Sri Lanka sees orders slow as coronavirus hits main export markets

5 March 2020 | By: Hannah Abdulla

Sri Lanka is dealing with a fall in apparel order volumes as the coronavirus outbreak causes uncertainty among retailers and consumers.

The industry is already suffering, like many others, from a delay in raw materials supply from China, which is seeing many factories stand down operations.

Rehan Lakhany, chairman of Sri Lanka Apparels Exporters Association told local publication EconomyNext that its export markets of Italy and Germany are being impacted by the spread of the virus.

“So what’s scary is our orders are being cancelled or reduced, which is going to be even worse,” he said.

The garment sector is Sri Lanka’s largest export industry, accounting for nearly 40%.

Some factories are forecasting a 20-30% drop in orders from the next season onwards, starting in June, Lakhany said, adding he is concerned panic over the outbreak will stop consumers buying clothing.

“This is going to be a double impact, from one side we are getting hammered with sourcing raw materials and on the other hand, we have to face the reduction in order,” he told EconomyNext.

Lakhany added the raw material shortage is expected to continue until June, prompting some factories to close for about two to three weeks. Others may prolong the April new year holiday closures until fabric and raw materials arrive for them to start production.

The coronavirus epidemic has presented challenges for many countries dependent on fabrics and accessories from China, particularly Cambodia, Vietnam, Ethiopia, and Myanmar.

Earlier this week, Myanmar confirmed a factory closure due to a shortfall of raw materials from China, leaving over 1,000 employees out of work and Cambodian officials warned production would slow at 200 garment factories for the same reason.

Click here for additional insight on the coronavirus outbreak: Is coronavirus a threat to the clothing industry?