Wednesday, 25 September 2013 01:00
Earnings from apparels up 13.5%; tea jump by 20%; vehicle imports accelerate
The Central Bank said yesterday earnings from exports and expenditure on imports have recorded significant growth on a year-on-year basis for the second consecutive month in July 2013, led by higher trade volumes.
In July 2013, earnings from exports grew by 8.0% to $858 million, while expenditure on imports increased by 20.8% to $1,601 million, compared to July 2012. The significant increase in the growth of imports in July was partly due to the base effect. On a cumulative basis, earnings from exports during the first seven months of 2013 declined by 2.7%, while expenditure on imports declined by 2.6% compared to the corresponding period in 2012. As a result, the cumulative trade deficit during the first seven months of 2013 declined by 2.5% to $5,300 million, from $5,435 million in the corresponding period of 2012. Earnings from exports in July 2013 reached $858 million, the highest monthly value during the year, led by higher earnings from agricultural exports followed by industrial exports.
Earnings from the export of textiles and garments, which account for more than 40% of total exports, increased by 13.5%, contributing 70% to the total increase in exports.
During the month, earnings from export of textiles and garments to the USA and to the EU increased by 26.9% and 1.6% respectively, reflecting a gradual recovery in those regions. Earnings from the export of machinery and mechanical appliances, chemical products, and leather products also contributed significantly to the growth in exports of industrial products.
Agricultural export earnings which account for more than a quarter of total exports, increased by 21.6% in July 2013 on a year-on-year basis, mainly due to higher exports of tea and spices.
Earnings on tea exports increased by 20.2% in July 2013 due to a combination of an increase in export volumes by 12.6% and an increase in the average export price by 6.7%. Earnings from spice exports increased by 50.6% propelled by improved performance of commodities such as cinnamon, pepper and cloves. Export earnings from kernel products of coconut and minor agricultural products also increased significantly due to higher volumes exported.
However, export earnings from rubber and seafood declined in July 2013 reflecting reductions in both export volumes and prices. Meanwhile, industrial exports increased by 3.7% in July 2013 mainly due to an increase in export earnings from textiles and garments.
Exports of gems, diamonds and jewellery, petroleum products, food, beverages and animal fodder on the other hand declined in July 2013.
Expenditure on imports increased by 20.8% to $1,601 million in July 2013, with increases recorded in all major categories of imports. Expenditure on consumer goods imports increased by 30%, year-on-year, in July 2013 with increases recorded in both food and non-food consumer goods categories.
Vehicle imports, which were declining on a year-on-year since April 2012, began to increase from June 2013 with growth accelerating further in July 2013, becoming the main contributor to the increase in consumer goods imports.
Increased imports of vehicles could be mainly attributed to the sharp depreciation of several currencies including the Indian rupee and the Japanese yen against the US dollar.
Other food items such as lentils, onions and edible oils, which are largely imported from India, also increased substantially in July 2013. Expenditure on intermediate goods imports increased by 21.5%, year-on-year, to $943.4 million in July 2013, mainly due to the higher import expenditure on refined petroleum products.
Accordingly, in July 2013, the import volume of refined petroleum increased by more than two fold compared to July 2012. Notwithstanding such increase, expenditure on fuel imports during the first seven months of 2013 recorded an overall decline, over the corresponding period in 2012.
Meanwhile, expenditure on non-fuel imports increased at a moderate rate of 4.3%, year-on-year, to $1,166 million in July 2013. Import expenditure on fertiliser and plastic articles also increased considerably during the month of July 2013.
At the same time, expenditure on textiles and textile articles, diamonds and precious stone, and wheat and maize, which are classified under intermediate goods, declined in July 2013. Import of investment goods increased by 12.8% to $347.8 million in July 2013 mainly due to a significant increase in machinery and equipment, even though transport equipment declined substantially.