May external trade’s key picks: Apparel exports up 2%, gold imports up 44%
Tuesday, 23 July 2013 01:40
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The Central Bank on Friday said in cumulative terms, during the first five months of 2013, expenditure on imports declined by 9.4%, year-on-year, to $ 7,581 million while earnings from exports declined by 6.6%, year-on-year, to $ 3,854 million.
As expenditure on imports declined by around $ 784 million while earnings from exports declined by around $ 270 million, the deficit in the trade balance for the first five months of 2013 contracted by 12.1% on a year-on-year basis to $ 3,727 million. The deficit in the trade balance declined by 1.8%, year-on-year, in May 2013, reversing the increase that was seen in April 2013. On a cumulative basis, the deficit in the trade balance continued to decline for the sixth consecutive month.
Expenditure on imports declined moderately by 1.7%, year-on-year, in May 2013. Although expenditure on imports of fuel, textiles and textile articles, transport equipment, base metals, fertiliser, vehicles and dairy products declined notably, their impact was largely offset by increased expenditure on imports of machinery and equipment, wheat, gold, and building materials. Fuel imports, which account for nearly a quarter of total import expenditure, declined by 14.1% in May 2013, while textiles and textile articles, which account for over 10% of total imports, declined by 18.4%.
Gold imports, meanwhile, increased by 44.4% in May 2013, with the decline in gold prices in the world market remaining supportive of gold imports. Expenditure on imports of machinery and equipment and building materials also increased, by 32.4% and 21.1%, respectively, indicating an expansion of investment in capital build-up. Expenditure on consumer goods imports meanwhile declined marginally by 0.7% as import expenditure on non-food consumer goods declined.
Earnings from exports declined marginally by 1.5% in May 2013, as increased earnings from industrial exports moderated the impact of the decline in earnings from agricultural exports. Export earnings from garments, which have a share of nearly 40% in total exports, increased by 2.1% to $ 319 million in May 2013, thus buoying export earnings.
Exports of transport equipment increased notably in May 2013 as in the previous month, while exports of petroleum products also increased in May 2013.
However, partly reflecting the easing of gold prices in the world market, export earnings from gems, including diamonds, and jewellery declined by 40.5% in May 2013. Food, beverages and tobacco, and rubber products were amongst the other industrial products which contributed notably to the drop in export earnings.
Earnings from agricultural exports declined by 6.8%, as earnings from many categories of agricultural exports declined. Despite tea continuing to fetch favourable prices in international markets, export earnings from tea declined in May 2013, due to the lower volumes of tea exported. Export earnings from rubber and coconut also declined in May 2013. However, earnings from exports of seafood and unmanufactured tobacco recorded significant increases in May 2013.
The Sri Lankan rupee has appreciated against several major international currencies during the year so far due to cross currency exchange rate movements. By 17 July 2013, the rupee had gained value vis-à-vis the pound by 3.2%, the Japanese yen by 11.8%, the Indian rupee by 5.7% and the Australian dollar by 9.4%.
Meanwhile, the rupee, which remained firmly stable against the dollar throughout the year thus far, experienced a transitory depreciation recently. Since the second week of June, the rupee weakened against the dollar owing to greater demand from importers. During the period from end-2012 through 17 July 2013, the rupee fell by 3.2% against the dollar and by 1.9% against the euro. Nevertheless, during the last few days, the rupee showed signs of stabilising as it held its ground against the US dollar.
