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The export sector notched the fifth consecutive month of over $ 1 billion performance in October, sustaining its resilience, despite an unprecedented economic crisis.
As per provisional data released by the Export Development Board yesterday, merchandise exports in October were over $ 1.09 billion a negative growth of 8.18% compared to a year earlier. However, the first 10 months› haul was up 9.33% to over $ 11.07 billion compared to the corresponding period of 2021.
October merchandise exports grew by over 8.2% from a year earlier, mainly driven by apparel and textiles, tea, rubber-based products, coconut-based products, spices and essential oils and fisheries. It said that the impact of the global crisis also affected to decrease in export earnings of major products.
EDB estimated services exports in the first 10 months were $ 1.61 billion, up by 2.4% from a year earlier. The services exports estimated by EDB consist of ICT/BPM, construction, financial services, and transport and logistics.
In 2021, Sri Lanka’s total exports recorded $ 15.12 billion, up by 23% from 2020 sustaining its resilience, despite the COVID pandemic and the economic crisis.
Last year’s performance comes second only to the $ 15.91 billion recorded in 2018. The Government is heavily banking on exports, as it became the only economic contributor generating a fixed inflow of much-needed foreign exchange amidst the ongoing crisis. The Government has assured more support to exporters to reach a $ 20 billion target this year.
Except for coconut-based products, major product sectors such as apparel and textiles, rubber-based products, electronic components (EEC), spices, and concentrates, diamonds, gems and jewellery, food and beverages, seafood, and ornamental fish drove the increased export earnings in August.
Major exports in October
Major product sectors except for gems and jewellery, Electrical and Electronic Components (EEC); export earnings from apparel and textiles, tea, rubber-based products, coconut-based products, spices and concentrates, food and beverages, and seafood sectors decreased earnings in October 2022.
In October, apparel and textile exports fell 5% year-on-year to $ 441.89.
Tea export earnings which made up 11% of merchandise exports fell by 0.76% YoY to $ 108.7 million in October. This was mainly due to the lower export of bulk tea (1.22%).
Export earnings from rubber and rubber finished products have decreased by 6.1% YoY to $ 86.3 million in October, with poor performance in exports of pneumatic and retreated rubber tyres and tubes (6.86%) and export of industrial and surgical gloves (-8.74%).
However, export earnings from EEC increased by 20.53% YoY to $ 46.26 million in October 2022 with a strong performance in exports of insulated wires and cables (12.76%) and other electrical and electronic products (17.2%).
Export earnings from spices and essential oils decreased by 18.95% to $ 36.39 million in October 2022 compared to the same period a year earlier due to the poor performance in the export of cinnamon (-19.44%) and pepper (-32.7%).
On monthly analysis, except kernel products export earnings of fibre products and shell products categorised under the Coconut based products increased by 19.67% and 19% respectively in October compared to October 2021.
Export earnings from Seafood decreased by 20% to $ 19.56 million in October compared to the corresponding period a year earlier. Except for crabs, export earnings from frozen fish, fresh fish, shrimps and other edible fish decreased by 14.62%, 21.44%, 52.16% and 31.46% respectively in October 2022.
However, export earnings from ornamental fish increased by 8.98% to $ 1.82 million in October compared to the same period a year earlier.
Major exports during the first 10 months
Major Exports during the period of January –October 2022
Major product sectors except for tea, rubber-based products and spices and concentrates; earnings from export of apparel and textiles, coconut-based products, EEC, gems and jewellery and food and beverage sectors recorded an increase.
Apparel and textile exports increased by 14.04% to $ 5,004.58 million during the period of January to October 2022 compared to the same period of 2021. Except for made-up clothing accessories (-1.21%), yarn (-11.17%), made-up textile articles (-7.36%) and textile floor (-18.53%); exports of other subcategories of the apparel and textiles sector increased.
For the period from January to October 2022, export earnings from coconut and coconut-based products expanded by 3.53% to $ 710.97 million. Earnings from all the major categories of coconut-based products increased during the period of January – October 2022 compared with the corresponding period of 2021 due to the improved performance in the export of cocopeat, brooms and brushes and activated carbon.
