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Sri Lanka’s apparel and textile exports grew 7.96% in May 2026 to US$394.14 million, the industry’s best single-month performance so far this year and a sign that demand from key markets is beginning to firm up after a difficult start to the year.
The United States led the gain, with shipments rising 15.36% to US$149.96 million. Exports to markets outside the industry’s traditional three core destinations also grew strongly, up 14.61% to US$70.67 million, while the UK posted modest growth of 0.87%. The EU was the only market to soften, dipping 0.3% to US$121.35 million.
The US rebound lands at a pivotal moment for the sector. Sri Lanka is currently engaging with the US Trade Representative the 301 investigation on the prohibition of importation of goods manufactures with forced labour, that will determine an additional tariff of either 10% or 12.5%. The report published in June places Sri Lanka among the 46 countries that are due to have a 12.5% tariff imposed on them. A number of Sri Lanka’s competitor countries (incl. Bangladesh, Cambodia Pakistan and Indonesia) have been given a lower tariff of 10% on account of their already having taken some action with regard to the import of goods manufactured from forced labour. A public hearing on the proposal is set for 7 July in Washington, and industry bodies have until 22 June to request a hearing slot making the coming weeks a critical window for Sri Lanka to make its case.
This is precisely where the policy conversation and the trade numbers intersect. May’s US strength shows that, even under tariff pressure, Sri Lanka remains a market US buyers are actively sourcing from a reflection of the country’s long-standing reputation for quality, compliance and reliability. The opportunity now is to convert that underlying buyer confidence into a more durable trading position by securing a fairer tariff outcome.
The Joint Apparel Association Forum (JAAF) has consistently lobbied for tariffs to be in line with competitor countries.
A successful outcome for Sri Lanka in the current process would help convert May’s encouraging signal into sustained growth.
The cumulative picture for the year still reflects the headwinds the industry has been navigating. Exports for January–May 2026 stand at US$1,926.85 million, down 4.68% on the same period last year, with the US, EU and UK all in negative territory cumulatively. But May’s performance suggests the industry has room to recover ground in the second half of the year, particularly if the tariff question is resolved favourably and buyer confidence continues to build.
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The Joint Apparel Association Forum (JAAF) is calling on the authorities to test a reported claim that Sri Lanka “could be losing” more than US$50 million a year in foreign exchange through Colombo Port charging arrangements before any changes are made to the rules that exporters rely on.
The claim was made by the Ceylon Freight & Logistics Association (CEYFFA), whose General Secretary, Inam Caffoor, raised it at a press conference reported in the Sunday Island on 31 October 2026. The report provides no evidence, gives no calculation, period, container volume or transaction data, and its wording is “could”, not “is”.
“Apparel exporters ship every day, and they plan their costs around the freight charges they are quoted,” said Yohan Lawrence, Secretary General, JAAF. “A figure of this size deserves scrutiny. But the rules that ensure fair trading, prevent unjustifiable charges should not be rewritten on a claim that has yet to be backed by evidence.”
For JAAF’s members, the stakes are high.
Gazette No 2334/26 of 31/03/2023 covers the four cardinal principles that protect both importers and exporters from service providers who may charge exorbitant fees in addition to freight for the carriage of goods. The four principles upheld by this gazette are:
Principle 1 – the cost of carriage of containers from origin to destination must be identified as all-inclusive freight, without breaking them into land costs and freight components.
Principle 2 – Contracting party pays: i.e. the service provider can only recover costs of the service from the contracting party using the service and not from a third party (eg exporter for an FCA contract) with no contractual liability.
Principle 3 – goods landed at port could only indicate “Freight Pre Paid” or “Freight Collect”. The concept of “Zero Freight” was not allowed.
Principle 4 – in the case of imports into Sri Lanka, the only charge permissible outside the freight was the Delivery Order (DO) fee. All other costs had to be calculated in the all-inclusive freight.
This framework gives shippers a single, “all inclusive” payment for freight, and one charge paid locally, that of a Delivery Order Fee. The DO fee has to be filed with the Director General of Merchant Shipping and published on their website. Some companies already charge upto 100,000 for the simple act of issuing a Delivery Order. The National Chamber of Exporters has noted that before 2013 importers and exporters faced nearly 50 separate charges, and it has warned against going back to that regime, something that CEYFFA seems hell bent on doing.
JAAF also sees gaps in the leakage claim itself. The port’s own charge is set by tariff, and the Sri Lanka Ports Authority has reportedly collected its charges from shipping lines in US dollars since June 2022. Money paid to a Sri Lankan port or terminal operator is a foreign-exchange inflow, not a leak. The rest of the freight rate is the shipping line’s payment for carrying cargo by sea, which is earned overseas on every international shipment. A legitimate freight payment to a foreign carrier is not automatically an unlawful outflow.
