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Sri Lanka’s export sector in April failed to sustain the 10-month record achievement of over $ 1billion performance though $ 915 million haul was the highest ever for the month.
As per the provisional data released by the Export Development Board (EDB) yesterday, earnings from merchandise exports increased by 11.87% year-on-year (YoY) to $ 915.3 million in April, but 5.6% down from March figure of $ 1.06 billion.
The EDB Chairman Suresh de Mel said the April merchandise exports grew to an all-time high of $ 915.3 million, surpassing the previous record of $ 799 million achieved in 2021, adding this was mainly due to the increase in export earnings from apparel and textiles, coconut-based products and rubber-based products as well as the sizable increase in electrical and electronic components and seafood exports.
For 10 consecutive months from June 2021 to March 2022, exports recorded over $ 1 billion, proving the private sector’s resilience and becoming the only sector which generates fixed inflow of much needed foreign exchange.
April performance also boosted the first four months export figure to $ 4.16 billion, up 9% from $ 3.8 billion last year. EDB estimated services exports from January to April was at $ 1.19 billion, up by 96.2 % from a year earlier. The services exports estimated by EDB consists of ICT/BPM, construction, financial services and transport and logistics.
Given the challenging economic conditions, the EDB Chief also highlighted that efficient facilitation of the supply of fuel and energy to exporters is imperative to keep the momentum going, whilst appealing for an expedited solution to the current crisis.
In 2021, Sri Lanka’s 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.
“We need to focus on niche markets while consolidating the market share in the US and EU. Export product diversification must simultaneously happen, so that we can create more billion-dollar industries for Sri Lanka which we are lacking today,” de Mel pointed out.
Major Exports in April 2022
Exports of apparel and textiles increased to $ 445.79 million, up by 22.12% YoY in April. The increase was driven by both apparel and textiles.
Tea export earnings which made up 12% of merchandise exports, also increased by 1.49% YoY to $ 80.44 million. Export of bulk tea increased by 9.52% in April compared to the same period a year earlier.
Earnings from Rubber and rubber finished products also increased to $ 71.27 million, up by 10.09% YoY in April 2022, as a result of the notable performance in exports of pneumatic and re-treated rubber tyres and tubes (23.21%).
Products categorised under coconut-based exports — kernel products, fibre products and shell products also increased by 19.21%, 24.33% and 52.43% respectively.
Export earnings from seafood were up by 10.58% to $ 21.22 million in April compared to the same period a year earlier. The expansion was contributed mainly by higher exports of fresh fish (22.79%) and shrimps (119.61%). However, the ornamental fish exports fell by 17.6% YoY to $ 1.03 million in YoY.
The electrical and electronics components (EEC) increased by 27.05% YoY to $ 34.38 million in April 2022 with strong performance in exports of insulated wires and cables (26.56%) and electrical transformers (71.36%).
Spices and essential oils earnings fell by 4.05% YoY $ 23.46 million due to the poor performance in pepper (-49.14%) and cloves (-50.31%). Despite the decline in the sector, earnings from Ceylon Cinnamon, essential oils and oleoresins increased by 50.26%, 19.89% and 542.11% respectively in April compared to the same period a year earlier.
Performance of major exports from January - April 2022
Major product sectors except tea and spices and concentrates, the apparel and textiles, coconut-based products, rubber-based products, electronics and electronic components, food and beverages, seafood and ornamental fish recorded increased exports.
Apparel and textiles exports increased by 13.27% to $ 1,92 billion during the first four months of 2022 compared to the same period a year earlier. Except gloves, mitts and mittens of textile (-2.28%) and made-up clothing accessories (-13.58%), yarn (-39.79%) and made-up textile articles (-4.82%), exports of other subcategories of apparel and textiles sector increased.
Export earnings from rubber and rubber finished products increased by 1.29% to $ 337.58 million in January to April compared to the same period in 2021. The higher exports of pneumatic and retreated rubber tyres and tubes (10.31%). However, exports of industrial and surgical gloves fell by 13.45% YoY in the first four months compared to the same period in 2021.
Tea exports fell by 12.02% to $ 367.21 million in the first four months of 2022 compared to the corresponding period a year earlier. Exports of all the subcategories of tea sector except tea bags; tea packets (-15.3%), bulk tea (-8.79%,), instant tea (-30.87%) and green tea (-20.63%) fell sharply during the first four months in 2022, compared with the same period a year earlier.
Coconut and coconut-based products increased by 11.56% to $ 279.44 million from January to April 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 13.47 % to $ 146.48 million from January to April compared to the corresponding period of 2021. Export of insulated wires increased by 19.94% during the first four months to $ 26.59 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 4.42%, 38.8% and 5.85 % respectively during the first four months, compared to the corresponding period in 2021.
Seafood export earnings increased to $ 88.94 million, up by 17.72% during the first four months compared to same period in 2021, as a result of the better performance in all subcategories — frozen fish (9.42%), fresh fish (46.47%) and prawns (52.22%).
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 four months as well as in April 2022. Five markets out of the top 10 markets recorded positive performance except Italy and China.
In April, exports to the US — Sri Lanka’s single largest export destination, increased to $ 249.02 million YoY up by 21.35%. The better performance was led by an increase in exports of apparel and textile (13.2%), rubber-based products (35.3%) and coconut-based products (62.6%).
The cumulative exports to the US were at $ 1.09 billion – a significant YoY increase of 19.23 % compared to $ 920.6 million recorded during January to April 2021.
Exports to FTA partners
Exports to Free Trade Agreement (FTA) partners during the first four months accounted for 7.2% of total merchandise exports, up by 11.81% to $ 310.57 million.
Although Exports to India increased by 14.2% YoY to $ 282.48 million, exports to Pakistan fell by 7.63% to $ 28.09 million during the first four months compared to the corresponding period of 2021.
Increased Exports to India is mainly supported by increased exports of Animal Feed (14.2%), Textile (14.88%), Pulp of Wood, waste and Scrap of Paper/ Paper Boards (40.70%) and Apparel (13.59%) in January - April 2022.
Export Performance in regions
Sri Lanka’s exports to all regions except for CIS countries increased from January to April 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 April, exports to the EU which comprise 20% of Sri Lanka’s exports, increased by 20% YoY to $ 230.91 million.
Breakdown of exports to the top five EU markets which accounted for 80% of Sri Lanka’s total exports were Germany $ 247.35 million (up by 6.52 %), Italy $ 192.42 million (up by 3.69%), Netherlands $ 130.4 million (down by 3.4%), Belgium $ 95.03 million (down by 9.9%) and France $ 83.74 million (up by 14.49%).
