Goods exports hit all-time high in 2021; US$ 15bn target set for this year

• Merchandise exports earnings hit an all-time high of US$ 12.5bn in 2021
• Dec. 2021 exports exceed US$ 1bn mark for sixth consecutive month
• Apparel exports & textile exports up by 23% to US$5.4bn
• Export income from rubber-based products crosses US$ 1bn mark for first time 
• Services export earnings fail to meet EDB targets
• Govt. expects to achieve US$ 20bn from both goods and services exports this year

By Nishel Fernando
The government is targeting US$ 15 billion from merchandise exports for this year as such earnings in 2021 reached an all-time high crossing the US$12 billion mark for the first time in a challenging year. 

Sri Lanka’s merchandise exports earnings reached US$ 12.47 billion in 2021, recording 24.17 percent and two percent year-on-year (YoY) growth rates compared to 2020 and 2019, while surpassing the US$ 12.15 billion target set the by Export Development Board (EDB).

However, the overall exports earnings failed to reach pre-pandemic levels and EDB’s revised export forecast of US$ 15.72 billion due to less than anticipated performance of the services exports sector. The government has set a US$ 20 billion export earnings target for this year.

“A very big thank for exporters. Hard work and commitment of industrialists along with the government decision of speedy vaccination of country’s workforce started yielding results,” Trade Minister Bandula Gunawardane said during an event held in Colombo 
last Friday.

 In particular, he highlighted the 2021 merchandise exports performance as a breakthrough moment for the country’s export sector having crossed the US$ 12 billion mark for the first time after hovering around the US$ 8-10 billion range over the past several years.

In December, merchandise exports earnings maintained above US$ 1 billion for the sixth consecutive month recording US$ 1.13 billion, up 16.71 percent YoY.

Earnings from apparel & textile exports increased by 17.88 percent YoY to US$ 531.05 million in December. However, tea exports declined by 2.08 percent YoY to US$ 110.62 million. 

Earnings from rubber & rubber finished products and coconut based products rose by 17.57 percent YoY and 26.21 percent YoY to reach US$ 93.50 million and US$ 69.29 million respectively.  In addition, export of diamond, gems & Jewellery, spices and concentrates, processed food & beverages, seafood and ornamental fish, vegetables and fruits also recorded noteworthy growth in earnings in December.

The country’s largest export earner, apparel & textile exports rose by 22.93 percent YoY to US$ 5.42 billion in 2021 almost reaching the pre-pandemic export levels.

Tea exports increased by 6.72 percent YoY to US$ 1.32 billion achieving nearly 90 percent of the EDB’s target and almost reaching pre-pandemic export levels. 

Crossing the US$  1 billion mark for the first time, export earnings from rubber-based products grew by 33.87 percent YoY to US$ 1.09 billion in 2021.

Similarly, earnings from electrical and electronic components (EEC) exports reached an-all-time high of US$ 421.42 million by recording 28.38 percent YoY growth in 2021.  Spices and essential oils exports also increased by 36.14 percent YoY to US$ 456.71 million in 2021 surpassing EDB’s targets.

During the year, earnings from diamond, gems & Jewellery exports recovered 97.32 percent YoY to US$ 292.49 million nearing pre-pandemic levels.

Meanwhile, the United States emerged as Sri Lanka’s single largest export destination in 2021. Exports to the US rose by 22.4 percent to US$ 3.07 billion, nearly reaching pre-pandemic export levels. 
Exports to the European Union (EU), which accounted for 24 percent of Sri Lanka’s total exports, also increased by 29.78 percent YoY to US$ 2.95 billion during 2021. In particular, exports to Germany, Italy and the Netherlands recorded healthy increases. 

Exports to the United Kingdom as Sri Lanka’s second largest trading partner also grew by 2.55 percent YoY to US$ 933.72 million in 2021.

During the year, exports to free trade agreement (FTA) partners accounted for 7.2 percent of total merchandise exports, a 33.57 percent increase to US$ 906.99 million. 

Meanwhile, according to EDB estimates, Services exports earnings rose by 22.6 percent YoY in 2021 falling short of EDB’s revised services export forecast of US$ 3.58 billion. 

Under services exports, ICT/BPM exports were recorded at US$ 1.28 billion in 2021, but fell below EDB’s expected earnings of US$ 1.53 billion.