Twenty five per cent decline in apparel exports expected this year

by Hiran H. Senewiratne

The decline in our total  apparel exports would be by 25 percent this year on account of the pandemic. This would make a considerable dent in the US $ 4 billion foreign exchange earned annually through apparel exports. But the apparel sector will be able to come out of this crisis stronger than before due to government support, Joint Apparel Association Forum (JAAF) chairman A.Sukumaran said.

Sukumaran was addressing a media round table conference on Tuesday at the Movenpick hotel in Colombo.

He said that JAAF expects further demand contractions that could result in reductions in apparel exports by an additional 30-40 percent after June, in its best-case scenario. 

Sukumaran said that Covid 19 affects the apparel supply chain, the export market and due to that the industry is unable to fulfil certain obligations. 

” Our industry also builds on three pillars;  one is being a reliable supplier and all business practices follow high ethical standards.”

‘The apparel sector is the single largest exporter contributing seven percent to the country’s GDP. When it comes to industrial exports it contributes 59 percent. The industry’s total export earnings is 49 percent, he said.

 ‘Following this, the social stigma surrounding apparel workers too was expected to have an impact on the apparel sector, Brandix chairman Ashroff Omar said.

He said that  his Minuwangoda factory is functioning on a small scale even after detecting the first Covid 19 patient in October. ” We are looking after all employees and  police,  CID, PHIs, Labour Department and other relevant parties are closely watching our operations, which follow all Health Ministry protocols, Omar said.

‘Most of the small and medium enterprises (SMEs) in the sector depend on fabrics and accessories supplied from China and the disruption of the supply chain due to the global outbreak of the virus affected exporters severely in the first half of this year, former JAAF chairman Noel Piyathilake said.

He said that there are 81 factories out of which 37 are direct exporters and 41  subcontractors, which provide 25000 employment and 15 percent export earnings. “The SME sector is also supporting the informal sector as well. If the SME sector is affected those informal sectors also suffer, Piyathilake said.            

Sri Lanka last year earned US $ 5.3 billion from apparel exports, an increase of 5.1 per cent  from 2018. Prior to the COVID-19 pandemic the industry originally expected a 6 percent  increase in exports for 2020.

Export earnings from apparel and textiles in October declined by 18.93  percent to US $ 356.52 million and by 21 percent  to US $ 3.6 billion in the first 10 months of 2020 from a year earlier.