Business

2020 exports close above revised target

EDB Chairman Suresh De Mel

Amid severe impacts of the Covid-19 pandemic, Sri Lanka’s merchandise exports remained at $ 9.9 billion in 2020, which is a 104% achievement from the revised forecast of $ 9.5 billion, according to the Export Development Board (EDB). 

The EDB set an initial target of $ 13.5 billion for the merchandise export sectors in early 2020. Nevertheless, the EDB in a statement yesterday (20) noted that it remained challenging, requiring not only strong efforts from local enterprises, but also the recovery of global demand amid the complicated Covid-19 situation. 

EDB Chairman Suresh De Mel said: “Amidst the outbreak of Covid-19, a notable rebound of the export sector was recorded from mid-2020 with the proactive measures introduced by the Government. The growth in exports was not only due to the effective prevention and control of the epidemic in Sri Lanka; the commitment of exporter community to support the national economy by bringing in the much-needed foreign currency at a crisis situation is commendable.”

As per the Customs statistics, export earnings in December 2020 amounted to $ 931.65 million, which was 13.75% higher than in November 2020 and 6.91% lower than December 2019. The reduction recorded in the October and November exports was due to the Covid-19 outbreak in Sri Lanka.

Furthermore, adverse global market conditions for Sri Lanka’s key exports were aggravated by the second wave of the Covid-19 pandemic experienced by many countries, leading to low demand for exports of Sri Lanka, according to the EDB. 

When considering the top 10 export markets, other than US, UK, and Germany, increases in exports were recorded in other markets. Exports to China and turkey increased 30.97% and 31.01% in December 2020 compared with December 2019, respectively. Exports to the European Union (EU) (4.86%) and CIS (Commonwealth of Independent States) (5.92%) regions recorded increases in December 2020 compared to December 2019, while exports to other regions had declined.

Total merchandise export earnings for January to December 2020 was $ 9,912 million compared to $ 11,940 million recorded in a similar period of the previous year – a decline of 16.98 %. 

Major exports such as apparel and textiles ($ 4,405.84 million), tea ($ 1,240.94 million), rubber and rubber-based products ($ 816.17 million), and electrical and electronic components ($ 328.28 million) recorded decreases of 21.01%, 7.83%, 9.66%, and 13.87%, respectively during January-December 2020 compared to the similar period the previous year. 

Furthermore, exports of apparel, one of the economic sectors hit hardest by Covid-19, was recorded at $ 4,405.84 million, which was higher than the revised forecast of $ 4.1 billion in April.

However, the export of coconut and coconut-based products ($ 664.54 million), spices and concentrates ($ 335.47 million), and other export crops ($ 67.59 million) recorded positive growth rates during the period.

Earnings from export of PPE (Personal Protective Equipment)-related products increased by 47.42% to $ 876.44 million in January to December 2020 compared with the value of $ 600.45 million recorded in the corresponding period of the 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). As a result of increased export of articles of apparel and clothing accessories of plastics, export of plastic products increased by 139.96% to $ 176.35 million in January to December 2020 compared with the value of $ 73.49 million recorded in the corresponding period of the previous year.

The top five export destinations during the period of January-December 2020 were the US ($ 2,507.2 million), UK ($ 910.47 million), India ($ 604.5 million), Germany ($ 570.39 million), and Italy ($ 457.32 million) absorbed over 50% of exports recorded in the period. 

Being the largest single export destination, the US has absorbed $ 239.73 million worth of exports in December 2020, recording a decline of 15.33% in comparison to $ 283.12 million absorbed in December 2019. 

The services exports estimated by the EDB, which includes ICT/BPM (information communications technology/business process management), construction, financial services, and transport and logistics show exports of $ 2,976 million for the period of January to December 2020 compared to $ 3,888 million recorded in the corresponding period of the previous year, which shows a decline of 23.46%.