Floriculture industry hit due to bar on chemical imports

The Central Bank should be more flexible in its policies to keep the export industries afloat, says Dilip de Silva, CEO of Serendib Horticulture Technologies.

Noting that the present economic crisis of the country has drastically affected the floriculture growth he said the industry is unable to import chemicals that are required by the plant tissue culture production, through its chemical suppliers, due to the lack of dollars in the country.

“Many attempts by the exporters to fund the chemical importers through its earned foreign currency have not materialized due to the current restrictions imposed by the Central Bank of Sri Lanka. Sri Lanka Export Development Board which has been working on this too has not been able to find a solution to this problem. If within the next two weeks a solution to this is not found many plant tissue culture companies will not be able to produce plants for export. This will result in approximately USD 6 million loss in revenue.”

He said regular power cuts too have affected the quality of plants produced. Europe, which is the main market for exports of floriculture products, has already started looking at sourcing from China and other Asian countries. Cost of production has increased by approximately 30-40 % due to high freight rates and other inputs. In order to maintain the clients, most companies have started exporting at cost price or even at a small loss.

“Unless there is political and economic stability in the country within the next month or so, most companies will find it difficult to maintain their exports. Investors who showed interest in investing in the Sri Lankan Floriculture Industry is looking at other East Asian countries.”

Unless the government concedes to the voice of the majority and allows the establishment of a stable government and thereby stabilizes the economy, the future of the export industry looks bleak, said Dilip de Silva.