External trade makes merry in December

Monday, 7 March 2011 00:35 - - {{hitsCtrl.values.hits}}

Exports soar to highest ever of $ 968 m, boosting 2010 full total to a record $ 8.3 b, up 17.3% over 2009
Imports soar to $ 1.42 b bringing 2010 total to $ 13.5 b, up 34% from 2009
Trade deficit surpasses $ 5 b mark from $ 3 b in 2009

A merry month for exports in December has propelled the country to conclude 2010 as the best for ‘Made in Sri Lanka’ in global markets.

The Central Bank said exports in December recorded the highest ever figure of $ 968 million, boosting the full year value to $ 8.3 billion, the best ever in the country’s history. December shipments recorded 34% growth whilst end 2010 performance reflected a 17.3% growth over 2009. The year 2010 also surpassed the previous highest in exports $ 8.11 billion achieved in 2008.

Imports had also amounted to its highest level in December with $ 1.42 billion, up by 31% over the corresponding month of 2009, whilst the total figure for the full year was $ 13.5 billion, up 32% over 2009.

These twin developments saw the trade deficit expand to $ 5.2 billion in 2010 from $ 3.1 billion in 2009.

The largest contribution to the growth in exports in December was from the industrial sector, led by significant increases in exports of textiles and garments, food and beverages and rubber products.

Earnings from garment exports to EU and USA increased by 33.9% and 31.4%, respectively, in December 2010.

Exports of food, beverages and tobacco products increased by 74.3%, year-on-year, mainly due to higher earnings recorded by exports of fruits, vegetables and animal fodder. Rubber product exports consisted mainly of new pneumatic tyres and articles of apparel and clothing accessories (mainly gloves).

However, earnings from machinery and equipment and the diamonds and jewellery exports recorded year-on-year declines in December 2010. Earnings from agricultural exports increased in December 2010, reflecting a healthy growth in all major sub sectors, mainly due to higher prices recorded by major export crops in the international market.

The average export prices of tea and rubber continued to remain high at $ 4.56 per kg and $ 4.26 per kg, respectively, in December 2010. Earnings from minor agricultural exports increased by 28.8% to $ 30 million in December, 2010 mainly due to significant increases recorded in the export volumes of cocoa, essential oils, cashew nuts and cardamoms.

Expenditure on imports of intermediate goods increased in December 2010, led by higher expenditure incurred on petroleum imports. The average import price of crude oil increased by 16.5% to $ 90.37 per barrel in December 2010.

Textile imports also increased substantially in December 2010, indicating a better outlook for the garment industry. The expenditure on fertiliser imports increased by 119.4% to $ 29 million reflecting higher import volumes due to the extended acreage cultivated in the Northern and Eastern Provinces and extension of fertiliser support scheme to coconut cultivations.

Import expenditure on food and drink increased in December 2010 mainly due to higher food prices in the international market. Expenditure on non food consumer import category also increased mainly due to higher imports of motor vehicles. All categories of investment goods imports increased in December 2010.