First five month exports top $ 4.1 b

By Cheranka Mendis

Sri Lanka export earnings reached $ 4.1 billion at the end of the first five months of the year riding on a growth rate of 42.18% over the corresponding period in 2010.

With the biggest boost coming from the much favoured textile and garment sector with a 55% increase worth USD 1,831 million, the Government is now settling itself to enjoy a 25% growth rate by the end of the year.

The export sector which has shown positive stimulation during the year registered export earnings of US$ 782 million in May, scaling on a 27.2% increase over the same month previous year. Chairman of Export Development Board Janaka Rathnayake told the Daily FT that the growth momentum achieved thus far could slow its pace in the next two months only to pick up speed and drive full throttle by end September. The slow down, an annually expected one due to global performance over the years will not hinder the growth pattern the local exports have adopted to so far, he said.

Rathnayake stated that the exports to EU reached US$ 1.5 billion during the January to May period while exports worth US$ 88.5 million headed towards the U.S.

The percentage increase in the said continents was 56.7% and 42.9% respectively. Third among Sri Lanka’s top five exporters is Belgium which managed to buy goods and services worth of US$ 222.75 million; while Italy (US$ 221.25 million) and India (US$ 219.05 million) trail behind in the fourth and fifth places.

Quoting provisional data received from Sri Lanka Customs, Rathnayake stated that the traditional export items such as tea brought in a revenue of US$ 583.9 million within the period while natural rubber brought in US$ 106 million while coconut earned US$ 138.33 million. Fisheries products recorded a growth of 30% valued at US$ 94.36 million and diamonds gems and jewellery exports brought in US$ 232 million. On the manufacturing front, when considering all products, exports in the sector recorded a growth of 52% to US$ 970.14 million.

“The World Bank has projected that South Asia’s growth of 7.9% by 2013 will be led by India, Sri Lanka and Bangladesh. The IMF has declared that Sri Lanka’s exports recorded a huge growth in Q1 of the year and attributed the growth in apparel which is the key product, to the shifting suppliers to the country due to the Egypt unrest. The unrest is expected to be a permanent one thereby fuelling our growth,” Rathnayake said.



The apparel sector with its US$ 1,831 million lead has sent the bulk of its products to the U.S. and EU during the five month period starting January, reaching US$ 673 million and US$ 945 million denoting growths of 37.3% and 66.9% respectively.

He asserted that even though the U.S. and UK held the lead position in country’s composition of exports, the Board was now looking at extending its presence in markets such as Singapore, Hong Kong, Indonesia, China and Pakistan. “We are focusing on these areas in the future shifting of our market base to the region.” Statistics given out by the EDB shows exports to Singapore have grown by 61% (US$ 97.2 million), Hong Kong 48%, Indonesia 15% (US$ 50.5 million), China 64% (US$ 43.1%) and Pakistan 31% (US$ 33.58 million).  

However the hold on the UK and U.S. is as important as it was before despite market sentiments driving the thought of moving away from the West towards the region. The Chairman asserted that a major part of the revenue was generated via garments and textiles from these areas i.e. UK and U.S. and that it was important to hold on to it in the future. “We need to retain our market. We are a country that will not produce in a mass scale. Since we produce high quality products and services the prices are at a premium and these are the countries that can pay that amount,” he said.

The new region to look at — the Asian region — is a different composition altogether Rathnayake claimed. The top five products exported to the U.S. are garments, pneumatic and retreaded rubber tyres and tubes, industrial and surgical gloves, gems and gaskets, washers of hard rubber, while the top five for EU are garments, diamonds, pneumatic and retreaded rubber tyres and tubes, tea packets and frozen food. “But when it comes to India the top five products exported from Sri Lanka are petroleum products, cloves, insulated wires and cables, refrigerators & freezers, and woven fabric. For Pakistan the key products are natural rubber, betel leaves, technically specified rubber, desiccated coconuts and pneumatic and retreaded rubber tyres and tubes,” he said, “this shows how different our products will be and how we need to diversify our products to fit into the market pattern.”

 

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