Sri Lanka’s exports and imports both declined in July 2015: Central Bank

Sep 29, 2015 (LBO) – Sri Lanka’s exports earnings recorded a decline of 2.6 per cent, year-on-year, to 932 million US dollars in July 2015, reflecting a year-on-year decline in both industrial and agricultural exports.

“Exports of all sub categories of industrial sector, except transport equipment, petroleum products and animal fodder, declined in July 2015, owing to the weak global demand and reduction in export prices,” Central Bank said in a statement.

Among the industrial exports, the earnings from the textiles and garments, which account for more than 44 per cent of the total exports earnings, declined marginally by 0.3 per cent to 413.1 US dollars in July 2015 compared to last year.

This was mainly due to the decline in garments exports despite the growth of 34.0 per cent recorded in textiles exports over July 2014, Central Bank said.

Meanwhile, decreases in earnings from export of rubber products, gems, diamonds and jewellery, machinery and equipment mainly contributed for the overall decline in industrial exports.

Export earnings from transport equipment, petroleum products and animal fodder increased by 91.3 per cent to 7.1 US dollars, 42.2 per cent to 40.1 US dollars and 13.0 per cent, respectively, in July 2015.

Earnings from agricultural exports in July 2015 declined by 2.7 per cent to 245.3 US dollars, led by significant declines recorded in tea and sea food exports.

Tea exports, which were severely affected by the lower demand from Russia and Middle East, declined in July 2015 for the 12th consecutive month, recording a drop of 14.0 per cent, year-on-year, reflecting declines in both export volume and export prices.

Export earnings from seafoods continued to decline owing to the restrictions on market access to the EU market. Accordingly, seafood exports to EU area dropped by 71.0 per cent recording an overall decline of 32.5 per cent in the seafood category, year-on-year, in July 2015.

However, earnings from exports of spices, minor agricultural products and coconut kernel products recorded a positive growth partly offsetting the overall decline in agricultural exports.

“On a cumulative basis, earnings from exports declined marginally by 0.9 per cent during the first seven months of the year mainly due to the lower performance of agricultural exports despite the positive growth in industrial exports.”

Import bill also declined by 16.9 per cent, year-on-year, to US dollars 1,534 million in July 2015 mainly due to the base effect as July 2014 recorded the highest monthly import value after November 2012, Central Bank said.

In addition, reduction in fuel imports bill also contributed for the overall decline in import expenditure.

Import expenditure on fuel imports declined by 66.1 per cent, on a year-on-year basis, during the month.

The average crude oil import price, which was US dollars 110.3 per barrel in July 2014 had nearly halved to US dollars 60.5 per barrel in July 2015.

As a result, expenditure on intermediate goods imports declined by 32.8 per cent, year-on-year, to US dollars 752 million in July 2015. Import expenditure on base metals, fertilisers and textile and textile articles also dropped during the month.

However, higher imports of personal motor cars in both value and volume terms, and import of vehicles, such as lorries and tractors, contributed mainly for the 4 increase in consumer goods and investment goods, respectively.

As a result, expenditure on consumer goods imports increased by 14.8 per cent to US dollars 415 million while expenditure on investment goods imports increased marginally to US dollars 366 million.

However, import expenditure on consumer goods, such as dairy products, clothing and accessories, sugar and confectionery and machinery and equipment, declined significantly in July 2015.