Sri Lanka’s export earnings amounted to USD 932Mn in December

The US$ 13.5 billion export target set for merchandise export sectors in early 2020 remains challenging, requiring not only strong efforts from local enterprises, but also the recovery of global demand amid complicated Covid-19 situation. Amid severe impacts of the Covid-19 pandemic, Sri Lanka’s merchandise exports remain at US$ 9.9 billion in 2020, which is a 104 % achievement from the revised forecast of US$ 9.5 billion.

Export Development Board (EDB) Chairman Suresh De Mel said; “Amidst the outbreak of COVID-19, a notable rebound of the export sector was recorded from mid – 2020 with the proactive measures introduced by the Government.

The growth in exports was not only due to the effective prevention and control of the epidemic in Sri Lanka, the commitment of exporter community to support the national economy by bringing in the much-needed foreign currency at a crisis situation is commendable.

Export Performance in December 2020

As per the Customs statistics, Export earnings in December 2020 amounted to US$ 931.65 Mn, which was 13.75% upper than the November 2020 and 6.91 % lower than December 2019. Reduction recorded in October & November exports due to the C19 outbreak in Sri Lanka which has had a direct impact on our manufacturing and export facilities also continued in December 2020.

Further, adverse global market conditions for Sri Lanka’s key exports were aggravated by the second wave of the COVID-19 pandemic experienced by many countries, leading to low demand for exports of Sri Lanka.

When considering the top 10 export markets, other than United States, United Kingdom and Germany, increases in exports were recorded in other markets. Exports to China and turkey increased 30.97% and 31.01% in December 2020 compared with December 2019 respectively.

Exports to EU (4.86%) and CIS (5.92%) Regions recorded increases in December 2020 compared to December 2019, exports to other regions were declined.

Graph I : Monthly Merchandize Export Performance  2019 & 2020

Sources: Central Bank of Sri Lanka, Sri Lanka Customs & Sri Lanka Export Development Board

Export Performance of Major Sectors in December 2020

Export earnings from Apparel & Textiles declined by 6.46 % to US$ 450.49 Mn during the month of December 2020 compared with US$ 481.59 Mn recorded in December 2019. In parallel, 38.95 % increase recorded in December 2020 in comparison to November 2020. Despite the decline in the sector, earnings from exports of made-up textile articles and other textiles increased by 64.79% and 11.72% respectively in December 2020 in comparison to December 2019. However, exports of Apparel increased by 46.58% in December 2020 compared with November 2020.

Export earnings from tea which made up 12% of merchandise exports increased by 6.78 % y-o-y to US$ 112.97 Mn in December 2020 compared to December 2019. Similarly, export earnings from tea recorded 17.42 % increase in December 2020 in comparison to November 2020.

In addition, Export earnings from Rubber & Rubber finished products have increased by 6.22 % y-o-y to US$ 79.52 Mn in December 2020 due to the better performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes (6.34%) and Industrial & Surgical Gloves of Rubber (27.70%). However, exports of Rubber Plates, Sheets Rods of Vulcanized or Unhardened Rubber and Hygienic or Pharmaceutical Articles have decreased by 6.05 % & 13.33% respectively in December 2020 in comparison to December 2019.

Earnings from all the major categories of Coconut based products increased in December 2020 compared with December 2019. Earnings from Coconut Oil, Desiccated Coconuts, Coconut Cream, Liquid Coconut Milk and Coconut Flour categorized under the Coconut Kernel Products increased y-o-y by 41.15%, 2.2 %, 59.7 %, 31.06%, and 131.82% respectively in December 2020. Being the largest contributor to Coconut based sector, Coco Peat, Fiber Pith & Moulded products which categorized under the Coconut fibre products increased by 44.23 % to US$ 10.99 Mn in December 2020 in comparison to December 2019. Earnings from Activated Carbon, which categorised under the Coconut shell products increased by 41.56 % in December 2020 compared to December 2019.

Export earnings from Spices and Essential Oils have increased by 57.61 % to US$ 33.13 Mn in December 2020 compared with the value of US$ 21.02 Mn recorded in December 2019 due to the better performance recorded in exports of Cinnamon (13.82 %) and Pepper (315.15 %).

Meanwhile, earnings from export of Electrical and Electronic Components (EEC) increased by 26.58% to US$ 36.14 Mn in December 2020 in comparison to December 2019. In parallel, earnings from export of EEC increased by 42.07 % in December 2020 compared with November 2020.

