Red tape delays raise costs for Sri Lanka fertiliser importers
ECONOMYNEXT – Delays of up to one month in releasing shipments of imported fertiliser for use and distribution are causing importers to incur significant storage costs, a new study of Sri Lanka’s agricultural export competitiveness has revealed.
Predictability of time and cost taken to comply with regulations is a critical factor that determines trade competitiveness, according to a study by Verité Research, a private think-tank, of difficulties faced by Sri Lankan agriculture exporters.
The majority of the local agriculture sector’s fertilizer needs are met through imports with the quality, cost and timely availability of fertilizer a critical determinant of agriculture productivity and export potential, it said.
Some exporters require special formulations of fertilizer that comply with the requirements of their buyers.
“The current procedures in place for importing fertilizer are cumbersome, time consuming and unpredictable and often result in significant delays,” said the study on ‘Sri Lanka’s Domestic Barriers to Trade: Case Studies of Agricultural Exports’.
Delays in test reports add to storage cost, Verité Research said.
Importers are not allowed to use or distribute fertilizer until test reports on standards compliance are issued.
“The delays in test reports result in constant delays in the release of shipments from warehouses. In general, shipments are released for use and distribution approximately one month after arrival, causing importers to incur significant storage costs.”
Verité Research said predictability of time and cost taken to comply with regulations is a critical factor that determines trade competitiveness.
“This feature forms an integral part of a company’s ability to consistently deliver on time to its trading partner and establish a reputation,” their study said.
“Predictability can only be achieved when government agencies have clearly-outlined, standard procedures that are administered within a defined time period. The trader must be able to know with confidence that if the outlined procedure is followed and the listed documents are submitted, then the trader will be able to clear cargo within the given period of time.”
(COLOMBO, June 19, 2017)