April exports plunge to lowest in two years

• Apparel exports down by 2%
• Export of tea declines for seventh consecutive month
• Dip in seafood exports persists since October 2014

Country’s exports in April plunged to their lowest level in two years, widening the trade deficit further despite modest growth in imports.

According to Central Bank data released yesterday, exports in April amounted to $ 708 million, the lowest monthly figure after April 2013 and down by 7.4% from a year earlier. 

“The reductions recorded in exports earnings from tea, petroleum products, seafood, rubber products and textiles and garments respectively contributed for the drop in exports during the month,” the Central Bank said. 

On a cumulative basis, export earnings during the first four months of 2015 declined marginally by 0.3%, year-on-year, to $ 3.57 billion.

In April, tea exports, which were severely affected by the lower demand from Russia and Middle East, declined for the seventh consecutive month in April 2015, recording a drop of 12.7% over the corresponding month of 2014. 

Tea exports to Russia and the Middle East declined by 39.0% and 5.5% respectively, during the first four months of 2015 compared to the corresponding period in 2014. Earnings from petroleum product exports declined by 42.7%, year-on-year, in April 2015 as a result of around 40% price reduction and 6.6% volume drop recorded in bunker fuel exports. 

Sea Food exports which dropped continuously from October 2014, declined further in April 2015, recording a 41.2% reduction compared to the corresponding month in 2014 mainly due to a 68.3% decline in seafood exports to the EU market, the main seafood market of Sri Lanka. 

Sea food exports from Sri Lanka to the EU market were banned with effect from 13 January 2015. 

In line with the significantly low raw rubber prices prevailing in the international market, exports of rubber products also declined significantly by 16.2% in April 2015, reflecting a noteworthy decline in the export of rubber tyres. Export earnings from textiles and garments, which account for 46.7% of total exports, declined by 2.0% during the month reflecting a reduction in exports to the EU market. 

According to the Central Bank, in the first four months the leading markets for merchandise exports were the USA, UK, India, China and Germany accounting for about 51% of the total exports

Central Bank also said despite the lower expenditure on imports of petroleum products, total import expenditure in April 2015 increased by 3.2% to $ 1,490 million mainly due to lower imports recorded in April 2014. 

The growth in imports was led by personal motor vehicles, followed by machinery and equipment and transport equipment. 

Import expenditure on fuel declined by 32.8% to $ 213 million in April 2015, due to non-importation of crude oil during the month and about 38.5% decline recorded in the international prices of refined petroleum products. 

Furthermore, the import expenditure on wheat and maize also declined significantly due to 83.9% decline in volume of wheat imports, compared to higher imports recorded in April 2014. Higher expenditure on personal vehicle imports, particularly motorcars which increased by more than 90%, contributed mainly for the increase in imports. 

Machinery and equipment imports, the second largest contributor for the import growth, increased by 23.6% during the month, mainly due to higher imports of engineering equipment. Imports of transport equipment increased by more than 100%, contributing significantly to the growth in imports. 

On a cumulative basis, expenditure on imports during the first four months of 2015 increased marginally by 1.5%, year-on-year, to $ 6,283 million led mainly by consumer goods imports followed by investment goods imports. 

During the period from January to April 2015, the main import origins were India, China, Japan, UAE and Singapore accounting for about 61% of the total imports.

The deficit in the trade account in April 2015 widened by 15.1% to $ 783 million in comparison to $680 million in April 2014. On a cumulative basis, trade deficit during the first four months of 2015 increased by 3.9% to $ 2.7 billion.