Foreign buyers cancel export orders owing to current crisis
At least four export companies are losing orders this year unfortunately thanks to the economic meltdown in the country, partly due to the fuel crisis.
A manufacturing company CEO who did not wish to be identified told the Business Times on Thursday that two American buyers have cancelled orders. “These were confirmed orders and early this year we bought and pre stocked certain raw materials that we needed to manufacture these items. Now we are sitting ducks,” he said.
The Prime Minister’s office said in a statement a government-ordered petrol shipment would arrive on July 22, while Lanka IOC, a unit of Indian Oil Corporation, is expecting a shipment of petrol and diesel around July 13.
A second exporter of a medium sized firm explained that the fuel crisis was the last straw for these buyers. He said there were many reasons as to why buyers are cancelling orders, among which the uncertainty over whether deadlines would be met.
“We have had a couple of our buyers cancelling orders over the last month. We will have an issue towards the year end, but we are trying to find a way out before that. Otherwise, we will be struggling to pay employee salaries,” he added.
It was also noted that certain other small and medium scale businesses into exports are also in a crisis owing to the fuel crisis.
He added that these firms are already running non-performing loans in their respective banks and the situation is already getting worse for them.
A third exporter was very vocal in criticising the recent statement made by Prime Minister Ranil Wickremesinghe in parliament, saying there is “a far more serious situation” than the shortages alone, and he was warning of “a possible fall to rock bottom”.
“Our economy has completely collapsed,” he said on Wednesday. The third exporter pointed out that such statements catch international media attention which is very detrimental to the export industry . “These statements while true do nothing for our industries. The politicians have a greater responsibility to industries. They need to do something about it rather than discuss the severity of it.” He added that so far this year three export orders of his were cancelled.
A fourth exporter said that one of his orders were cancelled last week and he is expecting more cancellations in the weeks ahead.
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