6 March 2024 12:26 am Views - 197
Sri Lanka’s export sector started 2024 on a subdued note, with revenues not reaching the US$ 1 billion mark. Despite a slight decrease in merchandise exports compared to the same period last year, exporters believe they have done well under the circumstances.
Data released by the Export Development Board (EDB) showed that January merchandise export amounted to US$ 970.7 million, a 0.77 percent Year-on-Year (YoY) decline compared to January 2023.
The National Chamber of Exporters (NCE) speaking to Mirror Business said the performance is better than expected.
“The events and developments that took place over the final quarter of 2023 (4Q23) have impacted the export performance. Cost of borrowings, increase in electricity tariff, and the imposition of VAT did make it challenging for exporters,” NCE President Jayantha Karunaratne said.
He added that the rupee appreciating against the US dollar by about 15 percent over the last 12 months, which is good for the economy, contributed to the reduced profitability of exporters.
“What we need is a stable currency without much variation,” said Karunaratne, while noting that the revenue recorded is modest given that many of the sectors were grappling with challenges, some of which are beyond their control.
Provisional data released by the EDB showed that export earnings from tea, 12 percent of merchandise exports, increased by 2.63 percent YoY to US$ 102.18 million. This increase is mainly due to the strong performance in the export of Bulk Tea, Tea Bags and Green Tea.
Export earnings from Rubber and Rubber Finished products increased by 7.68 percent YoY to US$ 81.72 million with strong performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes (17.57 percent). Exports of rubber to Italy and Canada experienced significant growth, surpassing 100 percent in January 2024 compared to January 2023.
Coconut-based products saw exports increase by 16.74 percent YoY, where export earnings of Coconut kernel products and Coconut shell products increased by 19.92 percent and 42.68 percent respectively in January 2024 compared to January 2023.
In the negative side, earnings from Apparel & Textile decreased by 10.17 percent YoY to US$ 380.1 million where exports to USA, UK and EU regions decreased by 10.16 percent, 17.8 percent and 9.54 percent YoY.
Export earnings from Spices and Essential Oils dipped by 14.94 percent YoY to US$ 29.33 million, mainly due to the poor performance in export of Cloves (-94.13 percent). Clove exports to India decreased by nearly 100 percent in January 2024 compared to January 2023.
In addition, export earnings from the Electrical & Electronics Components decreased by 18.37 percent YoY to US$ 31.24 million in January 2024 with poor performance in exports of Insulated Wires and Cables (-3.24 percent).
Furthermore, total export earnings from Diamonds, Gems & Jewellery declined by 29.09 percent YoY to US$ 32.98 million in January 2024.
In terms of markets, the United States of America continued as a key export destination for Sri Lanka, absorbing 23 percent of Sri Lanka’s merchandise exports in 2024. However, exports to that destination decreased by 13.46 percent to US$ 220.48 million.
Similarly, exports to the United Kingdom decreased by 12.79 percent to US$ 67.52 million, whereas to India it dropped by 18.18 percent to US$ 56.93 million.