Exports record highest monthly value in history in Oct.

• Exports surge 40% to US $ 1.2bn; imports up 24% to US $ 1.7bn
• Oct. trade gap narrows marginally; cumulative trade gap expands to US $ 6.5bn

Merchandise exports recorded the highest monthly exports value in history in October 2021, as the export earnings were recorded at US $ 1.2 billion, up 40.4 percent year-on-year (YoY), which also marked the fifth consecutive month of above US $ 1 billion of export earnings.

Merchandise imports for the month of October were US $ 1.69 billion, up 24.3 percent YoY. The trade balance for October narrowed slightly on a YoY basis to US $ 495 million, from US $ 509 a year ago. But the cumulative trade deficit expanded to US $ 6,498 million, from US $ 4,846 million a year ago.

Despite the higher export earnings, Sri Lanka is suffering from an acute shortage of dollars, with foreign reserves depleting to historical levels while having a massive foreign debt burden hanging over its head.

Sri Lanka had long been using worker remittance incomes and earnings from tourism to bridge the deficit in the country’s trade account. However, with the COVID-19 pandemic, both those income sources have been interrupted.

The remittance income for October was US $ 317 million, compared to US $ 631 million in October 2020, while the tourism earnings were estimated at a paltry US $ 31 million. 

Both industrial and agricultural exports recorded higher earnings in October 2021. Industrial exports, up 49.3 percent YoY, were led by textile and garment exports, which rose 43.5 percent YoY to US $ 510.6 million.
Earnings from export of gems, diamonds and jewellery also rose 105.4 percent YoY to US $ 45.5 million and earnings from machinery and mechanical appliances exports rose 119.2 percent YoY to US $ 45.5 million. Earnings from petroleum products rose 95.9 percent YoY to US $ 47.7 million.

Earnings from agricultural exports increased 14.3 percent YoY to US $ 241.6 million but tea, vegetable and tobacco recorded lower earnings YoY.

Meanwhile, in terms of imports, an increase in import expenditure was observed in intermediate goods and investment goods, while a decline was observed in consumer goods.

The fuel bill in the month of October was US $ 385 million, up 72.3 percent YoY, while expenditure on textile and textile articles was US $ 265.8 million, up 21.9 percent YoY.

Meanwhile. Sri Lanka spent higher on machinery and equipment, building material and transport equipment imports in October 2021 compared to October 2020.

Sri Lanka’s total import expenditure for the 10 months of 2021 was US $ 16.6 billion, compared to US $ 13.1 billion in the same period of 2020, whereas the cumulative export income was US $ 10.1 million compared to US $ 8.2 million in 2020.