The Joint Apparel Association Forum (JAAF) thanked all industry stakeholders for ensuring that the sector meets its commitments in the face of unprecedented challenges, as apparel export earnings expanded by 30 per cent Y-o-Y upto 446 million in May 2022.
Accounting for approximately 6 per cent of Sri Lanka’s Gross Domestic Product (GDP) and almost half of all merchandise exports, the apparel sector serves as a bulwark of the nation’s economy. While the sector continues to face significant limitations from continuing disruptions in energy supply and logistics, cumulative export earnings from the sector increased by 16% YoY up to US$ 2.2 billion as at May 2022.
The sector is still hopeful of achieving the export target of $6 billion by the end of 2022, however, it will have first overcome significant obstacles ahead, says YohanLawarence, Secretary General, JAAF.
The sector needs to prioritize support for SME apparel producers, who are an equally essential component of the industry that is also facing severe challenges in day-to-day operations, adds Lawrence.
Despite unprecedented domestic volatility, unstable global market conditions and escalating raw material and logistics costs, Sri Lanka’s apparel sector has provided extraordinary support to the national economy, including direct surrender of export proceeds to the Government.
All apparel companies receive payments through the formal banking system, which is visible at all times to the Central Bank. Once they receive these funds, they are permitted to use these dollars to fund raw material imports, which in previous years stood at approximately US$ 2.5 billion annually, adds Lawerence.
On a monthly basis, the balance industry’s export proceeds are converted into Sri Lanka Rupees to be provided to leading banks towards payments for essential imports such as fuel, gas, food and medicine, Lawrence explains.
These extraordinary measures have been commended by the Prime Minister’s office as having provided vital assistance in mitigating issues around energy, transport and healthcare in the country.
