Export earnings top US$ 1bn in September

• Cumulative earnings for first 9 months at US$ 7.4bn, down 17% YoY
• US emerges as largest buyer of Lankan made goods with US$ 1.9bn worth purchases 
• Jan-Sept. servicesexports at US$ 2.3bn compared to US$  2.9bn YoY
• EDB says over 72% of revised export earnings target for this year achieved 

Sri Lanka’s earnings from merchandise exports crossed the US$ 1 billion mark again in September after July, indicating that the country’s export sector is recovering at a faster pace after the brief setback caused by the curfews imposed to contain the coronavirus outbreak in April
and May. 

As per Customs statistics, earnings from merchandise exports recorded a positive 5.16 percent growth in September 2020 to US$ 1,001.27 million compared to US$ 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.

September merchandise export earnings have also helped the country to trim the gap in cumulative export earnings for the first nine months and also to close in on the target set for the full year, although the signs of resurgence of the virus from the beginning of this month could put a damper on the momentum.  

“I am extremely pleased to see US$ 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 increase of merchandise exports,” Export Development Board (EDB) Chairman Prabhash Subasinghe said.

“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,” he added. 

EDB, along with the government, launched a coordinated effort to facilitate, assist and revive the exporter community during the pandemic while listing the sector as an essential service recognising its significance to the national economy. 

In September, the EDB proposed an export stimulus reward scheme, effective from October through March 2021, in a bid to encourage higher volumes by exporters. 

The quantum of reward will be calculated based on the incremental export turnover of the particular quarter compared to the value earned a year ago. Large scale exporters with an annual export turnover of over Rs. 750 million will be paid 2 percent on the additional export earnings earned during the relevant period compared to the corresponding period of the previous year, while SME exporters will receive 3.5 percent on the additional export earnings. 

The EDB expects the scheme to generate an additional US$ 600 million in export earnings during the period.   
With September’s billion dollars, Sri Lanka’s cumulative nine months export earnings reached US$ 7.4 billion compared to US$ 8.9 billion earned in the same period last year, but the gap narrowed to 16.58 percent from 19.2 percent during the eight months to August. During the first nine months of 2020, the United States purchased US$ 1.9 billion worth Sri Lankan made goods, led by apparel and personal protective equipment (PPE), followed by the United Kingdom with US$ 664 million. 

Meanwhile India, Germany and Italy purchased US$ 454 million, US$ 430 million and US$ 330 million worth goods respectively. 

Among the best performing categories of exports in September were tea, rubber and coconut-based products, spices & essential oils, electrical & electronic components, food & beverages, seafood and petroleum products. Apparel exports declined by 3.75 percent in September to US$ 432 million from US$ 449 million a year ago bringing cumulative earnings to US$ 3.3 billion, down 22 percent.

However, earnings from PPE related products export increased by 42.9 percent to US$ 637 million in January through September 2020 compared with US$ 446 million recorded in the corresponding period of the previous year. The revised export target of EDB for 2020 is US$ 13.39 billion. EDB expects 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 were recorded at US$ 9.69 billion—including the estimated services data for July to September—which is 72.4 percent of the revised export target.