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Wednesday, 14 October 2020 02:44 - - {{hitsCtrl.values.hits}}
EDB Chairman Prabhash Subasinghe
Despite global and local challenges, Sri Lanka’s merchandised exports saw a continuous rise for the last four months and September has surpassed $ 1 billion mark once again, proving its resilience and rebound.
“I am extremely pleased to see $ 1 billion of exports in September. I salute the entire export community, our resilient businesses and all employees in the export sector for this remarkable performance. It is the 3rd time this year we have seen a year-on-year (YOY) increase of merchandise exports,” Export Development Board (EDB) Chairman Prabhash Subasinghe said. Sri Lanka recorded steady recovery in exports, as against $ 906 million in June, $ 1.09 billion in July and $ 947 million in August. Soon after COVID-19 pandemic erupted, exports in April fell to $ 277.4 million.
However, he expressed concerns about the recent escalation of COVID-19 in Sri Lanka, but was hopeful of a swift recovery and a stable level of business continuity.
“Our businesses must continue to be resilient whilst facing the unknown and must have strong COVID-19 preventive measures in order to bring in the much needed foreign currency for Sri Lanka,” Subasinghe said.
As per the Customs statistics, earnings from merchandise exports recorded a positive growth of 5.16% in September 2020 to $ 1.01 billion compared to $ 952.1 million in the same period last year. This strong performance is consistent with the gradual lifting of restrictions due to COVID-19 pandemic within the country and globally.
However, on a cumulative basis, export earnings from January to September dropped by 16.58% to $ 7.4 billion compared to $ 8.9 billion recorded in the same period a year earlier.
“The revised export target for 2020 is $ 13.39 billion and of that we expect $ 9.57 billion from merchandise exports and $ 3.82 billion from services exports. During the first nine months, earnings from exports recorded $ 9.69 billion, including the estimated services data for July to September. Thus achieving 72.4% from the revised export target,” the EDB said.
Before COVID-19 pandemic, the EDB set an export target of $ 18.5 billion for 2020, up from $ 16.14 billion achieved in 2019. However, in early April the EDB decided to revise down the export forecast by a hefty 42% to $ 10.75 billion for the year. Later, considering the ‘v-shaped’ growth from June onwards, EDB revised the export target upwards to $ 13.39 billion.
Further, the EDB said earnings from merchandise exports and services exports achieved 77.33% and 60.06% respectively from January to September 2020.
Increases in exports in September were recorded from; European Union region (20.19%), CIS Countries (19.59%) and African Region (56.4%) in September 2020, compared to September 2019. Moreover, earnings from merchandise exports in September 2020 increased by 5.65 % compared with the value recorded in August 2020.
Export earnings from Apparel and Textiles declined by 3.75% to $ 431.87 million during September compared to $ 448.68 million recorded the same period last year and a drop by 1.48% in September compared to August 2020. Despite the decline in the sector, earnings from exports of made-up textiles and other textiles increased by 88.86% and 49.24% respectively in September 2020 compared to September 2019.
Earnings from tea which consists 12% of total exports increased by 3.3 % YOY to $ 113.99 million, but the export volume decreased by 2.82% in September 2020 compared to September 2019. In addition, export earnings from tea recorded a 10.7% increase in September as against August 2020. The increase was mainly due to higher demand for tea from Turkey, Russia and Chile.
In addition, Rubber and Rubber-finished-products have increased by 10.54 % YOY to $ 80.01 million in September 2020 due to the better performance in exports of Pneumatic and Retreated Rubber Tyres and Tubes (5.19%), Industrial and Surgical Gloves of Rubber (22.7%) and Gaskets, Washers, Seals etc. of Hard Rubber (11.74%).
However, exports of Rubber Plates, Sheet Rods of Vulcanized or Unhardened Rubber and Hygienic or Pharmaceutical Articles have dropped by 12.56 % and 30.77% respectively in September compared to same period in 2019.
