Sri Lanka’s exports during the month of August 2020 recorded a downfall of 19.2% to US$ 947.7 Mn as compared to the value of US$ 1,033.3 Mn recorded same month of last year.
Despite the decline in exports, some products like Coconut based products, Electricals & Electronic Components, Spices and Essential Oils and Food & Beverages recorded a positive growth of 22.88%, 8.32%, 19.4% and 11.45% respectively, during the month of August 2020 as compared to August 2019.
Export Development Board (EDB) Chairman Prabhash Subasinghe said, It is remarkable to see another month of almost a billion dollars of exports. However, we are being watchful of the months ahead whilst understanding the impact of COVID-19 on our key markets of US and Europe. We also need to focus on export product and market diversification which is seriously lacking today. Whilst appreciating that the US and the EU are the largest markets, we need to now create a significant export market in Asia including China. The China FTA will certainly help in this regard. Export product diversification must simultaneously happen so that we can create more billion-dollar industries for Sri Lanka.”
Graph I : Monthly Export Performance 2019, January-August 2020
Sources : Central Bank of Sri Lanka, Sri Lanka Customs & Sri Lanka Export Development Board
Export Performance of Major Sectors in August 2020
Export earnings from Apparel & Textiles declined by 11.99 % to US$ 438.34 Mn during the month of August 2020 compared with US$ 498.03 Mn recorded in August 2019. In parallel, 6.15% decline recorded in August 2020 in comparison to July 2020. Despite the decline in the sector, earnings from exports of made-up textiles increased by two hundred-fold in August 2020 in comparison to August 2019.
In addition, Export earnings from Rubber & Rubber finished products have decreased by 2.71 % y-o-y to US$ 72.53 Mn in August 2020. due to bearish performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes, Gaskets, Washers, Seals etc. of Hard Rubber. However, exports of Industrial & Surgical Gloves of Rubber have increased by 36.19 % y-o-y to US$ 23.07 Mn in August 2020.
Export earnings from tea in August 2020 which made up 12% of merchandise exports declined by 13.27% y-o-y to US$ 102.97 Mn and the export volume was also declined by 16.01% in August 2020 compared to August 2019. The decline was mainly due to lower demand for tea from Iran and Iraq.
Earnings from all the major categories of Coconut based products increased in August 2020 compared with August 2019. Earnings from Liquid Coconut Milk and Coconut Oil categorized under the Coconut Kernel Products increased by 89.15% and 114.38% respectively. Being the largest contributor to Coconut based sector, Coco Peat, Fiber Pith & Moulded products which categorized under the Coconut fibre products increased by 20.71% to US$ 13.52 Mn in August 2020 in comparison to August 2019. Earnings from Activated Carbon, which categorised under the Coconut shell products increased by 7.18% in August 2020 compared to August 2019.
Export earnings from Spices and Essential Oils have increased significantly by 19.4% to US$ 39.88 Mn in August 2020 compared with the value of US$ 33.4 Mn recorded in August 2019 with significant increase in export of cinnamon (53.55%).
Meanwhile earnings from export of Electrical and Electronic Components (EEC) increased by 8.25% to US$ 32.93 Mn in August 2020 in comparison to August 2019. Also, earnings from export of EEC increased by 2.39% to US$ 32.93 Mn in August 2020 compared with July 2020. Export of Switches, Boards & Panels increased by 14.10% in y-o-y to US$ 4.29 Mn in August 2020 and export of other EEC products increased by 19.77 % in y-o-y to US$ 17.63 Mn in August 2020.
Export Performance during the period of January – August 2020
Total export earnings for January to August 2020 was US$ 6,400.21 Mn compared to US $ 7,921.16 Mn recorded in a similar period of the previous year – a decline of 19.2 %. This shows an improved performance compared with the decline of 21.08% recorded in January to July 2020.
Major Exports such as Apparel & Textiles (US$ 2,842.04 Mn), Tea (US$ 805.57 Mn) and Coconut & Coconut Based Products (US$ 421.70 Mn) and Rubber & Rubber based products (US$ 506.75 Mn) recorded decrease of 23.69%, 11.96%, 0.43% and 16.91% respectively during January - August 2020 compared to the similar period of previous year. Petroleum Products, Food & Beverages, Chemical & Plastic Products and Other Export crops recorded positive growth rates during the period.
The export sectors that shows a positive growth at disaggregate level includes export of Industrial & Surgical Gloves of Rubber, Coconut Oil, Coconut cream, Liquid Coconut Milk, Coconut Flour, Coconut Vinegar, Coconut Shell Charcoal, Mattress Fiber, Areca nuts, Ginger, Essential oils, Made-up textile articles, Processed Food , Mitts & Mittens(Plastic Products).
Earnings from export of PPE (Personal Protective Equipment) related products increased by 38.32% to US$ 541.94 Mn in January to August 2020 compared with the value of US$ 391.79 Mn recorded in the corresponding period of previous year. The strong performance was mainly due to the increased exports of Other made-up articles (HS 630790) and Articles of apparel and clothing accessories of plastics (HS 392620).
Sri Lanka’s Trade Performance in Major Markets
The top five export destinations during the period Jan-August 2020 were United States of America (US$ 1,652.17 Mn), United Kingdom (US$ 552.46 Mn) India (US$ 396.96 Mn), Germany (US$ 371.05 Mn) and Italy (US$ 280.51 Mn) absorbed over 50% of exports recorded in the period.
Being the largest single export destination, United States of America has absorbed US$ 248.63 Mn worth of exports in August 2020 recording a decline of 11.2 % in comparison to US$ 280 Mn absorbed in August 2019. Also, exports to United States of America decreased by 20.69 % in January-August 2020 in comparison to January-August 2019.
Exports to United Kingdom as the largest trading partner in the EU Region recorded an increase of 8.69 % to US$ 90.76 Mn in August 2020 compared with August 2019.
Further, exports to Italy, Canada, China, Japan and Turkey have also shown better performance during the month of August 2020. Exports to China grew significantly by 34.47% in August 2020 led by earnings from export of Apparel, Tea in Bulk and Activated Carbon.
Export of Services
The services exports estimated by EDB which includes ICT/BPM, Construction, Financial services and Transport & Logistics show exports of US $ 2,224.02 Mn for the period of January to August 2020 compared to US$ 2,584.67 Mn recorded in the corresponding period of the previous year. However, estimated service exports declined by 13.95 % during the period of January to August 2020 compared with the corresponding period of previous year.
Policy & Strategic Planning Division - 12.09.2020