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Growth in exports is gathering momentum, with June marking an increase for the fourth consecutive month, with agriculture shipments rebounding, although a continuous dip in apparel sector performance is a concern.
According to the Central Bank, exports earnings in June 2017 expanded year-on-year by 9.6% to $ 987 million.
On a cumulative basis, earnings from exports grew by 5.2% (year-on-year) to $ 5.4 billion during the first half of 2017 as a result of the high income received from the exports of tea, transport equipment, petroleum products and machinery and mechanical appliances. However, export earnings from textiles and garments, gems, diamonds and jewellery and leather, travel goods and footwear declined during the period under consideration.
In June the largest contribution to this growth was from industrial exports (77.1%) followed by agricultural exports (20.6%). Earnings from industrial exports grew by 9.8% (year-on-year) to $ 750 million in June 2017, led by higher exports of transport equipment. Earnings from transport equipment increased by nearly sevenfold to $ 54 million compared to the corresponding month in 2016, owing to the export of two ships to Singapore. In addition, high export earnings from food and beverages, rubber products and petroleum products also contributed significantly to the growth in industrial exports.
Export earnings from food and beverages increased by more than twofold in June 2017.
Exports of rubber products increased by 15.4% (year-on-year) due to growth in all subcategories. Reflecting higher export volumes and prices of bunker and aviation fuel, earnings from the exports of petroleum products increased by 26.7% (year-on-year) in June 2017.
Earnings from agricultural exports at $ 232 million increased by 8.3% (year-on-year) in June 2017 reflecting higher exports of all major categories of agricultural products except coconut and spices. Export earnings from tea increased by 13.7% (year-on-year) to $ 139 million owing to higher prices despite the decline in volume by 9.5%. In line with the high tea prices prevailing in the international market, the average export price of Ceylon tea increased to $ 5.36 per kg in June 2017 from $ 4.27 per kg in June 2016. Earnings from minor agricultural products also increased by 30.8% during the month. Earnings from seafood exports continued their growth in June 2017, benefitting from the removal of the ban on the exports of fisheries products to the EU market. As a result, seafood exports increased by 17.4% (year-on-year) to $ 15 million in June 2017, registering a 101.2% growth in exports to the EU market. However, earnings from exports of spices registered a decline of 12.9% mainly due to the decline in both export volume and the prices of pepper and nutmeg and mace despite a significant increase in the export of cinnamon and cloves.
However, export earnings from textiles and garments, which account for around 40% of total exports, declined by 7.5% (year-on-year) to $ 398 million in June 2017, reflecting a decline in garment exports to the US and EU markets. Earnings from leather, travel goods and footwear and gem, diamond and jewellery also declined during the month.
The leading markets for merchandise exports of Sri Lanka during the first half of 2017 were the US, the UK, India, Germany and Italy accounting for about 50% of total exports.