Earnings from all the major categories of Coconut-based-products increased in September YOY. Coconut Oil, Coconut Milk Powder, Coconut Cream and Liquid Coconut Milk categorised under the Coconut Kernel Products earnings increased by 122.94%, 3.64%, 87.57% and 130.48% respectively in September 2020 compared to same period a year earlier. Being the largest contributor to Coconut based sector, Coco Peat, Fibre Pith and Moulded products which is categorised under the Coconut fibre products increased by 28.23 % to $ 13.4 million in September 2020 from a year earlier.
Activated Carbon export earnings, which is categorised under the Coconut shell products increased by 19.22% in September 2020 compared to September 2019.
Export earnings from Spices and Essential Oils have increased significantly by 24.14% to $ 38.93 million in September 2020 compared to $ 31.36 million recorded in September 2019 with significant increase in export of cinnamon (50.06%).
Electrical and Electronic Components (EEC) export earnings also increased by 13.42% to $ 37.01 million in September 2020 compared to the same period last year. Earnings from export of EEC increased by 12.39% to $ 37.01 million in September compared to August 2020. Export of Switches, Boards and Panels increased by 38.06% YOY to $ 4.97 million and export of other EEC products increased by 16.61% YOY to $ 19.24 million in September 2020.
The export performance in the first nine months of major exports such as Apparel and Textiles ($ 3.3 billion), Tea ($ 919.56 million), Rubber and Rubber-based-products ($ 586.58 million), Coconut and Coconut-Based-Products ($ 490.24 million), Food and Beverages ($ 275.82 million), Petroleum Products ($ 257.14 million) and other Export crops ($ 60.77 million) recorded positive growth rates during the period. However, Spices and Essential Oils recorded decrease of 21.54%, 10.32%, 14.01% and 0.4% respectively during the first nine months compared to the same period a year earlier.
The export sectors that shows a positive growth at disaggregate level includes export of Industrial and Surgical Gloves of Rubber, Coconut Oil, Coconut Cream, Liquid Coconut Milk, Coconut Flour, Coconut Vinegar, Mattress Fibre, Coco Peat, Fibre Pith and Moulded products, Brooms and Brushes, Carpets, Mats, Floor Coverings, Coconut Shell Charcoal, Cinnamon, Essential oils, Tamarind, Beatle leaves, Arecanuts, Made-up textile articles, Processed Vegetables, Fruits and Juices, Sugars, Sugar Confectionery and Bakery Products, Rice, Black Gram, Lentils, Inorganic Chemicals, Gloves, Mitts and Mittens (Plastic Products), Natural Salt and Petroleum Gases.
Earnings from export of PPE (Personal Protective Equipment) related products increased by 42.91% to $ 636.67 million in the nine months compared to $ 445.51 million recorded in the corresponding period of 2019. The strong performance was mainly due to the increased exports of other made-up articles (HS 630790) and Articles of apparel and clothing accessories of plastics (HS 392620).
The top five export markets during the nine months were the US ($ 1.9 billion), the UK ($ 664.21 million), India ($ 453.67 million), Germany ($ 430 million) and Italy ($ 330.24 million). These markets absorbed over 50% of exports from January to September 2020.
Being the largest single export destination, the US has absorbed $ 239.98 million worth of exports in September, a decline of 5.53% compared to $ 254.04 million in corresponding period of 2019. Also, exports to the US decreased by 19.05% in the first nine months of 2020 in compared to the same period in 2019.
Exports to the UK, as the largest trading partner in the European Union (EU) region recorded an increase of 38.77% to $ 114.74 million in September 2020 compared to the same period a year earlier. Further, exports to Germany, Italy, Belgium, Netherlands, Canada, China, Japan and Turkey have also shown better performance during the month of September 2020.
Exports to EU region recorded an increase by 20.19% in September 2020 compared to the same period in 2019 In addition, exports to CIS, African and Middle East Countries have also recorded an increase by 19.59%, 56.4% and 0.83% respectively in September compared to same period a year earlier.
The services exports estimated by EDB which include; ICT/BPM, Construction, Financial services and Transport and Logistics recorded a culminate earning of $ 2.3 billion during the first nine months of 2020 compared to $ 2.9 billion recorded in the same period of 2019. The estimated service exports also declined by 21.29% from January to September 2020 compared to corresponding period of 2019.
