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Friday May 17, 2024
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Sri Lanka’s merchandise exports have sustained the growth momentum in July, increasing 2.25% to an all-time high of $ 1.28 billion propelling the first seven months performance by 12% to over $ 7.6 billion.
Previously, the highest earning for a month was recorded in June with $ 1.21 billion, after a lapse of seven months in October 2021 which recorded $ 1.16 billion.
As per provisional data released by the Export Development Board (EDB) yesterday, in the first seven months of 2022, merchandise exports exceeded the $ 7 billion mark, up by 11.8% year-on-year.
July merchandise exports grew by 2.25% from a year earlier, driven by apparel and textiles, which recorded an all-time high figure, reaffirming the sheer resilience of the private sector-run industry.
EDB estimated services exports in the first seven months were at $ 1.14 billion, up by 5.39% 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 heavily banking on exports, as it became the only economic contributor generating a fixed inflow of much-needed foreign exchange amidst the ongoing crisis. The Government has assured more support to exporters to reach a $ 20 billion target this year.
Major exports in July 2022
Product sectors except for rubber-based products, rubber-based products, spices, and concentrates; major export items like apparel and textiles, tea, electrical and electronic components (EEC) diamonds, gems and jewellery, and food and beverages, drove the increased export earnings in July. Exports of apparel and textiles increased to $ 550.05 million, up by 21.55% YoY in July 2022. The increase was driven by both apparel and textiles.
Tea export earnings which made up 11% of merchandise exports, also increased by 2.08% YoY in July 2022 to $ 117.52 million. This was mainly due to the higher export of tea packets (13.57%).
Export earnings from the ECC increased by 4.36% YoY to $ 4.18 million in July 2022 with a strong performance in exports of Insulated Wires and Cables (8.26%) and Other Electrical and Electronic Products (15.5%).
However, export earnings from Rubber and Rubber Finished products decreased by 7.67% YoY to $ 89.24 million in July 2022, with poor performance in exports of Industrial and Surgical Gloves (-20.96%). On monthly analysis, export earnings of kernel products, fibre products, and shell products categorised under the Coconut-based products decreased by 25.62%, and 15.45% respectively, in July 2022 compared to July 2021.
Export earnings from Seafood fell by 48.99% to $ 20.65 million in July 2022 compared to same period a year earlier. Except for shrimps, export earnings from Frozen Fish and Fresh Fish decreased by 59.5% and 61.36% respectively in July 2022. Further, export earnings from Ornamental Fish fell by 72.47% to $ 1.36 million YoY.
Spices and Essential Oils exports also fell by 26.2% YoY to $ 33.91 million in July 2022 compared to the same period a year earlier. This was mainly due to the poor performance of Cinnamon (-17.45%) Pepper (-38.36%), Oleoresins (-4.78%), and Cloves (-51.87%).
Major exports during 1H 2022
Key product sectors except for tea, rubber-based products, spices and concentrates; apparel and textiles, coconut-based products, ECC, gems and jewellery, food and beverages, and seafood recorded increased exports.
Apparel and Textile exports increased by 20.01% to over $ 3.15 billion during the first seven months of 2022 compared to the same period a year earlier. Except for Made-up Clothing Accessories (-7.07%), Woven fabrics (-17.52%), Yarn (-1.48%), and Textile Floor Coverings (-5.88%); exports of other sub-categories of the Apparel and Textiles sector increased.
Coconut and coconut-based products increased by 7.98% to $ 501.47 million. Earnings from all the major categories of Coconut-based products increased from January to July 2022 compared with the corresponding period of 2021 due to the improved performance in the export of Liquid Coconut Milk, Cocopeat, Mattress Fibre, Activated Carbon, Coconut Oil, and Desiccated Coconut.
ECC exports increased by 11.53% to $ 269.3 million in the first seven months compared to the same period of 2021. Export of Insulated wires increased by 17% to $ 47.62 million from January to July 2022 compared to the same period a year earlier. In addition, the export of Switches, Boards and Panels, Electrical Transformers, and Other Electrical and Electronic Products increased by 3.27%, 13.13%, and 10.03 % respectively during the first seven months compared to the corresponding period of 2021.
Seafood export earnings increased by 10.88% to $ 162.82 million from January to July 2022 compared to the same period a year earlier due to the better performance in all the sub-categories except Frozen Fish and Lobsters; Fresh Fish (27.96) and Prawns (67.47%).
However, earnings from the export of ornamental fish marginally decreased by 1.03% to $ 11.52 million during the first seven months compared to the same period last year.
Tea exports fell by 9.24% to $ 694.9 million from January to July 2022 compared to the corresponding period a year earlier. Exports of all the subcategories of the tea sector, except for Tea Bags; Tea packets (-7.99%), Bulk Tea (-10.14%,), Instant Tea (-25.11%), and Green Tea (-35.11%) decreased during the first seven months of 2022 compared to the same period of 2021.
Rubber and Rubber finished products slightly dropped by 1.74% to $ 605.85 million from January to July compared to the same period of 2021, attributed to lower exports of Industrial and Surgical Gloves (-16.8%). However, exports of Pneumatic and Retreated Rubber Tyres and Tubes increased by 7.26% during the first seven months compared to the same period in 2021.
Export performance in major markets
Strong export performance was recorded for the top 10 export markets during the first seven months.
In July 2022, exports to the US — Sri Lanka’s single largest export destination, increased to $ 300.71 million YoY up by 8.86%, whilst the cumulative exports to the US were at $ 1.98 billion – a significant YoY increase of 21.89 % compared to $ 1.63 billion recorded for the same period of 2021.
Exports to the UK, as the second largest trading partner, recorded an increase to $ 602.01 million YoY up by f 14.59%.
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 13.73% to $ 547.4 million.
Although exports to India increased by 16.6% YoY to $ 500.75 million, exports to Pakistan fell by 10.02% to $ 46.65 million during the first seven months compared to the corresponding period of 2021.
Increased exports to India are mainly supported by increased exports of Animal Feed (15.8%), Areca nuts (86.64%), and Textile (35.65%) from January to July 2022.
Export performance in regions
Sri Lanka’s exports to all regions except for CIS countries increased from January to July 2022 compared to the corresponding period of 2021.
During the first seven months of 2022, the breakdown of exports to the top five EU markets which accounted for 80% of Sri Lanka’s total exports to the EU were; Germany $ 450.51 million (up by 7.83%), Italy $ 359.21 million (up by 10.5%), Netherlands $ 233.88 million (up by 0.77%), Belgium $ 186.35 million (down by 0.1 %), and France $ 153.79 million (up by 14.91%).
