Exports exuberant

By Cheranka Mendis

Extraordinary growth in exports in the first quarter has encouraged the Government to revise upwards its forecast for full year a top official told the Daily FT yesterday.

Exports in the first quarter of 2011 amounted to $ 2.65 billion, up by 49% over the corresponding period of last year. 

The Export Development Board (EDB) identified the current quarter’s performance as the best ever in history and comes on top of record export earnings of $ 8.3 billion in 2010. The 2011 1Q performance is also healthy as it is on top of $ 2.60 billion achieved in the last quarter of 2010. In the first two months of 2011 exports earnings grew by 52% to $ 1.67 billion. In January Sri Lanka managed to bring in $ 813.44 million, a 72.4% increase from January 2010 and in February it grew by 38.6% to $ 860.3 million. Provisional data has valued March exports as $ 995.18 million

EDB Chairman Janaka Ratnayake told the Daily FT that given the encouraging performance in the first quarter, the 2011 full year exports could reach to US$ 11 billion, higher in comparison to the original forecast of $ 10 billion.

“Export sector has done very well within the first few months and the growth we see today is momentous. The 49% increase in the first quarter is based on provisional March data. The final numbers could indicate an even higher performance in March,” he added.

In 2010 first quarter exports amounted to $ 1.7 billion up by only 7% over 2009 first quarter figure of $ 1.6 billion. In the first quarter of 2008, in which year Sri Lanka achieved the previous best of $ 8 billion export performance, the figure amounted to only $ 1.87 billion.

Ratnayake said current year’s export performance is buoyed by 60% increase in the industrial sector.

According to data released by the EDB agricultural products have grown by 25.72% recording $ 613.05 million in Q1 with tea growing by 20.9%, rubber by 29.9%, coconut by 51.7% and spices by 30.2%. Fisheries have grown by 46.47%.

Industrial products which see the strongest growth leap for the quarter with 60.33% with exports worth $ 1,981.64 million; has seen an increase of 74% in textiles and garments, and 52% growth in diamonds, gem and jewellery.

“Industrial exports which accounts for nearly 75% of total export earnings of the country has grown remarkably contributing to the overall impressive growth rate achieved by the export sector. Almost all key products under the sector recorded a substantial growth rate in Q1 benefiting from the recovery of global demand,” EDB Chief said.

Export earnings from textile and garments amounted to USD 1.2 billion reflecting a 74% growth over the corresponding period in 2010. All categories of textile i.e. woven fabrics (30%), garments (76%) and made-up textile articles (38%) grew significantly.”

Manufacturing sector recorded a 49.75% growth with USD 583.17 million.

Ratnayake also asserted that exports to almost all key markets grew during the first three months whereas in 2010 a negative growth was seen in many of the key markets. Exports to USA, the key export market for Sri Lanka grew significantly by 54% during the Q1. Nearly 76% of the country’s exports to USA consisted of garments which grew markedly by 52% during the period. Except for gems which saw a negative growth of (10%) exports of other main products to USA is said to have grown satisfactorily.

Exports to key European markets i.e. UK (93.73%), Italy (38%), Germany (59%), Netherlands (52%) and France (76%) also grew satisfactorily. “Nearly 385 of the country’s exports during Q1 have been absorbed by the EU region.”

EDB Chairman stated that with market diversification programme now underway and with Asian region being marked as good potential markets, exports to India have been increased by 22% due to increased demand in petroleum products, insulated wires and cables, woven fabrics, confectionary and bakery products and pepper among others export goods. “Exports to India are recorded as USD 134 million,” he said. Exports to Pakistan too increased by 46% led by increasing demand for natural rubber and tyres and tubes.

EDB is now eying China to be a top export destination for Sri Lanka. “China is not yet in the top 10 market for the export trade. It is important to enter this destination as the development is fast paced there and Sri Lanka would be able to benefit immensely from it,” Ratnayake said. “China is relatively a small market for Sri Lanka. Month to Month growth shows a 61% increase in January, 64% in February and the provisional data shows a 98% increase in March. We want to grow this market, effectively and soon.”

 For the first time EDB has taken 10 exporters to the 109th Canton Fair held in south China’s Guangdong province this year. Known as China’s largest trade fair, this year the fair managed to attract 207,000 foreign traders, sources say. “This was the first step for Sri Lanka and China export ties,” he said.

 Next step is the China Kunming Import and Export Commodities Fair, he said. Almost 100 stalls have been given at concessionary prices for the local bodies and will be held from 4-8 June. Some 100 or more exporters will travel to China along with a high profile delegation which will include Minister of Industry and Commerce Rishad Bathiudeen.

EDB is also having discussions with the relevant authorities in India to host a country pavilion in India, he said. The Presidential Export Awards which was written off exporters’ calendars for three years straight will also take place this year in June, Ratnayake said. “Things are still in the planning stage and we will reveal more information as and when we receive them. The Awards is planned to be held on 28 June and the awards are to be distributed by the President himself.”