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The agriculture sector in Sri Lanka, is still the mainstay of the country's economic powerhouse, with significant performance from commodities such as tea, coconut, rubber, cinnamon, pepper, pineapple, tamarind and yams. The total revenue earned in 2001 was Rs. 78 billion.

Most attention is being focused on plantation crops, spices and the staple food crop, paddy. Introduction of various assistance schemes, technologies aimed at increasing production as well as farmer income, were mainly centered on these crops, due to their importance in terms of foreign exchange earning (93%).

Increasing global competition has opened the way to diversify Sri Lanka's non-traditional agriculture sector aiming at export markets. In view of this fruits, vegetables and yam (FYM) of Sri Lanka have been identified as a priority area for development and promotion in the overseas markets. The sector has earned Rs. 1.80 billion during the year 2001.

Although the earnings are not significant compared to the volume of national agriculture produce exports the sector has guided towards the systems to increase productivity, improve quality, cut down cost of production, use of modern post harvest technology, aiming at exports and catering to different market segments locally.

The main products exported from Sri Lanka are fresh yams (manioc, kiriala, king yam) fresh vegetables, (green chilies, snakegourd, karawila, capsicum, leeks, tomato, beans, cabbage and assorted ranger) fresh fruits (pineapple, avocado, seasonal fruits and assorted fruits) processed fruits, vegetables and yams (gherkins, preserves, chutneys, fruit juices, mixed products).

Sri Lanka produces a wide range of root crops for consumption purposes. Manioc, sweet potato, kiriala (Taro), purple yam, keedaran, innala and aquatic roots such as lotus root, kohila, are widely available in the local market.

Sri Lanka's annual total production of root crops is estimated at 336,000 tons (Census and Statistics). Few types of root crops such as manioc, kirala, king yam and innala are exported from Sri Lanka mainly for the consumption of expatriate consumers in the Gulf and other developed markets. Export of manioc, kiriala, king am and other root crops have earned Rs. 80.0 million in the year 2001.

Export statistics

The export statistics for the last five years indicate the demand in existing markets has reached the highest point mainly in the leading marketplace. However, the demand for king (purple) yam, keedaran are increasing among the ethnic consumers in developed markets such as Canada, Europe and Australia, where fairly large number of Sri Lankans are living.

The annual estimated vegetable production in Sri Lanka is 650,000 mt. (Census and Statistics). Over 40 local and exotic varieties are cultivated in different climatic regions. The main vegetables cultivated in the upcountry region are cabbage, beans, leeks, tomato, carrot, beet, lettuce, knolkhol and capsicum while in the low country the main vegetables are brinjals, pumpkin, snakegourd, bittergourd, radish, cucumbers, ladies fingers, okra and leafy vegetables.

A majority of the vegetable varieties are available throughout the year. The bulk of these vegetables are consumed locally. A part of the produce is lost due to poor crop management, poor post harvest handling. Less than 1% of the total production is exported from Sri Lanka.

The major destinations are the Gulf countries, Maldive Islands for fresh vegetables and Europe and developed markets for processed vegetables.

The demand for fresh vegetables in the Gulf and Maldives are mainly an assortment which consists of more than 15 items in each consignment. Since it is catered mainly to a limited consumer market which is for Asian expatriates in the Gulf and the tourist resorts in Maldive Islands, the importer always insists on air shipment of 500 to 1,000 kg at a time and conveyed to exporter daily or every other day.

Items demanded or requested are not consistent but it is changing each day. Apart from the assorted range few varieties of vegetables such as leeks, snkegourd, bittergourd, cabbage, tomato, beans, capsicum, green chilies are largely contributing to the total volume.

Export statistics indicate that vegetable exports to main destinations (Gulf and Maldive Islands) have levelled off and less room for expansion. Considering this situation the exporters were now making all efforts to consolidate their market share which is threatened by other competitors.

Fruit industry

The fruit industry in Sri Lanka is still in the hands of small farmers or home garden allotments where crop management, harvesting, post harvest handling need to improve a lot. More than 50 fruit varieties are being grown in Sri Lanka. The main varieties cultivated are Banana, Mango, Pineapple, Papaya, Passion fruit, avacado and rambuttan etc. Estimated annual production of fruits in Sri Lanka is 625,000 mt. (Census and Statistics) of which more than 70% is banana.

