SRI LANKA: Export sector expected to be hit by low prices

In keeping with falling global commodity prices, Sri Lanka’s exports sector would be affected by reducing commodity prices this year, especially in respect of tea, rubber and coconut exports.

"This is going to be a challenging year for Sri Lanka, with the dropping of the prices of exports”, top economist Prof Razeen Salley told a forum in Colombo. He said exports should face no restrictions except on national security grounds and that import protection should be confined to ad valorem tariffs. Furthermore, evidence from other countries shows that revenue loss is minimized because simple, low tariffs increase trade volumes and provide the incentive for previously illicit trade to become licit, he said. "In many instances, the effect is to increase, not decrease revenues,” Salley said.

Latest Central Bank of Sri Lanka (CBSL) data showed that rubber production in the first 10 months of 2015 fell by 12.8 % year on year to 76.11 million kg. Rubber production may have been affected by the vagaries of the weather, where it's not possible to tap when there are rains as that would wash away the rubber latex.

Source: Daily “The Island”, Colombo; 2 Jan 2016
(Syed Rashid Ali, Karachi, Pakistan)