A Review of the Sri Lankan Agriculture Sector and its opportunities
The agricultural sector adds approximately 7 percent to the domestic GDP from which the fisheries industry adds roughly 1.2 percent with 0.6 percent from the livestock industry. In 2018, the agricultural sector employed over 25 percent of Sri Lankans. While Sri Lanka is a fertile tropical land with the ability to grow and process a range of vegetation, problems such as productivity and profitability are hampering the sector’s development.
Sri Lanka is importing a range of agricultural and food products including wheat, lentils, sugar, fruit, and milk. Food and beverage imports represented 7.2 percent of total imports in 2018. Sri Lanka is also importing feed for animals. In 2018, total imports of agriculture, food, and beverages amounted to $1.6 billion. U.S. suppliers have significant opportunities in this market – in fact, in 2018, Sri Lanka imported about 1.29 million tonnes of wheat. All imports were traded transactions, most of which were of Canadian origin. Exports of U.S. wheat to Sri Lanka in 2018 were estimated at $28 million.
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• Lentils: Sri Lanka is one of the leading importers of red lentils estimated at around $79 million in annual exports. India is Sri Lanka’s primary exporter of lentils. U.S. providers have significant possibilities in this industry. It is possible to develop a competitive pricing system for long-term market sales. Because of the superior quality of U.S. lentils, many local customers voiced interest in working with U.S. vendors.
• Animal feed: Sri Lanka spends about $176 million per year on animal feed imports. The primary components used in the animal feed sector are soy and corn, which constitutes to about 500,000 metric tons of animal feed annually. Another advantage is that animal feed is not subject to GM constraints. In 2018, the United States exported about $75 million of animal feed to Sri Lanka.
• Dairy Products: Dairy products are a major import of Sri Lanka. In 2018, the nation imported $349 million in milk and milk products. In contrast, in 2018, the United States exported only $8 million of dairy products to Sri Lanka.
• Meat: There was only $0.6 million in total U.S. meat and edible meat offal exports to Sri Lanka to-date. However, there is increasing demand for the foodservice industry for U.S. turkey, duck and other kinds of meat.
• Cotton, yarn, and fabric: Sri Lanka annually imports about $208 million in cotton (raw cotton, yarn, and wool). In 2018, U.S. imports of cotton, wool and fabric were approximately $1.5 million. U.S. cotton manufacturers have significant possibilities to supply the export-oriented apparel industry in Sri Lanka.
• Sri Lanka’s present leading cotton distributors are Hong Kong, India, Indonesia, and South Korea. In 2018, U.S. imports of cotton, yarn, and fabric were approximately $1.5 million. U.S. cotton manufacturers have significant possibilities to supply the export-oriented apparel industry in Sri Lanka. Sri Lanka’s present leading cotton distributors are Hong Kong, India, Indonesia, and South Korea.
OSL Take:
Sri Lanka’s agriculture sector is ripe with business/investment opportunities due to the development and upgrading of the country’s agriculture industry to be on par with global standards. Foreign businesses/investors could explore business/investment opportunities in Sri Lanka’s agriculture sector.
| Article Code : | VBS/AT/01102019/Z_T2 |