This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/11/2017
The agriculture sector contributes about 7.5 percent to the national GDP out of which fisheries sector contributes around 1.4 percent and livestock sector accounted for 0.8 percent. Over 30 percent of Sri Lankans are employed in the agricultural sector. Sri Lanka is a fertile tropical land with the potential for the cultivation and processing of a variety of crops.
Sri Lanka’s primary food crop is rice. Rice is cultivated during two seasons. Tea is cultivated in the central highlands and is a major source of foreign exchange. Vegetables, fruits and oilseed crops are also cultivated in the country. One of President Sirisena’s top priorities is to increase productivity in the agriculture sector. There has been low adoption of mechanization in farming. The president wants to increase mechanization and grow higher value cash crops such as fruit, flowers, and other export oriented crops.
Sri Lanka imports a variety of agricultural products and food including wheat, lentils, sugar, fruits, milk and milk products. Further, Sri Lanka is emerging as an important market for international business and tourism. A variety of upscale international and local hotels, resorts, and restaurants have opened in Colombo, Kandy, Galle, and around major tourist sites. They offer a good platform for introducing new-to-market imported food products. Additionally, upscale retailers are creating avenues for imported foods and beverages. Sri Lanka also imports animal feed. Total agriculture, food and beverage imports were $1.9 billion in 2017. and U.S. suppliers have significant opportunities in this market.
Leading Sub-Sectors and Opportunities
Wheat Grain: Sri Lanka imported approximately 948,000 metric tons of wheat in 2016. All imports were commercial transactions. Most wheat imports were of Canadian origin; U.S. wheat exports to Sri Lanka were estimated at around $12 million in 2016. Prima Ceylon Ltd, a Singapore-based wheat miller, is the largest producer of wheat flour in the country. The flour produced by Prima is for domestic consumption, as well as for exports. The company operates one of the largest flour mills in the world in the eastern town of Trincomalee; A second mill, owned by a company from the UAE, was commissioned in 2008. The main competitors in the wheat-supply business are Canada, India, and Australia.
Lentils: Sri Lanka is one of the major importers of red lentils with annual imports estimated at approximately $140 million. India is a main exporter of lentils to Sri Lanka.  U.S. suppliers have significant opportunities in this market if a competitive pricing structure can be developed with a view to long-term selling in the market.  Many local buyers have expressed an interest in working with U.S. suppliers due to the superior quality of U.S. lentils.
Animal feed/Corn: Currently, some 150,000 metric tons of corn are being imported to the country annually to supplement the local production, which is only 30,000 – 40,000 metric tons. Corn is one of the main ingredients used in the animal feed industry, which formulates around 500,000 metric tons of animal feed annually.  Sri Lanka spends approximately $68 million annually to import animal feed. The United States exported approximately $44 million of animal feed to Sri Lanka in 2016. GM restrictions are not applicable for animal feed.
Cotton, Yarn, and Fabric: Sri Lanka imports approximately $208 million of cotton (raw cotton, yarn, and fabric) annually. Imports of cotton, yarn and fabric from the United States were about $1.3 million U.S. cotton suppliers have substantial opportunities to supply to Sri Lanka's export-orientated apparel sector. Hong Kong, India, Indonesia, and South Korea are the current major cotton suppliers to Sri Lanka.
Soya bean: U.S. soy bean exports to Sri Lanka were estimated at $17 million in 2016.
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Sri Lanka Agribusiness Trade Development and Promotion