Large volumes of the national fruit harvest go waste due to poor crop management and poor post-harvest handling. Also the local consumption is not very significant due to artificially high price and poor quality of produce in the market.

Approximately 08% of the total estimated production of fruit are being exported annually to destinations such as the Gulf, Maldive Islands and other markets.

The main fruits exported from Sri Lanka are Pinepple and tamarind. Pineapple exports have reached a volume of 3,000 mt in the year 2001. Tamarind exports have shown a fluctuating pattern due to irregular availability of supply of fruits for exporters.

A range of fruit varieties is exported inland assortment and the volumes varies depending on the availability, quality and price.

The processing industry in Sri Lanka is mainly concentrated in producing jams, juices, cordials, pickles, chutneys, ready to serve drinks, preserves, brined/vinegerd vegetables, dehydrated products. Most of the manufacturers are small-scale operators and the quality of produce is not up to the satisfaction of leading importers of food products in international markets.

Gherkin in brine and gherkin in vinegar are the major revenue sources in processed food export sector during the period 1992 to 1995. Since then the exports declined due to the competition in the world market and shifting of the industry to Indian soils.

Products such as passion fruit juice, mixed tropical fruit juice, brined vegetables in cans, dehydrated fruits (pineapple, mango) dehydrated vegetables (1k), preserved fruit (mango, pinepple and papaya) significantly contributed for the value of the processed food exports from Sri Lanka.

For more than two decades the fruit, vegetable and yam (FVY) export sector has expanded, and consolidated market links with importers in the Gulf and Maldives, mainly for fresh FVY while the processed sector has linked to importers in Europe and other developed destinations.

However, according to export statistics the existing major markets have shown a downward trend in terms of volumes as well as value. This indicates the market is highly competitive and also the import volumes to these countries are not growing due to declining purchasing power of expatriate population, reduction in number of expatriate labour, low wages, investment in modern agriculture production in the Gulf and Maldives.

Open economy

With the open economy climate developing throughout the world more and more people have been made aware of market opportunities available for FVY and established trading/business contacts through direct linkages, tourism, employment and education creating, a competition for existing exporters in the overseas markets. In the circumstances the importers always tend to change supply sources (exporters) even for small price difference.

This situation has caused loss of revenue from FVY exports and the exporters were concentrating more for their survival. In view of this it is necessary to look for the new market opportunities where Sri Lanka FVY can be marketed.

The major part of world trade in FVY is centered in developed countries such as EU, USA and Japan which collectively accounted for over 80% of the world imports High quality produce in large volumes are regularly demanded in these markets where Sri Lankan suppliers have not yet geared to cater.

However, within these developed markets there are number of ethnic groups living among the main consumer segments and have created an awareness on multi ethnic food varieties by family links, tasting of different foods, snacking, health food concern.

France, a leading country promoting ethnic food products, has confirmed that the sector has gained an annual growth rate of 20% in the EU food market. It is noted that in the year 2001 the EU's ethnic food sales reached the US$ 1 billion mark of which over 50% is contributed by UK and France. Significant share, that is, 17.5% of the ethnic and speciality food market in EU is captured by Indian specialities.

Therefore, it is high time Sri Lankan exporters explored opportunities to market Sri Lankan FVY specially to Sri Lankans.

More than two million Sri Lankans are estimated to be living in Europe, Australia, Canada USA and Cyprus which areas we have not explored to the full.

The products such as assorted vegetable (specially yams King yam, Innala, Keedaram, Lotus roots, Kohila etc.) tropical fruits such as mangosteen, guava, ambarella, jelly nut (king coconut), anoda and speciality banana, could be promoted by way of fresh and processed products.

The expansion of multi-ethnic population in the developed countries has fuelled the rapid increase of ethnic food stores in EU countries. Development of ethnic food storage in developed markets is an indication of the availability of market opportunities for Sri Lankan food products specially to cater to Sri Lankans living overseas.

However, some countries do not permit the import of fresh products from Sri Lanka but dried, canned or pre-cooked vegetables, fruit and yams are allowed to be imported if the product meets the standards of those countries.

Therefore, in order to explore the new market opportunities it is necessary to implement integrated product/market development programs, specially aiming at Sri Lankan population in overseas destinations.

Source: Sri Lanka Exporter

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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