Sri Lanka working Indonesia to open flour doors wider

Friday, 6 December 2013 00:10 - - {{hitsCtrl.values.hits}}

Lanka second largest wheat flour supplier to Indonesia
Bilateral chats will continue on flour: Indonesian Minister Krisnamurthy
Lankan share in Indonesian wheat flour rises to 32%
Trade increases by 9% to $ 505.35 m

As Sri Lanka’s wheat flour supplies to Indonesia jumped, Indonesia said it was compelled to introduce safeguards to the country’s domestic wheat flour industry-but the door is not closed after all. “Our domestic wheat flour industry has been seriously affected by foreign supplies over the recent years. We are aware of the importance of wheat flour industry in Sri Lanka and therefore consultations are continuing between the two governments to address this issue in a mutually satisfactory manner,” said Indonesian vice Minister for Trade Bayu Krisnamurthy on 3 December in Bali. Minister Krisnamurthy was addressing the Sri Lankan Minister of Industry and Commerce Rishad Bathiudeen in Bali, Indonesia, where he was leading the Lankan delegation to the 9th Sessions of the WTO Ministerial Conference which includes senior officials from the Department of Commerce and the Permanent Mission of Sri Lanka to the WTO, Geneva. Second place Though Australia, Canada and the US lead the list of wheat grain suppliers to Indonesia, when it comes to milled wheat flour imports to Indonesia, Sri Lanka ranks second just below Turkey amongst wheat flour suppliers. In 2010, Sri Lanka was the second largest foreign supplier of wheat flour to Indonesia with 166,919 metric tons, providing one fifth of wheat flour imports to Indonesia in Y2010 while Turkey took the top slot at 454,768 metric tons, supplying 59% of wheat flour imports to Indonesia. In the first half of 2011, Sri Lanka’s wheat flour share in Indonesia jumped to 32%. Wheat flour milled in Sri Lanka consists of a considerable amount of Lanka’s exports to Indonesia. In 2012, more than 80% of Sri Lanka’s $ 87 million exports to Indonesia consisted of wheat flour. Success story Addressing Indonesian Vice Minister Krisnamurthy, Minister Bathiudeen stressed that both parties working together, benefits bilateral trade, and added: “Sri Lanka’s presence in the Indonesian wheat flour market is a success story, which demonstrates Sri Lanka’s efforts in diversifying both its export basket and market base. “In this context, safeguard measures, recently imposed by Indonesia on wheat flour imports have affected a number of countries, including Turkey, Sri Lanka and Australia, which rank as the major suppliers of this commodity to Indonesia. We request Indonesia to reconsider this decision, since Sri Lanka’s wheat flour industry, which is located in the Eastern Province of the country, made a significant contribution to the economic welfare of the people in that region, who were also affected by the war.” Safeguards Vice Minister Krisnamurthy, responding to Minister Bathiudeen, acknowledged that his country was compelled to introduce certain safeguards to provide some protection to Indonesia’s domestic wheat flour industry, which had been seriously affected by foreign supplies over the recent years. “Our domestic wheat flour industry has been seriously affected by foreign supplies over the recent years. We are aware of the importance of wheat flour industry in Sri Lanka and, therefore, consultations were continuing between the two governments to address this issue in a mutually satisfactory manner. We also see impressive growth achieved by Sri Lanka since the end of the war. There are some Indonesian companies which have shown a keen interest in investing in the tourism industry in Sri Lanka.” Welcome interest Minister Bathiudeen, responding to Vice Minister Krisnamurthy said: “We welcome your investors’ interest in Sri Lanka. My Ministry officials and I will extend our fullest support and directions whenever you need so that these ideas become a reality.” The Wheat flour industry in Sri Lanka immediately welcomed Minister Bathiudeen’s initiative in Bali. An industry source from a Lankan wheat flour player said: “This is very good. We welcome an approach of continuing dialogue so that a win-win is the result-in that, both sides could benefit in terms of not only on a certain product category but in overall trade improvement.” Cordial relations During their exchange of views on their bilateral trade relations, the two Ministers recalled the cordial relations Sri Lanka and Indonesia have been enjoying over many years. Both Ministers agreed that the volume of bilateral trade has been growing considerably, with year 2012 reporting over $ 500 million bilateral trade. Sri Lanka’s trade with Indonesia totalled $ 505.4 million in 2012, with Sri Lanka exporting $ 87 million and importing $ 418.4 million. Sri Lanka’s main exports to Indonesia include wheat flour, apparel, tobacco, tea and tyres, while primarily imports coal, chemical products, cement, tobacco products and palm oil from Indonesia.