Earnings from the export of EEC increased by 15.04% to $ 400.32 million from January to October 2022 compared to the corresponding period of 2021. Export of insulated wires increased by 17.97% in during the first 10 months of 2022 to $ 68.79 million compared to the corresponding period of 2021.
In addition, the export of printed circuits, switches/ boards and panels, electrical transformers and other electrical and electronic products increased by 53.87%, 12.31%, 9.85%and 15.39% respectively during the period from January to October 2022 compared with the corresponding period of the previous year.
Export earnings from Seafood increased by 5.83% to $ 224.88 million during the first 10 months, compared to the year 2021 due to the better performance in all the subcategories except lobsters; frozen fish (2.31%), fresh fish (17.25%) and shrimps (8.59%).
In addition, earnings from the export of ornamental fish increased by 11.92% to $ 17.37 million during the period from January to October compared to the corresponding period of the year 2021.
However, export earnings from rubber and rubber finished products decreased by 2.53% to $ 874.18 million in the first 10 months compared with the same period of 2021 attributed to lower exports of industrial and surgical gloves (-16.48%). Despite the decrease recorded in rubber exports, earnings from exports of pneumatic and retreated rubber tyres and tubes increased by 6.21% during the period of January to October 2022 compared with the same period of 2021.
In addition, export earnings from Tea decreased by 4.59% to $ 1,045.84 million during the period from January to October 2022 compared with the corresponding period of 2021. Exports of all the subcategories of the tea sector except tea bags; tea packets (-4.99%), bulk tea (-4.53%,), instant tea (-12.34%) and green tea (-31.63%) decreased during the first 10 months compared with the same period of 2021.
Export earnings from spices and essential oils decreased by 14.79% to $ 311.63 million in the period from January to October 2022 compared to the year 2021 due to the poor performance in all the sub-categories; cinnamon (-4.07%), pepper (-8.71%), cloves (-58.1%), nutmeg and mace (-2.06%), cardamom (-62.07%) and essential oils (-27.28%).
Sri Lanka’s export performance in major markets
Strong Export Growth was recorded for the top 15 export markets from the period of January to October 2022.
In October 2022, exports to the US ─ Sri Lanka’s single largest export destination – was $ 239.98 million YoY down by 17.61%, whilst the cumulative exports to the US were over $ 2.82 billion, a significant YoY increase of 18.73% compared to $ 2.17 billion recorded for the same period of 2021.
Exports to the UK, as the second largest trading partner, recorded an increase to $ 829.15 million YoY up by 7.96%.
Exports to FTA partners
In October 2022, exports to Free Trade Agreement (FTA) partners which represented 8.4% of Sri Lanka’s total merchandise exports grew by 8.36% YoY to $ 91.63 million. Increases in exports were recorded to India, (up by 7.9% to $ 83.82 million) and Pakistan (up by 12.7% to $ 7.81 million) due to growing exports of Petroleum oils.
During the period of January to October 2022, exports to FTA partners accounted for 7% of total merchandise exports with an increase of 10.02% and amounting to $ 792.16 million.
Although Exports to India have increased by 12.61% YoY to $ 725.85 million, exports to Pakistan have decreased by 12.08% to $ 66.31 million during the period compared to the corresponding period of 2021.
Growth in exports to India was mainly supported by increased exports of animal feed (11.4%), areca nuts (61.66%), woven fabrics (67.3%) and wood pulp (29.77%) from January-October 2022.
Sri Lanka’s export performance in regions
On a region-wise comparison exports to all regions except ASEAN and CIS countries increased from January to October 2022 compared with the corresponding period of 2021.
The US and EU accounted for 48% of total Sri Lanka’s merchandise exports.
During the period of January to October 2022, the breakdown of exports to the top five EU markets which accounted for 78% of Sri Lanka’s total exports to the EU were; Germany $ 633.81 million (up by 3.96%), Italy $ 535.84 million (up by 11.5%), Netherlands $ 353.26 million (up by 2.02%), Belgium $ 266.84 million (down by 2.3%) and France $ 223.48 million (up by 12.73%).
