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Serving Sri Lanka

This web log is a news and views blog. The primary aim is to provide an avenue for the expression and collection of ideas on sustainable, fair, and just, grassroot level development. Some of the topics that the blog will specifically address are: poverty reduction, rural development, educational issues, social empowerment, post-Tsunami relief and reconstruction, livelihood development, environmental conservation and bio-diversity. 

Tuesday, October 04, 2005

Unrealistic rates hit seafood exports

Sunday Observer: 25/09/2005" by Elmo Leonard

Sri Lanka's seafood exports, which were thriving till recent months, making use of supplies brought in by foreign ships, and the scrapping of GSP - General Sales Preference to the EU, following the tsunami, is now finding supplies dwindling.

The reason: the authorities are now charging unrealistic rates from foreign vessels calling at local harbours, the Seafood Exporters' Association of Sri Lanka (SEASL) said.

Fish catch landed in the Mutwal Harbour has declined from 7,000 tonnes in 2002 to an estimated 2,000 tonnes for 2005, according to Ceylon Fisheries Harbour Corporation data.

Among many recommendations SEASL made to the Ministry of Fisheries (MF) is the removal of most levies charged on foreign vessels which land their catch here, and motivation to unload in Colombo, not as a transit port but a port with facilities for value addition and reexports.

Sri Lanka's exports of tuna is mainly to the EU, USA and Japan; processed fish in value added form is totally exported to the EU. Foreign fishing vessels contracted under BOI and those calling here, continued to feed the island's fish exports, notwithstanding that 50 percent of the island's fishing fleet was lost to the tsunami.

The Maldives, which was Sri Lanka's largest supplier, has in recent months opened five privately owned tuna processing plants, in addition to the state processing unit MIFCO, all capable of meeting EU and US export standard specifications.

The Maldives, which for long enjoys duty free access to the EU, for the first five months of this year exported 669.3 tonnes of tuna (197 tonnes in May) in comparison to 251 tonnes from January to end-May 2004, according to Infofish, Malaysia.

The Maldives, Thailand, Malaysia, Indonesia and Singapore, in the region continue to offer concessions to lure foreign catch, while improving their export processing activities.

While Sri Lanka is within the main tuna migratory routes and Malaysia nowhere near, $180 million has been invested to upgrade the Penang Port. Singapore which has no fishing grounds or EEZ is a major exporter of frozen tuna and swordfish products to USA. In 2003 Singapore exported 67,782 tonnes of fish filets and in 2004, 92,923 tonnes to the US, according to international statistics.

The BOI encourages foreign companies which fish outside Sri Lanka's EEZ to land fish here, by offering tax holidays, fiscal incentives and exchange control exemptions, A BOI official said.

The Maldivian government charges a royalty of $50 per tonne of fish landed and a licence fee for catching fish within her EEZ. Singapore does not levy any charges. Sri Lanka does not charge royalty or a licence fee as no foreign vessel is allowed to fish within its EEZ.

Among the representations made by SEASL to the authorities are the gradual levies charged by the Ceylon Fisheries Harbours Corporation (CFHC) and the Ceylon Fisheries Corporation (CFC) is driving out foreign fish companies to ports outside Sri Lanka, SEASL president, Roshan Fernando said.

CFC charges US cents 20 per kilo for vessels landing in Mutwal, Colombo, while the Maldives charges $50 per tonne (US 0.05 per kilo). Twenty-five percent of the catch which is exportable to the EU should be sold to the CFC at approximately Rs 200 per kilo below current market price.

No such practices are carried out by other tuna fish exporting countries, a senior director of the Ministry of Fisheries said. Among other charges, CFA intends charging Rs 10 per kilo from October 2005, now put on hold.

On the contrary, with the liberalisation of charges levied, Sri Lanka could earn much foreign exchange from the handling of fish, supply of fuel and water, processing of fish, exports, and a host of other funds coming into the country, the Fisheries Ministry director said.

Already, 100,000 persons of both sexes are employed in the fish processing and export industry and some of them would loose their jobs if immediate action is not taken to rectify the matter, Fernando said.

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