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The country’s merchandise exports have soared by 20% to $ 1.21 billion in June, whilst pushing to $ 6.41 billion in the first half of 2022, appearing to be the sole silver lining for Sri Lanka to avert partly a direr foreign exchange crisis.
Previously, the highest for the month was recorded seven months ago with $ 1.16 billion in October 2021.
As per provisional data released by the Export Development Board (EDB) yesterday, in the first half of 2022, merchandise exports exceeded the $ 6 billion mark, up by 12.4% year-on-year.
June merchandise exports grew by 20% from a year earlier, driven by apparel and textiles, rubber-based and coconut-based products, food and beverages as well as seafood, proving the private sector›s resilience and becoming the only economic contributor generating a fixed inflow of much needed foreign exchange.
EDB estimated services exports in the first half were at $ 1.34 billion, up by 45.72% from a year earlier. The services exports estimated by EDB consist of ICT/BPM, construction, financial services, and transport and logistics.
In 2021, Sri Lanka’s total exports recorded $ 15.12 billion, up by 23% from 2020 sustaining its resilience, despite an unprecedented economic crisis. Last year’s performance comes second only to the $ 15.91 billion recorded in 2018.
The Government is banking on exports, the only hope that can pull Sri Lanka out of the vicious cycle of the current account and put it back on a sound economic growth path. The Government has assured more support to exporters to reach a $ 20 billion target this year.
Major exports in June 2022
Product sectors except for spices and concentrates, tea, and rubber-based products; major export items like apparel and textiles, coconut-based products, EEC components and food and beverages, seafood, and ornamental fish drove the increased export earnings in May.
Exports of apparel and textiles increased to $ 482.7 million, up by 30.1% YoY in April 2022. The increase was driven by both apparel and textiles. The increase was driven by both Apparel and Textiles.
Export earnings from Rubber and Rubber Finished products have increased by 7.18% YoY to $ 102.36 million in June 2022, with good performance in exports of Pneumatic and Retreated Rubber Tyres and Tubes (15.2%).
On monthly analysis, export earnings of kernel products, fibre products, and shell products categorised under the Coconut-based products increased by 30.15%, 1.63%, and 21.3% respectively, in June 2022 compared to June 2021.
Export earnings from Seafood increased by 130.75% to $ 36.39 million in June 2022 compared to June 2021. The expansion was contributed mainly by higher exports of Frozen fish (89.3%), Fresh fish (219.18%), and shrimp (219.25%).
Further, export earnings from Ornamental fish increased by 297.4% to $ 3.06 million in June 2022 compared to the same period last year.
Export earnings from the Electrical and Electronics Components increased by 5.71 % YoY to $ 39.82 million in June 2022 with a strong performance in exports of Insulated Wires and Cables (14.5%) and Switches, Boards, and Panels (23.55%).
However, export earnings from tea which made up 12% of merchandise exports, also decreased by 11% YoY in June 2022 to $ 93.7 million.
Spices and Essential Oils exports also fell by 10.9% YoY to $ 31.74 million in June 2022 compared to the same period a year earlier. This was mainly due to the poor performance of pepper (49.68%), oleoresins (-7.26%), and cloves (-24.15%). Despite the decline in the sector, export earnings from cinnamon increased by 89.81% in June 2022 compared to as against the same period a year earlier.
Major exports during 1H 2022
Key product sectors except for tea, rubber-based products, spices and concentrates, apparel and textiles, coconut-based products, electronics and electronic components (ECC), food and beverages, seafood, and ornamental fish recorded increased exports.
Apparel and textiles exports increased by 19.73% to $ 2.97 billion during the first half of 2022 compared to the same period a year earlier. Except for Made-up Clothing Accessories (-8.7%), Yarn (-21.38%), and Textile Floor Coverings (-3.28%); exports of other subcategories of the Apparel and Textiles sector increased.
Coconut and coconut-based products increased by 12% to $ 434.34 million from January to May compared to the same period last year. Earnings from all the major categories of Coconut-based products increased from January to June 2022 compared with the corresponding period of 2021 due to the improved performance in the export of Liquid Coconut Milk, Coconut cream, Cocopeat, Mattress Fibre, Activated Carbon, Coconut Oil, and Desiccated Coconut.
EEC increased by 12.96 % to $ 228.12 million during the first half of 2022 compared to the corresponding period of 2021. Export of Insulated wires increased by 18.68 % from January to June 2022 to $ 40.54 million compared with the corresponding period of the previous year. In addition, the export of Switches, Boards and Panels, Electrical Transformers, and Other Electrical and Electronic Products increased by 8.29%, 18.87%, and 9.14 % respectively during the first six months of 2022 compared to the same period a year earlier.
Seafood export earnings increased by 33.64% to $ 142.17 million in the first half of 2022 compared to the same period in 2021, as a result of the better performance in all the subcategories except Lobsters; Frozen Fish (20.97%), Fresh Fish (70.51) and Prawns (86.04%).
Earnings from the export of ornamental fish increased by 51.49% to $ 10.15 million from January to June 2022 compared to the same period a year earlier.
However, export earnings from Tea fell by 11.25% to $ 577.38 million in the first six months of 2022 compared to the corresponding period a year earlier. Exports of all the subcategories of the tea sector except Tea Bags; Tea packets (-11.47%), Bulk Tea (-10.96%), Instant Tea (-28.55%), and Green Tea (-23.65%) decreased from January to June 2022 compared with the same period of 2021.
Export earnings from Rubber and Rubber finished products also fell by 0.64% to $ 516.62 million in January – June 2022 compared to the same period of 2021 attributed to lower exports of Industrial and surgical gloves (-16.06%). However, exports of Pneumatic and Retreated Rubber Tyres and Tubes increased by 8.45% during the first half of 2022 compared with the same period of 2021.
Export performance in major markets
Strong export performance was recorded for the major export markets which accounted for 65% of total merchandise exports during the first six months. Nine markets out of the top 10 markets recorded positive performance except for China.
In June 2022, exports to the US — Sri Lanka’s single largest export destination, increased to $ 323.65 million YoY up by 46.16%. The better performance was driven by apparel and textile (29.68%) and Coconut based products (26.8%).
The cumulative exports to the US were at $ 1.7 billion – a significant YoY increase of 24.54 % compared to $ 1.35 million recorded from January to June 2021.
Exports to FTA partners
Exports to Free Trade Agreement (FTA) partners during the first half of 2022 accounted for 7.2% of total merchandise exports, increasing by 18% to $ 398.98 million. Although exports to India increased by 21.24% YoY to $ 437.75 million, exports to Pakistan fell by 8.3% to $ 40.92 million during the first six months compared to the corresponding period of 2021.
Increased exports to India are mainly supported by increased exports of animal feed (19.26%), Areca nuts (95.96%), woven fabrics (162.24%), and other textile articles (47.76%) from January to June 2022.
Export performance in regions
Sri Lanka’s exports to all regions except for CIS countries increased from January to June 2022 compared to the corresponding period of 2021.
In June, exports to the EU which comprise 20% of Sri Lanka’s exports, increased by 21.55% YoY to $ 303.17 million. Breakdown of exports to the top five EU markets which accounted for 80% of Sri Lanka’s total exports was; Germany $ 383.94 million (up by 9.41%), Italy $ 295.33 million (up by 7.45%), Netherlands $ 203.02 million (up by 4.81%), Belgium $ 156.39 million (down by 1.98%) and France $ 130.87 million (up by 14.71%).
