Sri Lanka’s merchandize exports have surpassed the $ 1 billion mark in September after July during this year. Export Development Board (EDB) Chairman Prabhash Subasinghe said, “I am extremely pleased to see $1 Billion of exports in September. I salute the entire export community, our resilient businesses and all employees in the export sector for this remarkable performance. It is the 3rd time this year we have seen a year on year increase of merchandise exports. However, we are concerned about the recent escalation of COVID-19 in Sri Lanka but hopeful of a swift recovery and a stable level of business continuity. Our businesses must continue to be resilient whilst facing the unknown and must have strong COVID-19 preventive measures in order to bring in the much-needed foreign currency for Sri Lanka.”
As per the Customs statistics, earnings from merchandise exports recorded a positive growth of 5.16% in September 2020 to US$ 1,001.27 Mn as compared to the value of US$ 952.1 Mn recorded in September 2019. This strong performance is consistent with the gradual lifting of restrictions due to Covid 19 pandemic within the country and globally. Increases in exports were recorded as; Europe Region (20.19%), CIS Countries (19.59%) and African Region (56.4%) in September 2020 compared to September 2019. Moreover, earnings from merchandise exports in September 2020 increased by 5.65 % compared with the value recorded in August 2020.
Graph I : Monthly Merchandize Export Performance 2019, January-September 2020
Sources: Central Bank of Sri Lanka, Sri Lanka Customs & Sri Lanka Export Development Board
Export Performance of Major Sectors in September 2020
Export earnings from Apparel & Textiles declined by 3.75 % to US$ 431.87 Mn during the month of September 2020 compared with US$ 448.68 Mn recorded in September 2019. In parallel, 1.48 % decline recorded in September 2020 in comparison to August 2020. Despite the decline in the sector, earnings from exports of made-up textiles & other textiles increased by 88.86% and 49.24% respectively in September 2020 in comparison to September 2019.
Export earnings from tea in September 2020 which made up 12% of merchandise exports increased by 3.3 % y-o-y to US$ 113.99 Mn but the export volume was decreased by 2.82 % in September 2020 compared to September 2019. In addition, export earnings from tea recorded 10.7% increase in September 2020 in comparison to August 2020. The expansion was mainly due to higher demand for tea from Turkey, Russia and Chile.
In addition, Export earnings from Rubber & Rubber finished products have increased by 10.54 % y-o-y to US$ 80.01 Mn in September 2020 due to the better performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes (5.19%), Industrial & Surgical Gloves of Rubber (22.7%) and Gaskets, Washers, Seals etc. of Hard Rubber (11.74%). However, exports of Rubber Plates, Sheets Rods of Vulcanized or Unhardened Rubber and Hygienic or Pharmaceutical Articles have decreased by 12.56 % & 30.77 respectively in September 2020 in comparison to September 2019.
Earnings from all the major categories of Coconut based products increased in September 2020 compared with September 2019. Earnings from Coconut Oil, Coconut Milk Powder, Coconut Cream and Liquid Coconut Milk categorized under the Coconut Kernel Products increased by 122.94%, 3.64%, 87.57% and 130.48% respectively in September 2020 compared with September 2019. Being the largest contributor to Coconut based sector, Coco Peat, Fiber Pith & Moulded products which categorized under the Coconut fibre products increased by 28.23 % to US$ 13.4 Mn in September 2020 in comparison to September 2019. Earnings from Activated Carbon, which categorised under the Coconut shell products increased by 19.22 % in September 2020 compared to September 2019.
Export earnings from Spices and Essential Oils have increased significantly by 24.14% to US$ 38.93 Mn in September 2020 compared with the value of US$ 31.36 Mn recorded in September 2019 with significant increase in export of cinnamon (50.06%).
