Year on Year basis. In December, monthly Industrial exports increased by 15.2% to $ 741 Mn. These strong growth rates are reported at a time when we target national exports goal of $ 20 Bn by 2020 under the committed vision of HE the President Mahinda Rajapaksa. NCC’s other concurrent exhibition, the Arogya series, focuses on healthcare. With only a per capita healthcare expenditure of $ 175, at first, Sri Lanka does not appear to have an advanced healthcare infrastructure similar to the developed countries. However, this does not show us the full picture. Due to the support of well-trained, high quality healthcare professionals, availability of treatment centres as well as pharmaceuticals, we are witnessing the emergence of a new sector, that is medical tourism, contributing to our service exports. “

Minister further said, “Studies show that around 15% of patients in Sri Lanka are foreign patients, such as from Maldives. I am pleased to say that two healthcare companies, that is Lanka Hospitals and Durdans, already have active programs for foreign medical tourists. In fact, the Export Development Board under my Ministry, which is also partnering for INTRAD and Arogya, believes that medical tourism is a promising service sector to drive our foreign exchange earnings. Developing a strong niche in medical tourism, can result in a special tourism brand for Sri Lanka in the long term. Our tourism sector reported more than 1.2 million arrivals in 2013, according to the office of Sri Lanka Tourism. I wish to commend the Economic Development Minister Hon Basil Rajapaksa for this growth. Since medical tourism is at the middle of several sectors, such as tourism, healthcare and inbound travel packaging, we believe that Public Private Partnerships are a good way to strengthen this promising sector, so that our government’s goals in tourism related hub synergies are leveraged well”.

“The twin events have progressed considerably during the last few years” revealed Sunil Wijesinghe (Chairman-National Chamber of Commerce). “These two events in coming May in Colombo will have international participation like last year where Japanese, Chinese, Indian, and Pakistani delegates took part” Wijesinghe added.

“Some stalls of INTRAD 2014 and Arogya 2014 are already sold out” said Thilak Godamanna, Snr. Deputy President of NCC. “We hope this year’s event will be more successful than last year’s” Godamanna said.

Exports up by 6.3% to US$ 10.38 bn in Dec.

Daily News - 11/02/2014

Sri Lanka's external sector strengthened further with continued inflows to both the Current Account and the Financial Account of the Balance of Payments (BOP)in December 2013.These inflows resulted in a significant increase in the overall balance as at end December 2013, the Central Bank said yesterday.

Earnings from exports recorded an increase, while a notable reduction in imports was witnessed during the month, considerably reducing the trade deficit. Inflows on account of workers’ remittances and tourist earnings also recorded the highest values during a month, while inflows to the Financial Account increased moderately during December, the Bank said yesterday.

Earnings from exports, which surpassed US dollars 1 billion during the preceding two months continued to rise in December 2013, recording an increase of 13.2 per cent in December 2013, while expenditure on imports recorded a marginal increase of 2.1 per cent. As earnings from exports increased by more than the increase in expenditure on imports, the trade deficit contracted significantly by 12.9 per cent to US dollars 565 million in December 2013.

Exports in December 2013 increased to US dollars 986 million due to higher earnings from industrial and agricultural exports. Industrial exports, which account for more than three quarters of total export earnings, increased by 15.2 per cent on a year-on year basis to US dollars 741 million in December 2013 with continued growth in exports of textiles and garments. Earnings from export of textiles and garments grew by 26.9 per cent year-on-year to US dollars 454 million in December 2013.

Export of garments to the EU and USA, which are the major export destinations for garments, grew by 24.9 per cent and 35.6 per cent, respectively in December 2013.

Meanwhile, export of rubber products increased by 22.4 per cent to US dollars 94 million due to higher growth in surgical and other glove exports.

Export of leather, travel goods and footwear also grew by 82.4 per cent, year-on-year. Apart from these, plastics and articles thereof, chemical products and ceramic products also recorded positive growth.

However, earnings from the export of transport equipment, which include ships and boats declined significantly by 84.7 per cent due to the high base in 2012. Earnings from petroleum products exports also declined by 13 per cent, due to a decline in volumes, as the price was higher than in competitor countries. Earnings from agricultural exports rose by 11.4 per cent, year-on-year, to US dollars 242 million in December 2013, led by tea exports.

Earnings from tea exports increased by 7.3 per cent to US dollars 148 million in December 2013, due to favourable prices that prevailed in international markets, despite a decline in export volumes.

The average price of tea exported increased to US dollars 5.12 per kg in December 2013 from US dollars 4.47 per kg in December 2012. Earnings from coconut exports recorded a significant growth of 31.9 per cent led by an increase in kernel products due to both higher export volumes and prices. Earnings from the export of spices increased by 13.8 per cent to US dollars 26 million led by higher export volumes in pepper, cinnamon and nutmeg and mace exports.

Lanka records highest footwear & leather exports

The Island - 09/02/2014

Sri Lanka's booming footwear and leather sector has demonstrated the highest exports surge in recent history while the industry players lauded praise on the government for the support given to them. "Our footwear and leather exports have shown a strong growth trend. In 2012, exports from this sector stood at $ 30 Mn but now it has registered a remarkable 63% increase in 2013 to $ 51 Mn" said a satisfied Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) on February 7 in Colombo.

Minister Bathiudeen was addressing the inauguration event of the sixth edition of Footwear and Leather Fair on 07 February at BMICH, Colombo. Joining the event as the Chief Guest was Basil Rajapaksa (Minister of Economic Development), and other Deputy Ministers-Lakshman Wasantha Perera (Deputy Minister of Industry & Commerce) and Weerakumara Dissanayake (Deputy Minister of Traditional Industries & Small Enterprise Development), as well as members of diplomatic community from 13 countries, international participants from Egypt, France, Korea, Kenya, Germany, Seychelles and -including a delegation from Iran. 19 Indian exhibitors from Indian Footwear Component Manufacturers Association (IFCOMA) and one Chinese exhibitor were taking part in the event which was first held in 2007. The sixth edition, organized by Export Development Board, the Ministry of Industry and Commerce, Industrial Development Board and the Sri Lanka Footwear and Leather Products Manufacturers' Association (SLFLPMA), is the international level platform for Lankan footwear and leather product exporters, manufacturers and Small and Medium Enterprises (SMEs) to showcase their talents and capabilities locally and globally.

"This event is a strong platform for networking and market diversification for Lankan stakeholders" said Minister Bathiudeen, and added: "What is more interesting is that this event is also taking place at a time when our footwear and leather exports are showing a strong growth trend. In 2012, exports from this sector stood at $ 30 Mn but now it has registered a remarkable 63% increase by 2013 to $ 51 Mn. Having successfully completed five editions, the EDB is organizing the 6th event with the valuable support of Industrial Development Board, Sri Lanka Footwear and Leather Products Manufacturers' Association and other stakeholders-specially the more than 40,000 strong workforce in this sector.

‘As you are aware, the leather and footwear industry of Sri Lanka has also been identified by my Ministry as a thrust industry for development. Accordingly, the ministry has taken many initiatives to safeguard the local manufacturers and also to develop and promote exports. I also wish to commend producers and exporters in this sector as well as award winning Sri Lankan footwear exporters in Sri Lanka such as Michelangelo Group who are successfully supplying to global footwear brands such as JC Penny, John Lewis, and Bata Switzerland and even the competitive Italian market.

Our domestic supply source is bovines, and the numbers of Sri Lanka's bovines, have registered an encouraging 19% increase from 2002 to 2012.