The nexus between COVID-19 and finfish export from Sri Lanka to its main trading partners; the United States and the European Union

Abstract

The Sri Lankan seafood sector has been seriously disturbed during the Covid 19 pandemic due to a bleak demand outlook as well as an array of supply challenges. Identification of the effects of this new challenge to the global fish trade is critical to take actions to sustain the market and manage resilience in such uncertain periods. Study aims to assess the impact of the Covid-19 outbreak on Sri Lanka's finfish exports to its key trading partners, the United States of America (USA) and the European Union (EU). The time series data were gathered from the United Nations commodity trade database between January 2017 and December 2022. Study used structural break point analysis of time series data, followed by time series regression with the Covid-19 impact as a dummy variable using EVIEWS statistical software. Compared to 2019, total finfish exports to the United States dropped by 56.5% in 2020 and 72.5% in 2021 while finfish exports to European market increased by 7% and 28% in 2020 and 2021, respectively. The Covid-19 dummy was statistically significant in the time series regression, with a coefficient value of -71.93 in USA trade flow which implies that Covid-19 has a negative impact on finfish trade to the USA. In contrast, statistically significant impact was not found in finfish trade to the EU during the pandemic and this mainly because European seafood market impacted due to Covid-19 yet imports from developing countries fell slightly and overall demand for seafood has remained largely stable throughout 2020. However, study suggested that future research should focus on the country-specific product sensitivity at the individual product level.