Business

Exports at $ 1 b for third time in 2020 in September

Sri Lanka’s merchandise 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 third time this year we have seen a year-on-year (YoY) 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 $ 1,001.27 million as compared to the value of $ 952.1 million recorded in September 2019. This strong performance is consistent with the gradual lifting of restrictions due to the 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. 

Export performance of major sectors in September 2020

Export earnings from apparel and textiles declined by 3.75% to $ 431.87 million during the month of September 2020 compared with $ 448.68 million recorded in September 2019. In parallel, 1.48% decline was recorded in September 2020 in comparison to August 2020. Despite the decline in the sector, earnings from exports of made-up textiles and 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% YoY to $ 113.99 million, but the export volume was decreased by 2.82% in September 2020 compared to September 2019. In addition, export earnings from tea recorded a 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 and rubber-finished products increased by 10.54% YoY to $ 80.01 million in September 2020 due to the better performance in exports of pneumatic and retreated rubber tyres and tubes (5.19%), industrial and surgical gloves of rubber (22.7%), and gaskets, washers, seals, etc. of hard rubber (11.74%). However, exports of rubber plates, sheets rods of vulcanised or unhardened rubber and hygienic or pharmaceutical articles have decreased by 12.56% and 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 categorised 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 the coconut-based sector, coco peat, fibre pith, and moulded products, categorised under coconut fibre products, increased by 28.23% to $ 13.4 million in September 2020 in comparison to September 2019. Earnings from activated carbon, which is categorised under 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 $ 38.93 million in September 2020 compared with the value of $ 31.36 million 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 $ 37.01 million in September 2020 in comparison to September 2019. Also, earnings from export of EEC increased by 12.39% to $ 37.01 million in September 2020 compared with August 2020. Export of switches, boards, and panels increased by 38.06% YoY to $ 4.97 million in September 2020 and export of other EEC products increased by 16.61% YoY to $ 19.24 million in September 2020.  

Table 1 : Merchandise export performance

Values in $ millions

Exports of goodsJan.- Sep.

2019

Jan.- Sep.

2020

%

growth

Sep. 2019Sep. 2020%

growth

Apparel 4,172.843,273.9-21.54448.68431.87-3.75
Tea 1,025.35919.56-10.32110.35113.993.30
Rubber-based 682.16586.58-14.0172.3880.0110.54
Coconut-based472.85490.243.6849.3468.5338.89
Spices and essential oils235.34234.41-0.4031.3638.9324.14
Electricals and electronic components291.03246.23-15.3932.6337.0113.42
Food and beverages269.88275.822.2024.0229.6423.40
Diamond, gems, and jewellery 238.51119.01-50.1041.1120.32-50.57
Seafood200.39149.38-25.4615.9416.221.76
Ornamental fish11.369.75-14.171.221.295.74
Vegetables23.8219.68-17.382.772.32-16.25
Fruits31.6627.72-12.443.613.20-11.36
Other export crops24.4860.77148.244.104.499.51
Flowers and foliage14.369.81-31.691.421.16-18.31
Boat building 64.442.01-96.880.690.09-86.96
Petroleum products242.55257.146.0221.5829.8638.37
Others 871.55719.47-17.4590.9122.3434.59
Total merchandise exports8,872.577,401.48-16.58952.101,001.275.16

Sources:  Sri Lanka Customs/Sri Lanka Export Development Board

Export Performance during the period of January-September 2020

Total merchandise export earnings for January to September 2020 was $ 7,401.48 million compared to $ 8,872.57 million 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 and textiles ($ 3,273.9 million), tea ($ 919.56 million), rubber and rubber-based products ($ 586.58 million), and spices and essential oils recorded decreases of 21.54%, 10.32%, 14.01%, and 0.4%, respectively, during January-September 2020 compared to the similar period of the previous year. 

However, export of coconut and coconut-based products ($ 490.24 million), food and beverages ($ 275.82 million), petroleum products ($ 257.14 million), and other export crops ($ 60.77 million) recorded positive growth rates during the period.

The export sectors that show a positive growth at disaggregate level include export of industrial and surgical gloves of rubber, coconut oil, coconut cream, liquid coconut milk, coconut flour, coconut vinegar, mattress fibre, coco peat, fibre pith and moulded products, brooms and brushes, carpets, mats, floor coverings, coconut shell charcoal, cinnamon, essential oils, tamarind, beatle leaves, areca nuts, made-up textile articles, processed vegetables, fruits and juices, sugars, sugar confectionery and bakery products, rice, black gram, lentils, inorganic chemicals, gloves, mitts and mittens (plastic products), natural salt, and petroleum gases.

