The Export Development Board (EDB) said this week that 2020 marked a successful year for Sri Lanka’s exports, netting $ 9.9 billion, which was a 104% achievement from the revised forecast of $ 9.5 billion from the original target of $ 13.5 billion.
EDB said that the forecast of $ 13.5 billion in early 2020 was challenging, requiring not only strong efforts from local enterprises, but also the recovery of global demand amid complicated COVID-19 situation.
“Amidst the outbreak of COVID-19, a notable rebound of the export sector was recorded from mid - 2020 with the proactive measures introduced by the Government. The growth in exports was not only due to the effective prevention and control of the epidemic in Sri Lanka, the commitment of exporter community to support the national economy by bringing in the much-needed foreign currency at a crisis situation is commendable,” Export Development Board (EDB) Chairman Suresh De Mel said in a statement.
Following is the detailed statement on the performance of exports in December and full year 2020 based on preliminary data.
Export performance in December 2020: As per the Customs statistics, Export earnings in December 2020 amounted to $ 931.65 m, which was 13.75% upper than the November 2020 and 6.91% lower than December 2019. Reduction recorded in October and November exports due to the C19 outbreak in Sri Lanka which has had a direct impact on our manufacturing and export facilities also continued in December 2020.
Further, adverse global market conditions for Sri Lanka’s key exports were aggravated by the second wave of the COVID-19 pandemic experienced by many countries, leading to low demand for exports of Sri Lanka.
When considering the top 10 export markets, other than United States, United Kingdom and Germany, increases in exports were recorded in other markets. Exports to China and turkey increased 30.97% and 31.01% in December 2020 compared with December 2019 respectively.
Exports to EU (4.86%) and CIS (5.92%) Regions recorded increases in December 2020 compared to December 2019, exports to other regions were declined.
Export earnings from apparel and textiles declined by 6.46% to $ 450.49 m during the month of December 2020 compared with $ 481.59 m recorded in December 2019. In parallel, 38.95% increase was recorded in December 2020 in comparison to November 2020. Despite the decline in the sector, earnings from exports of made-up textile articles and other textiles increased by 64.79% and 11.72% respectively in December 2020 in comparison to December 2019. However, exports of apparel increased by 46.58% in December 2020 compared with November 2020.
Export earnings from tea which made up 12% of merchandise exports increased by 6.78% y-o-y to $ 112.97 m in December 2020 compared to December 2019. Similarly, export earnings from tea recorded 17.42% increase in December 2020 in comparison to November 2020.
In addition, export earnings from rubber and rubber finished products have increased by 6.22% y-o-y to $ 79.52 m in December 2020 due to the better performance in exports of pneumatic and retreated rubber tyres and tubes (6.34%) and industrial and surgical gloves of rubber (27.70%). However, exports of rubber plates, sheets rods of vulcanised or unhardened rubber and hygienic or pharmaceutical articles have decreased by 6.05% and 13.33% respectively in December 2020 in comparison to December 2019.
Earnings from all the major categories of coconut based products increased in December 2020 compared with December 2019. Earnings from coconut oil, desiccated coconuts, coconut cream, liquid coconut milk and coconut flour categorised under the coconut kernel products increased y-o-y by 41.15%, 2.2%, 59.7%, 31.06%, and 131.82% respectively in December 2020.
Being the largest contributor to coconut based sector, coco peat, fiber pith and moulded products categorised under coconut fibre products increased by 44.23% to $ 10.99 m in December 2020 in comparison to December 2019. Earnings from activated carbon, categorised under coconut shell products, increased by 41.56% in December 2020 compared to December 2019.
Export earnings from spices and essential oils have increased by 57.61% to $ 33.13 m in December 2020 compared with the value of $ 21.02 m recorded in December 2019 due to the better performance recorded in exports of cinnamon (13.82%) and pepper (315.15%).
