Citing a shortage of raw materials, ACL Cables, one of Sri Lanka’s premier electric cable manufacturers, informed customers that the company would only be selling cables on a cash-front basis.
According to the company, the shortage of Sri Lanka’s foreign reserves and the constant depreciation of the Sri Lankan rupee make it difficult for the company to acquire the necessary raw materials.
As of August 2021, the Sri Lankan foreign reserve was $3.5 billion. Within the next 2-3 months, around $1.5 billion would be used up, bringing the total down to $2 billion. The Sri Lankan rupee saw a constant depreciation of 8.6%, and as of August 31st, 1 dollar was around LKR 204.89.
Over the last 12 months, shipping rates have increased exponentially. The Shanghai Containerized Freight Index indicated a 300% increase in the previous 12 months.
China, the world’s largest aluminum supplier, imposed several export restrictions. Furthermore, Guinea, which accounts for 22% of the world’s bauxite supply, came under a military junta. The aluminum price worldwide rose by over 70%, with $3000 being charged per metric ton, the highest since 2008. These unfavorable factors have made it increasingly difficult for ACL to acquire sufficient supplies.
According to ACL, the current stock of supplies will be insufficient for the next two months, and the upfront cash-only system ensures a regular supply to all customers.
No.820, Mount Cresent,Malabe,Sri Lanka