Thu, 2012-09-27 14:46 — editor
Colombo, 27 September, (Asiantribune.com):
As Sri Lanka’s exports under APTA grew more than three-fold by 2011’s
end, the country is suddenly realizing the importance of the promising sunrise
FMCG segment in the 2.5 Bn strong APTA markets led by APTA’s market giant,
China.
And in the aftermath of Pure Ceylon Tea international brand
initiative, Sri Lanka is now beginning to push Pure Ceylon Cinnamon and
other exports to China using a rare opening given on 24 September by Chinese
admin to its vast FMCG market, based on a Lankan Ministerial level request. “On
behalf of our exporters, I thank China’s SAIC for giving us new openings. In
the period of 2007-2011, our exports to APTA bloc grew by huge 360% to an estimated
$99 Mn. This outsize growth rate is highly promising. And in 2007-2011, Lanka’s
export’s to China under APTA alone grew by massive 700%” said Rishad
Bathiudeen, Minister of Industry and Commerce of Sri Lanka on 24 September.
Minister Bathiudeen announced this in the aftermath of a high level
official courtesy call made on him by Ms Gan Lin, a Vice Minister of the
powerful State registration and licensing authority of China, called as the
State Administration for Industry and Commerce of China (SAIC). Gan Lin’s SAIC
has more than 51 million business enterprises and individual businesses as well
as 436,800 foreign firms registered under it and operating within China. SIAC
is run by Minister Zhou Bohua, the direct appointee of none other than Wen
Jiabao, the Chinese Premier. Among SAIC’s well-known functions are handling of
international trademarks in China.
If Sri Lanka’s latest initiatives on China market become successful, Sri
Lanka will be able to effectively draw on China’s promising Fast moving Consumer
Goods (FMCG) segment, which is widely regarded as a sunrise industry. According
to the global market research giant Kantar World panel, China’s sunrise “urban
sector FMCG market” alone grew by 16.4% in Q1-2012 in comparison to Q1-2011.
The hypermarkets, supermarkets and convenience stores (collectively called as
‘modern trade’) are still the most important trade in China, taking 40% of the
value share in China’s FMCG market. Interestingly, both urban and rural
households also reported income growth in 2012 and the income per household was
higher than the inflation rate. Rural income growth stood at 17% (compared with
Q1-2011), while urban incomes rose by 13.8%.
The APTA bloc members are China, India, South Korea, Sri Lanka,
Bangladesh, and Laos. In 2010, Sri Lanka’s total exports to APTA bloc
(Bangladesh, China, India, Laos, and South Korea) stood at $64.5 Mn which
topped to $99Mn in 2011, according to the latest estimates provided by the
Department of Commerce of Sri Lanka. “It is significant that under APTA, Sri
Lanka receives export tariff concessions for 4795 export items from APTA bloc
of which, 1858 product items are from China –the highest tariff concession
giving country under APTA” Minister Bathiudeen informed Ms Ms Gan Lin (South
Korea closely follows with 1673 items, and India, 1055).
“In 2007-2011, Lanka’s export’s to China under APTA grew by 719%,
thereby China becoming the most promising destination when it comes to Sri
Lanka-APTA trade” Minister Bathiudeen revealed to Ms Gan Lin. “We thank you for
facilitating more and more Sri Lankan products to the Chinese market” Minister
Bathiudeen added. “As we move further into APTA, our situation will be improved
greatly by a level playing field. Therefore, as a start, we need support from
SAIC for a level playing field for our products in China’s market” Minister
Bathiudeen announced. Introducing Ceylon Cinnamon to Gan Lin, Minister
Bathiudeen said: “We are also very keen to increase reception to Pure Ceylon
Cinnamon in China’s market in the same way as Pure Ceylon Tea. Sri Lanka
will be thankful for marketing and distribution support for our Cinnamon and
other exports. We are looking to get Pure Ceylon Cinnamon trade mark in
China and to this end, we need SAIC’s assistance” Minister Bathiudeen requested.
“We like your products which are of high quality and we are looking for
more and more tea and rubber from Sri Lanka” said Ms Gan Lin apprising Minister
Bathiudeen. “We at SAIC are focused on market development of our own Chinese
products rather than foreign products. However, we see Sri Lanka as a small
exporter and from our point of view Sri Lanka’s volumes are no threat to China
market at all. Therefore we are looking at your official, Ministerial request
favourably and would consider assisting Sri Lanka in China markets” announced
Ms Gan Lin.
“Also my suggestion in this regard is that there is great potential for
each other and joint efforts from both parties can successfully exploit this
promise. We also invite Sri Lankan businesses to visit China more often and
explore Chinese consumer needs closely so that Sri Lankan suppliers can get a
better idea as to what they can move and what they cannot in the Chinese
marketplace” Gan Lin stressed. Though Sri Lanka’s exports to Bangladesh under
APTA also grew massively from 2007-2011, it is due to trading of a single
product, namely copra.
However exports to China under APTA, are a much more diversified basket,
and holds bigger potential. The third round of APTA talks in 2006 resulted in
successful tariff concessions which were substantial under APTA (entered into
force September 2006) and offered a maximum of 50% Margin of Preference on
existing tariffs among the member countries, includes substantial tariff
concessions and a wider coverage of products.
The Department of Commerce revealed that at the end of the Third Round,
the APTA bloc had exchanged concessions on 4,270 products plus 587 products
offered exclusively to Least Developed Countries (LDC), a marked increase from
the 1,721 products plus 112 products prior to September 2006. Among Sri Lanka’s
major exports to APTA are spices (pepper, nutmeg, mace) cashew, essential oils,
natural graphite, activate carbon, rubber products (tyres, gloves, mats, rings)
floor tiles, ceramic, tableware/kitchenware, glassware, semi-precious stones,
gem and jewellery, stuffed toys, brooms and brushes, cut flowers, footwear,
biscuits, chocolates, apparel, fresh fruits and juices, wooden furniture,
mattress, electric lamps, ornamental fish, fresh/frozen fish and fishery products.
- Asian Tribune -
