Sri Lanka – Not a Wheat Producer, Yet to Export 120,000 Tons
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Recently Sri Lankan Government began to allow Wheat flour imports. However, the imported Wheat flour quantity remains minimal compared to the import volume of Wheat grain for flour milling. FAS Colombo forecasts Sri Lanka’s MY 2023/2024 (July-June) Wheat total consumption at 1.18 MMT, up by 54,000 MT, from Post’s MY 2022/2023 estimate of 1.12 MMT. The increase is seen as a result of the gradual recovery from the economic crisis of 2021/22, with more foreign exchange set to become available for financing Wheat imports with the IMF bailout.
The renewed influx of foreign tourists in late 2022 will also fuel increased consumption as these tend to eat flour-based products rather than rice. During the latter part of MY2021/2022 and into the early part of MY 2022/2023, Wheat consumption was affected by the high price of Wheat flour resulting from the lack of foreign currency availability, the rapid depreciation of the Sri Lankan rupee, and increased international prices. With higher Wheat flour prices taking hold, consumers have reduced their consumption, turning to alternative sources of carbohydrates such as those derived from root flour and even jackfruit. At the national level, the average monthly Wheat flour consumption has been reported at 1.8 kg/month per household in Sri Lanka (in 2019).
The highest consumption of Wheat flour per household per month is reported from the estate plantation sector and among the districts in Killinochchi, Mullaitivu, Vavuniya, Jaffna, and Nuwara Eliya. The average monthly household consumption quantity of bread is reported as 3.5 kg/month. When comparing the sectors, the households in the urban sector consume larger quantities of bread, about 5 kg/month per household.
Wheat Trade in Sri Lanka
Wheat and Wheat flour account for the largest share of Sri Lanka’s cereal imports. Large quantities of rice and corn (maize) are only imported when local production is insufficient to cover domestic needs.16 FAS Colombo forecasts Sri Lanka’s MY 2023/2024 imports at 1.4 MMT, up by 200,000 MT, from Post’s MY 2022/2023 estimated volume of 1.2 MMT. Generally, Sri Lanka’s leading Wheat suppliers include Canada, Russia, Australia, Pakistan, India, and Romania. According to AgFlow data, Sri Lanka imported 0.2 million tons of Wheat from Ukraine in Jan-March 2023, followed by Australia (83,398 tons) and Romania (55,000 tons). Due to the foreign exchange crisis, in MY 2021/2022, nearly the entire stock of Wheat was imported from India, facilitated by a $4 billion Indian credit line.
The importation of Wheat flour for animal feed is under import control licenses and requires prior approval from the Department of Animal Production and Health. Post is revising its earlier MY 2021/2022 imports volume from 1.032 MMT to 1.102 MMT to reflect actual Wheat import volumes better. Current import requirements disallow U.S.-origin feed Wheat. Entry requirements are highly restrictive for de-husked, bulk Wheat imported for animal feed production. Unlike the case of Wheat imports for human consumption, where the two millers’ production locations are easily verifiable by authorities, small- to medium-sized feed mills are scattered throughout the county and often lack adequate infrastructure (i.e., including silos).
FAS Colombo forecasts Sri Lanka’s MY 2023/2024 Wheat product exports at about 120,000 MT, up by 30,000 MT compared to Post’s MY 2022/2023 estimated quantity of 90,000 MT. Compared to previous years, the higher export volume going forward is premised on the increase in Wheat imports for flour milling resulting from access to adequate forex currency available for financing imports. Post is amending its forecasted MY 2021/2022 export volume from 15,000 MT to 101,000 MT. The main export destinations include the Maldives, Thailand, Malaysia, and Singapore.
Other sources: USDA
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