Export target to remain unchanged despite April plunge

• EDB Chief says $ 10.75 b target set after factoring in COVID-19 impact  
• Export earnings fell 26% to $ 2.8 b when compared to Jan-April last year 
• Hopeful of rebound with agri and seafood exports
• EDB compiles restoration plan for all sectors  

By Charumini de Silva

Despite the sharp decline in merchandise exports in April, the Export Development Board (EDB) said it will not revise the $ 10.75 billion target set for the year, noting the new estimate was arrived at after taking all aspects into consideration.

“As soon as the novel coronavirus (COVID-19) was announced as a pandemic, we knew the borders will be closed and it will have an adverse impact on our exports,” EDB Chairman Prabhash Subasinghe told the Daily FT.

“In early April therefore, we decided to revise down the export forecast by a hefty 42% to $10.75 billion for the year. The revised target means a drop in our export earnings of about $7.75 billion compared to 2020 original forecast and also $5.39 billion from the actual exports of last year,” he added.

Before the COVID-19, the EDB set an export target of $18.5 billion for 2020, up from $16.14 billion achieved in 2019. As per the revised target EDB forecasts $7.53 billion in merchandise exports and $3.21 billion from service exports in 2020.

In April Sri Lanka’s merchandise exports plunged by 65% to $ 277.4 million, a historical decrease largely caused by the impact of shutting down factories due to the COVID-19 pandemic. In the first four months export earnings fell by 26% to $ 2,853 million from the corresponding period of last year.

Subasinghe said that there was no need to revise the target again unless the exports continue to decline in May and June as well.

“The new target for the year was arrived at after considering all aspects of supply and demand, as the COVID-19 pandemic affects both sides. We are hopeful that export performance of May and June will be much better. If at all the downward trend continues, we will revise the target after first half of the year is over,” he added.

Notwithstanding the gloomy global situation, Subasinghe expressed confidence that exports will be the first to recover, as tourism and worker remittances will take time to bounce back in the economic revival post COVID-19.

The EDB Chief believes agri-food, tea, coconut, seafood as well as value added fruit and vegetable exports will see an increased demand in the immediate future. He said the Government is already assessing the land and crop availability to explore export opportunities.

Subasinghe said apparel exports have already seen a strong revival in the sector with manufacturing of personal protective equipment (PPE) where it has almost attracted $ 1 billion in revenue.

“We predicted a 40% decline or $ 2 billion in apparel exports when we revised the targets for this year. However, it seems now the sector is going to experience a strong revival with already attracting $ 1 billion from PPEs. We are hopeful that the numbers will continue to grow,” he asserted.

He also pointed out that exports of rubber gloves and tyres will see positive growth in rubber exports.

Describing that Sri Lanka is at a unique position, Subasinghe stressed COVID-19 pandemic was a wakeup call for the entire world, where advanced countries will rethink think about supply dependency and national security going forward.

“The geographical location, stable Government, dynamic business environment, dependable logistics and resilient human resource in Sri Lanka will be a game changer to mitigate supply chain shockwaves post COVID-19,” he added. 

Noting that over 50 new enterprises have expressed interest to expand their businesses internationally during the two-month lockdown period he said that EDB was also working closely with Foreign Trade Missions in conducting business to customer (B2C) online meetings.

In addition, he said EDB has complied an internal restoration plan for every single export sector considering short, medium and long term.