Sri Lanka’s merchandise exports increased by 6.98 % to US$ 1,091.6 Million in August 2023 compared to July 2023 as per the provisional data released by the Sri Lanka Customs. However, it is a 10.91 % decrease when compared to the value recorded in August 2022.
The decline in merchandise exports is due to decreased demand for export products, particularly in sectors such as Apparel & Textiles, Rubber & Rubber-based products, and Coconut & Coconut-based products.
The Figure 1 shows the comparison of Monthly Merchandise Export Performance 2020 – August 2023.
Sources: Central Bank of Sri Lanka, Sri Lanka Customs
Major Exports in August 2023
a) Products & Services with Positive Growth (Increases)
Export earnings from Spices and Essential Oils increased by 19.52 % to US$ 47.94 Mn in the month of August 2023 compared to month of August 2022. This increase was primarily driven by a remarkable increase in the export of Pepper 176.83%.
Furthermore, the estimated value of ICT exports is expected to increase by 45.5% to US$ 132.25 Mn in August 2023 when compared to August 2022. Additionally, the value of Transport & Logistics services exports is projected to increase by 26.45% in August 2023 compared to the same month in the previous year.
b) Products & Services with Negative Growth (Decreases)
Export earnings from Apparel & Textile have decreased by 23.06 % y-o-y to US$ 434.98 Million in August 2023 compared to August 2022.
In addition, Export earnings from tea which made up 12% of merchandise exports, decreased by 3.83 % y-o-y to US$ 119.64 Mn in August 2023 compared to August 2022. Earnings from export of Bulk Tea decreased by 15.03 % to US$ 59.07 Mn.
Export earnings from Rubber and Rubber Finished products have decreased by 19.70 % y-o-y to US$ 80.16 Million in August 2023, with negative performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes (-17.40 %) and Industrial & Surgical Gloves of Rubber (-29.92 %).
In addition, export earnings from the Electrical & Electronics Components decreased by 1.60 % y-o-y to US$ 41.22 Mn in August 2023 with poor performance in exports of Electrical Transformers (-44.48 %).
On monthly analysis, export earnings of Coconut based products decreased by 10.30 % in August 2023 compared to August 2022. Moreover, export earnings of Coconut kernel products, Coconut fiber products and Coconut shell products decreased by 6.68 %, 12.80 % and 15.86 % respectively in August 2023 compared to August 2022.
Export earnings from Coconut Oil, Desiccated Coconut and Liquid Coconut Milk which are categorized under the Coconut kernel products decreased by 10.15 %, 14.32 % and 9.97 % respectively in August 2023 compared to August 2022.
Being the largest contributor to Coconut based sector, Coco Peat, Fiber Pith & Moulded products which are categorized under the Coconut fibre products, decreased by 13.44 % to US$ 13.59 Mn in August 2023 in comparison to August 2022.
Earnings from Activated Carbon, which is categorized under the Coconut shell products decreased by 16.94 % to US$ 10.74 Mn in August 2023 compared to August 2022.
Export earnings from Seafood decreased by 30.83 % to US$ 17.66 Mn in August 2023 compared to August 2022. This decrease was mainly due to the poor performance in export of Frozen fish (-31.42 %), Shrimps (-37.67 %) and Fresh fish (-41.24 %).
Moreover, export earnings from Ornamental fish decreased by 12.55 % to US$ 2.02 Mn in August 2023 compared to August 2022.
Exports during the period of January – August 2023
For the period of January to August 2023, overall merchandise exports decreased by 10.42 % to US$ 7,983.13 Million compared to the corresponding period of 2022.
a) Products & Services with Positive Growth (Increases)
Earnings from export of Tea, Spices and Concentrates, Gems & Jewellery and Electronics & Electronic Components increased by 6.23 %, 12.91 % 13.52 %and 8.45 % respectively during the period of January - August 2023 compared with the corresponding period of 2022.
Earnings from export of Tea increased by 6.23 % to US$ 870.37 Mn was due to the increase of all the sub categories of tea sector except Bulk Tea and Tea Bags. Earnings from Tea packets, Instant Tea, Green Tea and Other Tea increased by 13.71%, 34.61 %, 40.48% and 46.09 % in the period of Jan-Aug 2023.
In addition, export earnings from Spices and Essential Oils increased y-o-y by 12.91 % to US$ 264.65 Mn in the period of January to August 2023. Export earnings from Pepper, Cloves and Nutmeg & Mace increased y-o-y by 14.87 %, 317.95% and 49.66% respectively in the period of January to August 2023.
Meanwhile earnings from export of Electrical and Electronic Components (EEC) increased by 8.45 % to US$ 337.85 Mn in the period of January to August 2023 compared to the corresponding period of 2022.
Earnings from export of Printed Circuits, Switches/ Boards & Panels, Boilers/ Piston Engines/ Pumps & Vacuum Pumps and Other Electrical & Electronic Products increased by 56.27 %, 13.71% and 11.43 % respectively in the period of January to August 2023 compared to the corresponding period of 2022.
