Compared to the last fiscal year, the Joint Apparel Association Forum (JAAF) foresees an immediate contraction of $1.5 billion in Sri Lankan apparel exports during the 3-month period ending in June.
The forum also expects further demand contractions that could result in reduction of apparel exports by an additional 30 – 40% after June. The situation further compounded when the effects of the current closure with no clear date of resumption are factored in.
The impact of the curfew may result in trade shift due to countries like Vietnam, Cambodia, and Indonesia, Lanka’s main competitors, being completely operational.
While most companies have pledged to pay March salaries, a vast majority of the industry will struggle to pay salaries from the end of April onwards due to the factors outlined above that have led to the evisceration of the industry’s working capital.