Sri Lanka’s merchandise exports increased by 2.18 % to US$ 1,027.2 Million in July 2023 compared to June 2023 as per the provisional data released by the Sri Lanka Customs. However, it is a 11.79 % decrease when compared to the value recorded in July 2022.
This declining of merchandise exports is due to the reduced demand shown in export products specially in Apparel & Textiles, Rubber & Rubber based products and Coconut & Coconut based products.
The Figure 1 shows the comparison of Monthly Merchandise Export Performance 2020 - July 2023.
Sources: Central Bank of Sri Lanka, Sri Lanka Customs
Major Exports in July 2023
a) Products & Services with Positive Growth (Increases)
Export earnings of Coconut kernel products and Coconut fiber products increased by 3.95 % and 0.92 % respectively in July 2023 compared to July 2022.
Export earnings from Coconut Milk Powder, Coconut cream and Liquid Coconut Milk which are categorized under the Coconut kernel products increased by 41.64 %, 23.05% and 10.16% respectively in July 2023 compared to July 2022.
Being the largest contributor to Coconut based sector, Coco Peat, Fiber Pith & Moulded products which are categorized under the Coconut fibre products, increased by 1.99% to US$ 15.35 Mn in July 2023 in comparison to July 2022.
In addition, export earnings from Spices and Essential Oils increased by 10.68 % to US$ 37.53 Mn in the month of July 2023 compared to month of July 2022 with strong performance in export of Pepper (222.27%).
Moreover, export earnings from Ornamental fish increased by 32.35 % to US$ 1.80 Mn in July 2023 compared to July 2022.
The value of ICT exports is estimated to increase by 45.5 % to US$ 132.25 Mn in July 2023 compared to July 2022. In addition, value of Transport & Logistics services exports is estimated to increase by 26.45 % in July 2023 compared with July 2022.
b) Products & Services with Negative Growth (Decreases)
Export earnings from Apparel & Textile have decreased by 22.28 % y-o-y to US$ 427.48 Million in July 2023 compared to July 2022.
In addition, Export earnings from tea which made up 12% of merchandise exports, decreased by 1.97 % y-o-y to US$ 115.2 Mn in July 2023 compared to July 2022. Earnings from export of Tea packets decreased by 1.93 % to US$ 55.49 Mn.
Export earnings from Rubber and Rubber Finished products have decreased by 11.13% y-o-y to US$ 79.31 Million in July 2023, with negative performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes (-5.76 %) and Industrial & Surgical Gloves of Rubber (-25.08%).
In addition, export earnings from the Electrical & Electronics Components decreased by 1.04 % y-o-y to US$ 40.82 Mn in July 2023 with poor performance in exports of Electrical Transformers (-32.13 %).
Export earnings from Seafood decreased by 16.46 % to US$ 17.25 Mn in July 2023 compared to July 2022. This decrease was mainly due to the poor performance in export of Shrimps (-70.51%) and Frozen fish (-4.27%).
On monthly analysis, export earnings of Coconut based products decreased by 5.67 % in July 2023 compared to July 2022. Moreover, export earnings of Coconut shell products decreased by 31.14 % to US$ 11.52 Mn in July 2023 compared to July 2022. Earnings from Activated Carbon, which is categorized under the Coconut shell products decreased by 30.37 % to US$ 10.64 Mn in July 2023 compared to July 2022.
Exports during the period of January – July 2023
For the period of January to July 2023, overall merchandise exports decreased by 10.26 % to US$ 6,898.34 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 8.03 %, 11.57 %, 19.06 % and 10.0 % respectively during the period of January - July 2023 compared with the corresponding period of 2022.
Earnings from export of Tea increased by 8.03 % to US$ 750.72 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 13.5 %, 44.71 %, 57.65% and 48.41% in the period of Jan-July 2023.
In addition, export earnings from Spices and Essential Oils increased y-o-y by 11.57 % to US$ 216.73 Mn in the period of January to July 2023. Export earnings from Cloves increased y-o-y by 247.25 % to US$ 35.94 Mn in the period of January to July 2023.
Meanwhile earnings from export of Electrical and Electronic Components (EEC) increased by 10.0 % to US$ 296.58 Mn in the period of January to July 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 49.86 %, 13.28% and 827.71 % respectively in the period of January to July 2023 compared to the corresponding period of 2022.
