Sri Lanka firms see Coronavirus disruptions, more if epidemic continues: Chamber survey

ECONOMYNEXT- Sri Lanka’s Ceylon Chamber of Commerce (CCC) said about half of the respondents to a survey of member firms had reported sales declines, import disruptions or had cancelled business visits due to an ongoing outbreak of Coronavirus (COVID19).

The chamber said 49 percent of firms in a survey said they had faced issues due to the outbreak during the three weeks from January 24 to February 14.

“Forty percent of the survey respondents stated that they had a sales decline in the same period,” CCC said.

“The disruption to supply chains and travel is the key concern that policymakers are trying to tackle,” CCC said.

Survey respondents said inventories had been stocked up in preparation for the Chinese New Year, which allays immediate concerns, but stocks have to be monitored in March and April.

Forty-three percent of those surveyed said there was a slowdown in imports from China, while 27 percent said they had faced no decline, but are expecting supply disruptions over the coming weeks.

China is Sri Lanka’s second largest source of imports, accounting for 21 percent of the total.

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Garment manufacturers have been dependent on China for their raw materials.

Apparel exporters told EconomyNext earlier this month that gravity of the impact could only be determined when China opens its markets.

Survey respondents said inventories had been stocked up in preparation for the Chinese New Year, which allays immediate concerns, but stocks have to be monitored in March and April.

Sri Lanka Central Bank said that suppliers’ delivery time was going up especially in the wearing apparel sector and the import orders for materials from China have delayed ‘indefinitely’.

Sixty-five percent of the surveyed businesses had cancelled their business trips in the Asian region making it a key concern, the chamber said.

Despite the uncertainty, there is also an opportunity for countries like Sri Lanka to benefit with trade and supply chain realignment, CCC said.

Tourism is one of the major industries affected, as 7 percent of Sri Lanka’s tourist arrivals were from China in 2019.

State tourism officials have said Sri Lanka would experience a steep fall in Chinese tourist arrivals in February as full impact would factor in.

Overall tourist arrivals dropped 7.4 percent in January 2020, from a year earlier to 226,094.

Tourist arrivals from China to Sri Lanka have dropped about 40 percent from January 23 as both countries tightened travel requirements in a bid to contain the spread of the novel coronavirus, officials said.

Sri Lanka recorded just one COVID 19 case, a Chinese tourist, who was released from hospital after recovering last week. (Colombo/Feb21/2020)