A simple test of scale shows why the detail matters. Colombo handled about 1.10 million import and export containers (TEUs) between January and October 2025, so a US$50 million loss spread across that cargo would equal roughly US$38 to US$45 per TEU. That arithmetic proves nothing by itself, but it shows that a credible estimate has to start from actual transactions.
JAAF is asking for five questions to be answered: Who is losing the money?, Who is receiving it?, Which transactions are involved?, What is the legal basis?, How was the figure calculated?
It also urges the Director General of Merchant Shipping, the Sri Lanka Ports Authority, the Central Bank of Sri Lanka and Sri Lanka Customs to request the underlying evidence from CEYFFA, carry out a formal examination and publish the findings. JAAF supports CEYFFA’s call for a consultative mechanism that includes all stakeholders, and believes exporters should have a seat at that table.
“If a loss exists, we should find it and fix it,” said Lawrence. “If it does not, the public should be told that too. Our members need stable, transparent costs to compete, and that is best protected by following the evidence.”
SDB bank has strengthened its commitment to developing Sri Lanka’s co-operative sector by introducing dedicated Co-operative Service Counters at selected branches, providing co-operative societies and their members with priority access to personalised banking services and minimal waiting time.
The introduction marks the first phase of an initiative to establish 20 dedicated counters across selected branches during 2026. Recognising co-operative societies as a strategic customer segment, the bank is adapting its branch services to better address their requirements while reinforcing its support for the wider co-operative community.
Through these counters, customers can access deposits, withdrawals and account opening services, alongside loan information, loan applications and related banking assistance. This dedicated point of access accommodates the banking needs of both co-operative societies and their individual members.
Commenting on the initiative, Lasantha Edirisuriya, Assistant General Manager, Head of Co-operative Development at SDB bank, said, “Our commitment to this sector goes beyond providing financial services. It is about understanding the needs of societies and their members and supporting the communities they serve. These dedicated counters are a practical step towards making banking more accessible and responsive, helping customers manage their everyday financial needs while building lasting relationships with the bank.”
The initiative also supports the bank’s objectives of improving operational efficiency and sustaining business growth within the co-operative sector. By establishing a more focused service arrangement, SDB bank aims to strengthen customer retention and create opportunities to deepen its existing relationships with societies and their members.
As the phased rollout progresses, the dedicated counters will give SDB bank’s focus on co-operative development a stronger presence within its branch network, connecting its broader commitment to the sector with the everyday banking experience of the communities it serves.
We officially marked our partnership with Softlogic, welcoming all their brands to the Thyaga merchant network.
The partnership brings a wide range of Softlogic brands into the Thyaga merchant network, giving Thyaga voucher holders more choices across fashion, food, supermarkets and lifestyle.
The signing was attended by representatives from both organisations, including Shawinda Nelson, Head of Marketing – Softlogic Holdings and Arwind Vishnu Mohan, Head of Store Operations – ODEL PLC representing the Softlogic team.
Representing Thyaga were Sachin Wickramasinghe, CEO, Devni Panduwawala, Director and Dinithi Dissanayake, Assistant Manager – Merchant Business.
Through the partnership, Thyaga customers will gain access to an expanded portfolio of brands including Softlogic Glomark, Softlogic Max, ODEL, Cotton Collection, Burger King, Popeyes, Baskin-Robbins, Crystal Jade, Delifrance, Subway, Levi’s, Calvin Klein, Tommy Hilfiger, Armani Exchange, Mango, Charles & Keith, Rado, Samsonite, Adidas, and more.
The collaboration significantly expands the ways customers can use their Thyaga vouchers, from fashion and dining to groceries and everyday purchases.
For Thyaga, the partnership represents another major step in strengthening its growing merchant network and delivering greater choice and flexibility to customers.
“We are pleased to partner with Thyaga to offer customers greater choice and flexibility when using their vouchers across our diverse portfolio of brands. From fashion and dining to groceries and everyday essentials, this collaboration makes it easier for customers to enjoy more of what they love across the Softlogic network. We look forward to building on this partnership and creating more rewarding experiences for our valued customers.” Stated the Softlogic team.
The agreement signing at ODEL, One Galle Face Mall officially marks the start of the Softlogic × Thyaga partnership, bringing two strong Sri Lankan brands together to create more rewarding experiences for customers.
More brands. More choices. More ways to use Thyaga.
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