Friday Mar 27, 2026
Friday Mar 27, 2026
Friday, 27 March 2026 04:54 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
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| EDB Chairman Mangala Wijesinghe |
Export Development Board (EDB) Chairman Mangala Wijesinghe yesterday warned that Sri Lanka’s exports are likely to contract by between 5% and 8% in March, as escalating geopolitical tensions in the Middle East disrupt trade flows and logistics.
Addressing the media, Wijesinghe said the region remains a critical export destination, accounting for around 8% of Sri Lanka’s total exports.
Of that, the United Arab Emirates (UAE) absorbs 32%, followed by Iraq with 18% and Saudi Arabia with 12%, collectively making up nearly 80% of exports to the Middle East.
He noted that Sri Lanka exported goods worth $ 1.08 billion to the region in 2025, with Ceylon Tea accounting for more than half of shipments, underscoring the sector’s vulnerability to regional instability.
Wijesinghe explained that beyond direct exports, a significant share of shipments to key markets such as the US, European Union (EU), and the UK rely on transit routes through Middle Eastern hubs. Disruptions to airspace, shipping routes, and rising fuel costs have therefore created knock-on effects across the entire export network.
“Exporters initially faced severe challenges amidst the suddenly soared freight and insurance costs, delays, and raw material constraints. However, the sector has since adapted and resumed operations, albeit at a slower pace,” Wijesinghe said, adding that the demand for goods remains strong.
He pointed out that export growth, which was initially projected at around 10% monthly, has already moderated to 7.5% in February and is expected to fall further to around 5% in March due to ongoing logistical constraints.
Despite the short-term slowdown, the EDB remains cautiously optimistic. Wijesinghe said they hope that exports will continue to improve steadily by around May and June.
He outlined that contingency measures are already in place to mitigate the impact, including efforts to diversify export markets and expand product offerings.
“We are looking at alternative markets and products to minimise any gaps and ensure that overall export targets are not significantly affected,” he said.
He also revealed that discussions are ongoing with the Finance Ministry to delay the phased implementation of cess removals.
Earlier this month, the Cabinet of Ministers approved the removal of cess and non-tariff barriers on 2,634 imported goods in stages from 2026 to 2028, a move aimed at easing cost pressures, improving supply chain efficiency, and enhancing competitiveness.
However, he said the EDB is now seeking flexibility in the rollout amid current global uncertainties to safeguard the export sector.
Looking ahead, Wijesinghe highlighted emerging opportunities, particularly through the proposed Sri Lanka-Japan economic corridor, which he said could open new avenues to expand “Made in Sri Lanka” products into regional markets such as India, the Middle East, and Africa.
Acknowledging the challenges posed by the Middle East crisis, he stressed that proactive measures and market diversification strategies would be key to sustaining export momentum and safeguarding Sri Lanka’s trade performance in the months ahead.\
WTO says worst trade disruption in 80 years
The global trading system is experiencing the “worst disruptions in the past 80 years,” World Trade Organisation (WTO) Chief Ngozi Okonjo-Iweala warned at the opening of the WTO Ministerial Conference.
“The world order and the multilateral system we used to know has irrevocably changed,” she said. “We cannot deny the scale of the problems confronting the world today.”
The Organisation for Economic Co-operation and Development has cut its eurozone growth outlook and forecast higher inflation for 2026 after the Middle East war caused energy prices to skyrocket.