The value of ICT exports is estimated to increase by 17.78 % to US$ 793.8 Mn in the first seven months of 2023 compared to the corresponding period of 2022. In addition, Construction and Financial services exports are estimated to increase by 130.21 % and 37.77 % respectively in the period of January to July 2023 compared with the corresponding period of 2022.
b) Products & Services with Negative Growth (Decreases)
Earnings from export of Apparel & Textile decreased by 18.10 % to US$ 2,880.61 Mn during the period of January to July 2023 compared to the same period of 2022. Export of Apparel declined by 18.98 % and export of Textiles declined by 7.64 % in January to July 2023.
In addition, export earnings from Rubber & Rubber finished products decreased by 12.67 % to US$ 529.08 Mn in January – July 2023 compared with the same period of 2022 attributed to lower exports of Industrial & Surgical Gloves of Rubber (-26.49 %) and Pneumatic & Retreated Rubber Tyres & Tubes (-6.02 %).
For the period of January to July 2023, export earnings from Coconut & Coconut based products decreased by 19.68 % to US$ 402.80 Mn from the same period last year. Earnings from all the major categories of Coconut based products decreased in the period of January – July 2023 compared with the corresponding period of 2022 due to the poor performance in export of Coconut Oil (-24.96 %), Desiccated Coconut (-35.75%), Coconut Milk Powder (-12.37 %), Coconut Cream (-21.13 %), Liquid Coconut Milk (-12.28 %), Cocopeat (-16.61 %) and Activated Carbon (-16.81 %).
Further, export earnings from Seafood decreased by 8.10 % to US$ 149.63 Mn during the period of January to July 2023 compared to year 2022 due to the poor performance in Frozen Fish (-6.74 %), Fresh fish (-5.93 %) and Shrimps (-38.02%).
Table 1 shows the comparison of Merchandise export performance in July 2023 and January to July 2023 compared to corresponding periods of previous year.
Sri Lanka’s Export Performance in Major Markets
Out of top 10 export markets, only UAE has shown strong performance during the month of July 2023 and the period of January to July 2023 compared to the corresponding period in the previous year.
Further, India, UAE and France have shown strong performance during the month of July 2023 compared to July 2022.
Exports to United States of America, Sri Lanka’s single largest export destination, decreased 15.60 % to US$ 253.79 Mn in July 2023 compared to July 2022. Further, exports to United States of America decreased by 18.5 % to US$ 1,620.57 Mn in the period of January to July 2023 compared to the same period in 2022.
Table 2 shows the comparison of Merchandise export performance of top 15 export markets in July 2023 and January to July 2023 compared to corresponding periods of previous year.
Exports to FTA Partners
a) July 2023
Exports to Free Trade Agreement (FTA) partners accounted for 6.5 % of total merchandise exports has increased by 27.99 % to US$ 87.98 Mn in July 2023 compared to July 2022.
Exports to India increased by 29.0 % and exports to Pakistan increased by 16.93 % in July 2023 compared to July 2022.
Strong performance recorded in India led by increased exports of Pepper (240.44 %) and Arecanut (75.13 %). Better performance recorded in Pakistan led by increased exports of sheet Rubber and Desiccated Coconut.
b) Jan - July 2023
Exports to Free Trade Agreement (FTA) partners accounted for 7.2% of total merchandise exports decreased by 2.37 % to US$ 534.45 Mn during the period of January to July 2023 compared with the corresponding period of previous year.
Exports to India and Pakistan decreased by 1.37 % and 13.01 % respectively during the period of January to July 2023 when compared with the corresponding period of 2022.
Decreased exports to India led by poor export performance of Animal feed (-2.24%), Pepper (-12.53 %), Arecanut (-7.92%) and Wood pulp (-47.79%) and decreased exports to Pakistan led by export of Sheet rubber (-18.49%) and Desiccated Coconut (22.98%).
Sri Lanka’s Export Performance in Regions
Table 3 shows the comparison of region wise exports during the month of July 2023 and the period of January to July 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 July 2023 decreased by 16.18 % y-o-y to US$ 230.47 Mn. Further, exports to the European Union (EU) decreased by 12.79 % y-o-y to US$ 1,542.68 Mn during the period of January to July 2023 compared to the corresponding period of previous year.
During the period of January to July 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$ 349.9 Mn (decreased by 22.33 %), Italy US$ 381.23 Mn (increased by 6.13 %), Netherlands US$ 197.11 Mn (decreased by 15.72 %), Belgium US$ 132.51 Mn (decreased by 28.89 %) and France US$ 152.25 Mn. (decreased by 1.0 %).
Export of Services
The estimated value of services exports for the period of January to July 2023 was US$ 1,228.17 Mn, increasing 17.32 % 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 - 23.08.2023
