Sri Lanka’s exports have surpassed the $ 1 billion mark in July after six months time period where a similar achievement was only recorded in January during this year.
Export Development Board (EDB) Chairman Prabhash Subhasinghe mentioned, “We have witnessed a phenomenal increase in exports in July 2020 with a new record for the year. Sri Lankas strategic location, its reliable manufacturing and export base and proactive and rapid action by the Sri Lankan Government to control Covid 19 have fulfilled our global customers needs. This is the reason for our remarkable recovery in exports, compared to when the crisis hit us. However, we need to be cautiously optimistic as we move towards year end due to the possible resurgence of Covid 19 in the US and European markets.”
As per the Customs statistics, earnings from merchandise exports recorded double digit growth rate of 11.31% in July 2020 to US$ 1,090.18 Mn compared to July 2019. Moreover,earnings from merchandise exports in July 2020 increased by 20.3 % compared with the value recorded in June 2020.
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 (21.17%), South Asia(11.47%) and Middle East (8.91%) in July 2020 compared to July 2019.
Being the largest single export destination, United States of America has absorbed US$ 256.09 Mn worth of exports in July 2020 recording a 5.67% increase in comparison to US$ 242.36 Mn absorbed in June 2020.
Export Performance of Major Sectors in July 2020
Export earnings from tea in July 2020 which made up 12% of merchandise exports increased by 17.63% y-o-y to US$ 130.93 Mn and the export volume was also increased by 11.24% in July 2020 compared to July 2020. In addition, export earnings from tea recorded 1.39% increase in June 2020 in comparison to June 2019. The expansion was mainly due to higher demand for tea from Turkey and Russia.
Earnings from all the major categories of Coconut based products increased in July 2020 compared with July 2019 and a notable performance in export of Coconut Oil, Cocopeat & Activated Carbon.
In addition, Export earnings from Rubber & Rubber finished products have increased by 8.78% y-o-y to US$ 85.08 Mn in July 2020 with strong performance in exports of Gaskets, Washers, Seals etc. of Hard Rubber. However exports of Industrial & Surgical Gloves of Rubber have slightly declined by 1.73% y-o-y to US$ 43.74 Mn in July 2020.
Export earnings from Spices and Essential Oils have increased significantly in July 2020 compared with June 2019 with significant increase in cinnamon (63.6%) & pepper (46.3%). Further export earnings from Spices and Essential Oils were increased by 30 % in July 2020 in comparison to June 2020.
Meanwhile, export earnings from Electrical & Electronic Products (-1.47%), seafood(-9.42%) reorded a decline during the month of July 2020 compared with July 2019.
Earnings from exports of Apparel & Textiles and Rubber & rubber-based products grew significantly during the month of July 2020 owing to higher demand for personal protective equipment (PPE) such as face masks, protective suits, surgical gloves, etc.,. PPE related exports have recorded US$ 115.1 Mn in July 2020.
Export earnings from Apparel & Textiles increased by16.16 % to US$ 467.04 Mn during the month of July 2020 compared with US$ 402.04 Mn recorded in June 2020. However, 1.37% decline recorded in July 2020 in comparison to July 2019.
January – July 2020
Total export earning for January to July 2020 was US$ 5,452.53 Mn compared to US $ 6,909.12 Mn recorded in a similar period of the previous year – a decline of 21.08 %. However the gap created due to covid in April 2020 is further decreased.This is a 72.5% achievement of Revised Merchandise Export Target of US$ 7,521 Mn in 2020.
Major Exports such as Apparel & Textiles (US$ 2403.70 Mn), Tea (US$ 702.59Mn) and Coconut & Coconut Based Products (US$ 356.39Mn) and Rubber & Rubber based products (US$ 434.25Mn) recorded decrease of 25.49%, 11.76%, 18.88% and 3.77% respectively during Jan-July 2020 compared to the similar period of previous year. Petroleum & Other Export crops recorded positive growth rates during the period.
The export sectors that shows a positive growth at disaggregate level includes export of Gaskets, Washers, Seals etc. of Hard Rubber, Coconut cream, Coconut Milk, Coconut Vinegar, Coconut Shell Charcoal, Mattress Fiber, Pineapples, Arecanuts, Tamarind, Ginger, Essential oils, lemons, Sweat Potatoes and Lentils etc.
Sri Lanka’s Trade Performance in Major Markets
The top five export destinations during the period Jan-July 2020 were United States of America (US$ 1,403.54 Mn), United Kingdom (US$ 461.7 Mn) India (US$ 339.4 Mn), Germany (US$ 312.6 Mn) and Italy (US$ 233.5 Mn).
In addition, Exports to EU Region recorded an increase of 21.67% to US$ 356.64 Mn in July 2020 compared with July 2019. Meanwhile, exports to United Kingdom as the largest trading partner in the EU Region recorded an increase of 18.66 % to US$ 100.1 Mn in July 2020 compared with July 2019. In addition exports to UK has increased by 53.08% in July 2020 compared to June 2020.
Further, exports to Germany, Itally, Belgium, Netherlands, Canada, China, Japan and Turkey have aslo shown better performance during this period.
Export of Services
The services exports estimated by EDB which includes ICT/BPM, Construction, Financial services, Transport & Logistics and Wellness Tourism show exports of US $ 2,044.6 Mn for te period of Jan-July 2020 compared to US$ 2,364.7 Mn recorded in the corresponding period of the previous year. However, estimated service exports declined by 13.53% during the period of Jan-July 2020 compared with the corresponding period of previous year.
Policy & Strategic Planning Division - 14.08.2020