Thursday Dec 12, 2024
Thursday Dec 12, 2024
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The export sector remains the silver lining amidst the multiple challenges, as it maintained the growth momentum year-to-date (YTD) up 9.7% to $ 5.1 billion in the first five months of this year.
The surpassing of $ 5 billion mark was possible with May merchandised exports amounting $ 980.2 million, up 10% year on year (YoY) and higher than $ 915.3 million in April. However the $ 1 billion mark remains elusive for the second consecutive month.
As per provisional data released by the Export Development Board (EDB) yesterday May merchandised exports grew mainly due to the increase in earnings from apparel and textiles, coconut-based products and electrical and electronic components.
EDB estimated services exports from January to May were at $ 1.47 billion, up by 93.3% from a year earlier. The services exports estimated by EDB consists 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 $ 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 May 2022
Product sectors except 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 to 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.
On monthly analysis, export earnings of kernel products, fiber products and shell products categorised under the coconut-based products increased by 5.37%, 4.93% and 12.97% respectively in May 2022 compared to May 2021.
Export earnings from seafood increased by 11.8% to $ 16.8 million in May 2022 compared to the same period a year earlier. The expansion was contributed mainly by higher exports of fresh fish (4.9%) and shrimps (90.74%).
Ornamental fish exports earnings also increased by 41.1% to $ 1.3 million in May 2022 compared to the same period last year.
The electrical and electronics components (EEC) increased by 18.8% YoY to $ 41.8 million in May 2022 with strong performance in exports of insulated wires and cables (18.78%) and electrical transformers (16.5%).
However, export earnings from rubber and rubber finished products fell by 15.9% YoY to $ 76.7 million in May 2022, with poor performance in exports of pneumatic and re-treated rubber tyres and tubes (-5.41%).
Export earnings from tea which made up 12% of merchandise exports, also decreased by 14.2% YoY to $ 93.7 million. However, export of tea packets and bulk tea decreased by 9.75% and 18.83% respectively in May compared to the same period a year earlier.
Spices and essential oils fell by 14.9% to $ 21.5 million in May 2022 compared to the same period a year earlier., due to the poor performance in oleoresins (-91.79%) and cloves (-49.61%). Despite the decline in the sector, earnings from Ceylon Cinnamon and pepper increased by 3.27% and 11.26% respectively in May 2022 as against the same period a year earlier.
Major exports during January – May 2022
Major product sectors except tea, rubber-based products and spices and concentrates, the apparel and textiles, coconut-based products, electronics and electronic components, food and beverages, seafood and ornamental fish recorded increased exports.
Apparel and textiles exports increased by 16.3% to $ 2.4 billion during the first five months of 2022 compared to the same period a year earlier. Except gloves, mitts and mittens of textile (-2.61%) and made-up clothing accessories (-9.9%), yarn (-32.7%) and made-up textile articles (-3.04%), exports of other sub categories of apparel and textiles sector increased.
Coconut and coconut-based products increased by 10.4% to $ 350 million from January to May compared to the same period last year. Earnings from all the major categories of coconut-based products increased during the first four months compared to the corresponding period of 2021 due to the improved performance in exports of liquid coconut milk, coconut cream, coconut milk powder, cocopeat, mattress fibre and activated carbon, coconut oil and desiccated coconut.
EEC exports increased by 14.6 % to $ 188.3 million from January to May compared to the corresponding period of 2021. Export of insulated wires increased by 19.71% during the first four months to $ 33.04 million compared to the same period a year earlier. Export of switches, boards and panels, electrical transformers and other electrical and electronic products increased by 4.43%, 34.58% and 9.97 % respectively during the first five months, compared to the corresponding period in 2021.
Seafood export earnings increased to $ 105.8 million, up by 16.7% during the first five months compared to same period in 2021, as a result of the better performance in all sub categories — frozen fish (8.64%), fresh fish (45.92%) and prawns (56.55%).
Earnings from export of ornamental fish increased by 19.7% to $ 7.1 million during the period of January to May 2022 compared to the same period a year earlier.
However, tea exports fell by 12.5% to $ 460.9 million in the first five months of 2022 compared to the corresponding period a year earlier. Exports of all the sub categories of tea sector except tea bags; tea packets (-14.2%), bulk tea (-10.95%), instant tea (-23.42%) and green tea (-31.43%) fell sharply during the first five months in 2022, compared with the same period a year earlier.
Export earnings from rubber and rubber finished products also fell by 2.4% to $ 414.3 million in January to May compared to the same period in 2021. The lower exports of industrial and surgical gloves fell by 18.4% YoY in the five four months compared to the same period in 2021. However, exports of pneumatic and re-treated rubber tyres and tubes increased by 10.31% during January to May 2022 compared to the same period a year earlier.
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 five months as well as in May 2022. Five markets out of the top 10 markets recorded positive performance except China and UAE.
In May, exports to the US — Sri Lanka’s single largest export destination, increased to $ 266.42 million YoY up by 25.02%. The better performance was led by an increase in exports of apparel and textile (40.83%), and coconut-based products (29.69%).
The cumulative exports to the US was at $ 1.36 billion – a significant YoY increase of 20.32 % compared to $ 1.13 million recorded during January to May 2021.
Exports to FTA partners
Exports to Free Trade Agreement (FTA) partners during the first five months accounted for 7.2% of total merchandise exports, increased by 17.67% to $ 398.98 million.
Although Exports to India increased by 20.61% YoY to $ 354.99 million, exports to Pakistan fell by 6.75% to $ 33.99 million during the first five months compared to the corresponding period of 2021.
Increased Exports to India is mainly supported by increased exports of animal feed (7.92%), arecanuts (79.74%), woven fabrics (162.24%) and other textile articles (83.42%) in January to May 2022.
Export Performance in regions
Sri Lanka’s exports to all regions except for CIS countries increased from January to May 2022 compared to the corresponding period of 2021.
Exports to the European Union (EU), South Asia and ME increased in April compared to the same period a year earlier.
In May, exports to the EU which comprise 20% of Sri Lanka’s exports, increased by 11.39% YoY to $ 234 million.
Breakdown of exports to the top five EU markets which accounted for 80% of Sri Lanka’s total exports were; Germany $ 303.5 million (up by 6.14%), Italy $ 243.86 million (up by 7.89%), Netherlands $ 161.58 million (down by 0.32%), Belgium $ 122.07 million (down by 7.65%) and France $ 103.68 million (up by 14.15%).