The value of ICT exports is estimated to increase by 20.88 % to US$ 926.05 Mn in the first eight months of 2023 compared to the corresponding period of 2022. In addition, Construction and Financial services exports are estimated to increase by 75.43 % and 15.78 % respectively in the period of January to August 2023 compared with the corresponding period of 2022.
b) Products & Services with Negative Growth (Decreases)
Earnings from export of Apparel & Textile decreased by 18.79 % to US$ 3,315.56 Mn during the period of January to August 2023 compared to the same period of 2022. Export of Apparel declined by 19.95 % and export of Textiles declined by 4.66 % in January to August 2023.
In addition, export earnings from Rubber & Rubber finished products decreased by 13.67 % to US$ 609.26 Mn in January – August 2023 compared with the same period of 2022 attributed to lower exports of Industrial & Surgical Gloves of Rubber (-26.98 %) and Pneumatic & Retreated Rubber Tyres & Tubes (-7.68 %).
For the period of January to August 2023, export earnings from Coconut & Coconut based products decreased by 18.51 % to US$ 466.67 Mn from the same period last year. Earnings from all the major categories of Coconut based products decreased in the period of January – August 2023 compared with the corresponding period of 2022 due to the poor performance in export of Coconut Oil (-23.17 %), Desiccated Coconut (-32.92 %), Coconut Milk Powder (-9.44 %), Coconut Cream (-17.14 %), Liquid Coconut Milk (-12.01 %), Cocopeat (-16.22 %) and Activated Carbon (-16.83 %).
Further, export earnings from Seafood decreased by 11.18 % to US$ 167.30 Mn during the period of January to August 2023 compared to year 2022 due to the poor performance in Frozen Fish (-10.16 %), Fresh fish (-11.12 %) and Shrimps (-38.0 %).
Table 1 shows the comparison of Merchandise export performance in August 2023 and January to August 2023 compared to corresponding periods of previous year.
Sri Lanka’s Export Performance in Major Markets
Out of top 10 export markets, India, Italy, UAE and France have shown strong performance during the month of August 2023 and the period of January to August 2023 compared to the corresponding period in the previous year.
Exports to United States of America, Sri Lanka’s single largest export destination, decreased 21.29 % to US$ 252.13 Mn in August 2023 compared to August 2022. Further, exports to United States of America decreased by 18.89 % to US$ 1,872.7 Mn in the period of January to August 2023 compared to the same period in 2022.
Table 2 shows the comparison of Merchandise export performance of top 15 export markets in August 2023 and January to August 2023 compared to corresponding periods of previous year.
Exports to FTA Partners
a) August 2023
Exports to Free Trade Agreement (FTA) partners accounted for 6.5 % of total merchandise exports has increased by 23.02 % to US$ 93.2 Mn in August 2023 compared to August 2022.
Exports to India increased by 17.7 % and exports to Pakistan increased by 84.3 % in August 2023 compared to August 2022.
Strong performance recorded in India led by increased exports of Pepper (192.66%) Arecanut (2.8 %) and Animal Feed (37.3%). Better performance recorded in Pakistan led by increased exports of Other textile articles and Woven fabrics.
b) Jan - August 2023
Exports to Free Trade Agreement (FTA) partners accounted for 7.2% of total merchandise exports increased by 0.72 % to US$ 627.65 Mn during the period of January to August 2023 compared with the corresponding period of previous year.
Exports to India increased by 0.93% while exports to Pakistan decreased by 1.84 % r during the period of January to August 2023 when compared with the corresponding period of 2022.
Increased exports to India led by good export performance of Animal feed (0.22 %), Pepper (15.38 %), Cloves (471.05%) and Other textile articles (68.94 %) and decreased exports to Pakistan led by export of Sheet rubber (-12.48 %) and Desiccated Coconut (13.88 %).
Sri Lanka’s Export Performance in Regions
Table 3 shows the comparison of region wise exports during the month of August 2023 and the period of January to August 2023 compared to corresponding period of previous year.
Exports to the European Union (EU) which comprised 21% of Sri Lanka’s exports during the month of August 2023 increased by 3.78 % y-o-y to US$ 252.13 Mn. Further, exports to the European Union (EU) decreased by 18.89 % y-o-y to US$ 1,872.70 Mn during the period of January to August 2023 compared to the corresponding period of previous year.
During the period of January to August 2023, breakdown of exports to the top five EU markets which accounted for 78 % of Sri Lanka’s total exports to the EU were; Germany US$ 396.3 Mn (decreased by 23.01 %), Italy US$ 444.86 Mn (increased by 7.39 %), Netherlands US$ 224.96 Mn (decreased by 17.98 %), Belgium US$ 150.76 Mn (decreased by 30.04 %) and France US$ 227.06 Mn. (increased by 27.72 %).
Export of Services
The estimated value of services exports for the period of January to August 2023 was US$ 1,409.08 Mn, increasing 12.96 % over the corresponding period of 2022. The services exports estimated by EDB consists of ICT/BPM, Construction, Financial services and Transport & Logistics.
Policy & Strategic Planning Division - 18.09.2023