Meanwhile, earnings from export of Electrical and Electronic Components (EEC) increased by 26.58% to $ 36.14 m in December 2020 in comparison to December 2019. In parallel, earnings from export of EEC increased by 42.07% in December 2020 compared with November 2020.
Export performance during the period of January-December 2020: Total merchandise export earnings for January to December 2020 was $ 9,912 m compared to $ 11,940 m recorded in a similar period of the previous year – a decline of 16.98%.
Major exports such as apparel and textiles ($ 4,405.84 m), tea ($ 1,240.94 m), rubber and rubber based products ($ 816.17 m) and electrical and electronic components ($ 328.28 m) recorded decrease of 21.01%, 7.83%, 9.66% and 13.87% respectively during January-December 2020 compared to the similar period of the previous year.
Further, exports of apparel, one of the hardest-hit economic sectors by COVID-19, recorded $ 4,405.84 m, higher than the revised forecast of $ 4.1 billion in April. However, export of coconut and coconut based products ($ 664.54 m), spices and concentrates ($ 335.47 m) and other export crops ($ 67.59 m) recorded positive growth rates during the period. The export sectors that shows a positive growth at disaggregate level includes export of made-up textile articles, other textile articles, industrial and surgical gloves of rubber, coconut oil, coconut milk powder, coconut cream, liquid coconut milk, coconut flour, coconut vinegar, coco peat, fibre pith and moulded products, coconut husk chips, activated carbon, coconut shell pieces, powder and charcoal, cinnamon, pepper, essential oils, ginger, processed vegetables, fruits and juices, sugars, sugar confectionery and bakery products, rice, black gram, lentils, arecanuts, starches, glues, enzymes, other plastic products and petroleum gases.
Earnings from export of PPE (Personal Protective Equipment) related products increased by 47.42% to $ 876.44 m in January to December 2020 compared with the value of $ 600.45 m recorded in the corresponding period of previous year.
The strong performance was mainly due to the increased exports of other made-up articles (HS 630790) and articles of apparel and clothing accessories of plastics (HS 392620). As a result of increased export of articles of apparel and clothing accessories of plastics, export of plastic products increased by 139.96% to $ 176.35 m in January to December 2020 compared with the value of $ 73.49 m recorded in the corresponding period of previous year.
Sri Lanka’s trade performance in major markets: The top five export destinations during the period Jan-December 2020 were United States of America ($ 2,507.2 m), United Kingdom ($ 910.47 m), India ($ 604.5 m), Germany ($ 570.39 m) and Italy ($ 457.32 m) absorbed over 50% of exports recorded in the period. Being the largest single export destination, United States of America has absorbed $ 239.73 m worth of exports in December 2020 recording a decline of 15.33% in comparison to $ 283.12 m absorbed in December 2019. Also, exports to United States of America decreased by 20.14% in January-December 2020 in comparison to the corresponding period of previous year. Exports to United Kingdom as the largest trading partner in the EU Region recorded decrease of 6.31% to $ 67.68 m in December 2020 compared with December 2019.
Further, exports to top 10 markets have also shown poor performance during the period of January to December 2020.
Except to EU (4.87%) and African region (5.92%), Exports to the regions; South Asia, ASEAN, CIS and Middle East Countries have decreased by 9.95%, 28.02%, 7.28% and 5.51% respectively in December 2020 compared with December 2019.
Export of services: The services exports estimated by EDB which includes ICT/BPM, construction, financial services and transport and logistics show exports of $ 2,976 m for the period of January to December 2020 compared to $ 3,888 m recorded in the corresponding period of the previous year, which shows a decline of 23.46%.
Revised export forecast and achievement: The revised export forecast of the Export Development Board for 2020 was $ 13.39 billion and of that $ 9.57 billion was expected from merchandise exports and $ 3.82 billion from services exports. During the period January to December 2020, earnings from exports recorded $ 12.89 billion including the estimated services data for October to December and 96.27% achieved from the revised export forecast.
Further, earnings from merchandise exports and services exports achieved 103.56% and 77.99% respectively during the period of January to December 2020.