Earnings from export of PPE (Personal Protective Equipment)-related products increased by 42.91% to $ 636.67 million in January to September 2020 compared with the value of $ 445.51 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).

Sri Lanka’s trade performance in major markets 

The top five export destinations during the period of January-September 2020 were the US ($ 1,892.14 million), UK ($ 664.21 million), India ($ 453.67 million), Germany ($ 430.0 million), and Italy ($ 330.24 million), which absorbed over 50% of exports recorded in the period.

Being the largest single-export destination, the US has absorbed $ 239.98 million worth of exports in September 2020 recording a decline of 5.53% in comparison to $ 254.04 million absorbed in September 2019. Also, exports to the US decreased by 19.05% in January-September 2020 in comparison to September 2019.

Exports to the UK as the largest trading partner in the EU Region recorded an increase of 38.77% to $ 114.74 million in September 2020 compared with September 2019. 

Furthermore, exports to Germany, Italy, Belgium, Netherlands, Canada, China, Japan, and Turkey have also shown better performance during the month of September 2020. 

Exports to the EU Region were recorded at 20.19% in September 2020 in comparison to September 2019. Also, exports to CIS, African, and Middle Eastern countries have been recorded at 19.59%, 56.4%, and 0.83%, respectively, in September 2020 compared with September 2019.

Table 2: Sri Lanka’s top export destinations

Values in $ millions

CountryJan.- Sep.

2019

Jan.- Sep.

2020

%

growth

Sep. 2019Sep. 2020%

growth

United States of America2,337.291,892.14-19.05254.04239.98-5.53
United Kingdom774.69664.21-14.2680.52111.7438.77
India576.35453.67-21.2958.6356.71-3.27
Germany492.13430.00-12.6251.2058.9515.14
Italy398.26330.24-17.0845.1849.7410.09
Belgium260.26212.87-18.2126.3529.6012.33
Netherlands217.40202.48-6.8624.1930.0224.10
United Arab Emirates204.31146.23-28.4319.6118.35-6.43
Canada183.46156.62-14.6320.9023.6813.30
China170.45159.28-6.5515.5720.5431.92
Japan229.59143.48-37.5115.3215.964.18
Turkey157.39153.93-2.2015.4622.3144.31
Other markets2870.992456.33-14.44325.13323.69-0.44
Total 8872.577401.48-16.58952.101001.275.16

Sources: Sri Lanka Customs/Sri Lanka Export Development Board

Table 3: Sri Lanka’s export regions

Values in $ millions

RegionJan.- Sep.

2019

Jan.- Sep.

2020

%

growth

Sep. 2019Sep. 2020%

growth

European Union2,688.152,325.24-13.50289.07347.4220.19
United States2,337.291,892.14-19.05254.04239.98-5.53
South Asia839.92693.48-17.4389.8388.89-1.05
ASEAN countries310.7222.7-28.3229.4925.91-12.14
CIS countries207.56204.35-1.5523.6328.2619.59
African countries200.37189.16-5.5917.0426.6556.40
Middle Eastern countries (excl. Cyprus and Egypt)680.48541.86-20.3765.3565.890.83
Others1,608.101,332.55-17.14183.65178.27-2.93
Total merchandise exports8,872.577,401.48-16.58952.101,001.275.16

Sources:  Sri Lanka Customs/Sri Lanka Export Development Board

Export of services

The services exports estimated by the EDB, which includes ICT/BPM, construction, financial services, and transport and logistics show exports of $ 2,291.8 million for the period of January to September 2020 compared to $ 2,911.7 million 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 the previous year. 

Revised export target and achievement

The revised export target of the EDB for 2020 is $ 13.39 billion and of that, it expects $ 9.57 billion from merchandise exports and $ 3.82 billion from services exports. During the period of January to September 2020, earnings from exports were recorded at $ 9.69 billion including the estimated services data for July to September and 72.4% achieved from the revised export target.

Furthermore, earnings from merchandise exports and services exports achieved 77.33% and 60.06%, respectively, during the period of January to September 2020.