RIYADH, 4 February 2008 — Sri Lanka, well known as the pearl of the east pearl has been famous for its spices and gem trade. Its ties with the Arab world run back to centuries. The Arabs called the island Serendib.
History reveals that early Arab traders who visited the island were given shelter and adequate protection to carry out their businesses by the Sinhalese kings from the onslaught of the Portuguese who were there trade rivals. This indicates that trade ties between Sri Lanka and the Arab world is not a reason to development.
The ties between the Arab world came to fruition with the establishment of the Non-Align Movement of which Egypt took a pioneering leadership. It was this movement and Sri Lanka’s positive attitude toward the Arab cause, which cemented the relationship between Sri Lanka and Saudi Arabia in the recent past.
The recent ties properly originated when the two countries agreed to establish diplomatic relations and exchange diplomatic representation at ambassadorial level with effect from 1984; thenceforth ties gained momentum, which culminated in the establishment of residence mission in both countries. Delegations led by ministers have frequently taken place between the two countries covering political, economic and cultural aspects.
Sri Lanka is famous globally for its high quality tea. It is the world’s largest tea exporter, which supplies about 60 percent of the tea consumed in Saudi Arabia. More than 25 percent of the values of its exports are through this vital item of exports. It was the main item of export from Sri Lanka to Saudi Arabia in the nineties. Sri Lanka virtually dominated Saudi Arabian tea market. Most of the Saudi consumers look for lion logo, which contains pure Ceylon tea. Sri Lanka tea exporters have been successful in establishing strong brand names such as Rabea, Lord, Al Wazah, Unicom, Dilmah, Stassen and Sultany in the Saudi Arabian market.
Some of the tea manufacturing companies maintain the highest standards in producing quality using the state-of-the-art technology. Mackwoods fine tea is produced directly from thousands of acres of its estate on the hills. It is one of the few companies in the world, which provides single estate unblended teas in a bag form.
The other major export to Saudi Arabia is desiccated coconuts, which stood at Rs. 308 million in 2006, showing a two percent increase over the previous year. The other export items include garments, vegetables, brooms, and coconut milk powder, natural or cultured pearls, stones, etc.
The demand will remain mainly for food and agricultural items. “Ceylon tea will continue to be our major export although the intake has shown a declining trend as soft drinks are becoming popular in Saudi Arabia.” Among other items in demand, will be “ethnic, dry food items” such as small quantities of country rice, rice flour, pickles and chutneys, dry fish, kitul treacle (juice extracted from the kitul palm) and canned items for which there will always be a demand from the Sri Lankan expatriates. Among other agricultural products, indoor/outdoor plants and foliage and cut flowers have become important.
Garments seem to offer the greatest potential among the nonagricultural items. “We should consider readymade garments as one of the priority areas for promotion in the Saudi market since Sri Lanka has succeeded in making her present felt in the United States and Europe. Some US and UK companies such as Mother Care, River Island, Next, BHS, Oasis have already opened their retail outlets in the Kingdom.” Hence, there could be prospects for Sri Lanka’s readymade garments as our products are considered as being of high quality,
Due to the construction boom in the country, there is an emerging demand for building materials in Saudi Arabia. Ceramic floor and wall tiles, granite, marble and electrical items such as plugs, switches and sockets are some of the building materials that could be supplied by Sri Lankan exporters.
In addition to the above, green tea, spices, surgical gloves, gems and costume jewelry, greenery, treated wood, fresh fruits and vegetables, frozen food products also have a potential in this emerging market.
Sri Lanka’s imports, which was at Rs. 14,899 million in 2002, increased to Rs. 17,000 million in 2006. Petroleum oil & oils obtained from bituminous minerals accounted more than 50 percent of the total imports from Saudi Arabia. The other major imports were polyethylene, kerosene, diesel, pre-fabricated buildings, urea and copper wire etc in 2006.
Currently, petroleum and related products accounts for around 65-70 percent of Saudi exports to Sri Lanka. During the last few years there has been a growth in non-oil exports such as copper wires, building structures, prefabricated buildings, glass and glassware, aluminum waste and scrap, organic and inorganic chemicals, polypropylene and poly propylene to Sri Lanka.
A noteworthy feature in the trade relations between two countries is the trade turnover has been increasing steadily. Though the trade balance was in favor of Sri Lanka at the beginning, the signing of an agreement between the two countries in 1993/1994 to increase the export of crude oil to Sri Lanka, turned the trade balance in favor of Saudi Arabia which continuous same status.
Given the current economic boom of the Kingdom, the embassy hopes to work with renewed vigor to promote economic cooperation with Saudi Arabia particularly in the fields of trade, tourism and investment.
Plans are afoot to organize programs in corporation with SriLankan Airlines to promote the island as an attractive tourist destination. The Saudi tourists are heavy spenders and they look for South Asian destinations for their holidays. Sri Lanka, the resplendent isle, a has wide range of holiday resorts to offer for Saudi tourists. But this sector has not been properly harnessed.
In this respect tourist brochures on Sri Lanka were launched last May to promote the island as a family destination for Saudis and expatriates in the Kingdom. The brochures highlighting the popular resorts for family holidays and offers of tailor-made packages for Saudi travelers, was published by Unique Choice International (UCI), a leading tour operator in the Kingdom. Recently, UCI was appointed General Sales Agents for SriLankan Holidays of the island’s national carrier, Sri Lankan Airlines.
Following the recent liberalization of the insurance business in the Kingdom Sri Lankan insurance companies are in a position to enter into join venture partnership with Saudi business group.
Amana Takaful Limited, which pioneered the Takaful system in Sri Lanka, is currently planning to stretch its wings to countries such as Dubai, Kuwait and Saudi Arabia. The Colombo-based company was established with strong support from Takaful Malaysia.