Meanwhile, earnings from export of Electrical and Electronic Components (EEC) increased by 13.42% to US$ 37.01 Mn in September 2020 in comparison to September 2019. Also, earnings from export of EEC increased by 12.39% to US$ 37.01 Mn in September 2020 compared with August 2020. Export of Switches, Boards & Panels increased by 38.06% in y-o-y to US$ 4.97 Mn in September 2020 and export of other EEC products increased by 16.61 % in y-o-y to US$ 19.24 Mn in September 2020.
Export Performance during the period of January – September 2020
Total merchandize export earnings for January to September 2020 was US$ 7,401.48 Mn compared to US $ 8,872.57 Mn recorded in a similar period of the previous year – a decline of 16.58 %. However this shows an improved performance compared with the decline of 19.2 % recorded in January to August 2020.
Major exports such as Apparel & Textiles (US$ 3,273.9 Mn), Tea (US$ 919.56 Mn), Rubber & Rubber based products (US$ 586.58 Mn) and Spices and Essential Oils recorded decrease of 21.54%, 10.32%, 14.01% and 0.4% respectively during January - September 2020 compared to the similar period of previous year.
However, export of Coconut & Coconut Based Products (US$ 490.24 Mn), Food & Beverages (US$ 275.82 Mn), Petroleum Products (US$ 257.14 Mn), Other Export crops (US$ 60.77 Mn) 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, Mattress Fiber, Coco Peat, Fiber Pith & Moulded products, Brooms & Brushes, Carpets, Mats, Floor Coverings, Coconut Shell Charcoal, Cinnamon, Essential oils, Tamarind, Beatle leaves, Arecanuts, Made-up textile articles, Processed Vegetables, Fruits & Juices, Sugars, Sugar Confectionery & Bakery Products, Rice, Black Gram, Lentils, Inorganic Chemicals, Gloves, Mitts & Mittens (Plastic Products), Natural Salt and Petroleum Gases.
Earnings from export of PPE (Personal Protective Equipment) related products increased by 42.91% to US$ 636.67 Mn in January to September 2020 compared with the value of US$ 445.51 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-September 2020 were United States of America (US$ 1,892.14 Mn), United Kingdom (US$ 664.21 Mn) India (US$ 453.67 Mn), Germany (US$ 430.0 Mn) and Italy (US$ 330.24 Mn) absorbed over 50% of exports recorded in the period.
Being the largest single export destination, United States of America has absorbed US$ 239.98 Mn worth of exports in September 2020 recording a decline of 5.53 % in comparison to US$ 254.04 Mn absorbed in September 2019. Also, exports to United States of America decreased by 19.05 % in January-September 2020 in comparison to September 2019.
Exports to United Kingdom as the largest trading partner in the EU Region recorded an increase of 38.77 % to US$ 114.74 Mn in September 2020 compared with September 2019.
Further, exports to Germany, Italy, Belgium, Netherlands, Canada, China, Japan and Turkey have also shown better performance during the month of September 2020.
Exports to EU Region recorded 20.19% in September 2020 in comparison to September 2019. Also exports to CIS, African and Middle East Countries have recorded 19.59%, 56.4% and 0.83% respectively in September 2020 compared with September 2019.
Export of Services
The services exports estimated by EDB which includes ICT/BPM, Construction, Financial services and Transport & Logistics show exports of US $ 2,291.8 Mn for the period of January to September 2020 compared to US$ 2,911.7 Mn recorded in the corresponding period of the previous year. However, estimated service exports declined by 21.29 % during the period of January to September 2020 compared with the corresponding period of previous year.
Revised Export Target & Achievement
The revised export target of the Export Development Board for 2020 is US$ 13.39 billion and of that we expect US$ 9.57 billion from merchandise exports and US$ 3.82 billion from services exports. During the period January to September 2020, earnings from exports recorded US$ 9.69 billion including the estimated services data for July to September and 72.4% achieved from the revised export target.
Further, earnings from Merchandise exports and services exports achieved 77.33 % and 60.06% respectively during the period of January to September 2020.
Policy & Strategic Planning Division - 13.10.2020