Table 1 : Merchandise Export Performance

Values in US$ Mns

Exports of Goods 2019 2020 % Growth Dec. 2019 Dec. 2020 % Growth
 Apparel 5,577.38 4,405.84 -21.01 481.59 450.49 -6.46
 Tea 1,346.40 1,240.94 -7.83 105.80 112.97 6.78
 Rubber-based 890.30 816.17 -8.33 74.86 79.52 6.22
 Coconut-based 613.80 664.54 8.27 44.28 54.88 23.94
 Gems & Jewellery 313.70 148.23 -52.75 25.81 16.53 -35.96
 Electricals & Electronic Components 381.16 328.28 -13.87 28.55 36.14 26.58
 Spices and Concentrates 313.16 335.47 7.12 21.02 33.13 57.61
 Food & Beverages 363.90 351.36 -3.45 30.88 27.56 -10.75
 Seafood 262.45 189.80 -27.68 23.85 14.39 -39.66
 Ornamental Fish 16.24 13.03 -19.77 2.23 0.96 -56.95
 Vegetables 31.73 25.67 -19.10 2.82 1.80 -36.17
 Fruits 43.87 35.67 -18.69 4.29 2.75 -35.90
 Other Export Crops 45.28 67.59 49.27 7.88 1.39 -82.36
 Flowers & Foliage 17.51 12.61 -27.98 0.80 0.93 16.25
 Boat Building 65.43 2.39 -96.35 0.15 0.23 53.33
 Petroleum Products 336.34 271.8 -19.19 21.92 0.54 -97.54
 Others 1,321.35 1,002.61 -24.12 124.07 97.44 -21.46
 Total Merchandize Exports 11,940 9,912 -16.98 1000.8 931.65 -6.91

Sources:  Sri Lanka Customs / Sri Lanka Export Development Board

Export Performance during the period of January – December 2020

Total merchandize export earnings for January to December 2020 was US$ 9,912 Mn compared to US $ 11,940 Mn recorded in a similar period of the previous year – a decline of 16.98 %.

Major exports such as Apparel & Textiles (US$ 4,405.84 Mn), Tea (US$ 1,240.94 Mn), Rubber & Rubber based products (US$ 816.17 Mn) and Electrical & Electronic Components (US$ 328.28 Mn) recorded decrease of 21.01%, 7.83%, 9.66% and 13.87% respectively during January – December 2020 compared to the similar period of previous year.

Further, exports of Apparel, one of the hardest-hit economic sectors by the Covid-19 recorded US$ 4,405.84 Mn which was higher than the revised forecast of US$ 4.1 billion in April.

However, export of Coconut & Coconut Based Products (US$ 664.54 Mn), Spices and Concentrates (US$ 335.47 Mn) and Other Export crops (US$ 67.59 Mn) recorded positive growth rates during the period.

The export sectors that shows a positive growth at disaggregate level includes export of Made-up Textile Articles, Other Textile Articles, Industrial & Surgical Gloves of Rubber, Coconut Oil, Coconut Milk Powder, Coconut cream, Liquid Coconut Milk, Coconut Flour, Coconut Vinegar, Coco Peat, Fiber Pith & Moulded products, Coconut husk chips, Activated Carbon, Coconut Shell Pieces, Powder & Charcoal, Cinnamon, Pepper, Essential oils, Ginger, Processed Vegetables, Fruits & Juices, Sugars, Sugar Confectionery & Bakery Products, Rice, Black Gram, Lentils, Arecanuts, Starches, Glues, Enzymes, Other Plastic Products and Petroleum Gases.

Earnings from export of PPE (Personal Protective Equipment) related products increased by 47.42 % to US$ 876.44 Mn in January to December 2020 compared with the value of US$ 600.45 Mn recorded in the corresponding period of previous year. The strong performance was mainly due to the increased exports of Other made-up articles (HS 630790) and Articles of apparel and clothing accessories of plastics (HS 392620). As a result of increased export of Articles of apparel and clothing accessories of plastics, export of Plastic Products increased by 139.96% to US$ 176.35 Mn in January to December 2020 compared with the value of US$ 73.49 Mn recorded in the corresponding period of previous year.

Sri Lanka’s Trade Performance in Major Markets

The top five export destinations during the period Jan-December 2020 were United States of America (US$ 2,507.2 Mn), United Kingdom (US$ 910.47 Mn), India (US$ 604.5 Mn), Germany (US$ 570.39 Mn) and Italy (US$ 457.32 Mn) absorbed over 50% of exports recorded in the period.

Being the largest single export destination, United States of America has absorbed US$ 239.73 Mn worth of exports in December 2020 recording a decline of 15.33 % in comparison to US$ 283.12 Mn absorbed in December 2019. Also, exports to United States of America decreased by 20.14 % in January-December 2020 in comparison to the corresponding period of previous year.

Exports to United Kingdom as the largest trading partner in the EU Region recorded decrease of 6.31% to US$ 67.68 Mn in December 2020 compared with December 2019.

Further, exports to top 10 markets have also shown poor performance during the period of January to December 2020.

Except to EU (4.87%) and African region (5.92%), Exports to the regions; South Asia, Asean, CIS and Middle East Countries have decreased by 9.95%, 28.02%, 7.28% and 5.51 % respectively in December 2020 compared with December 2019.

Table 2: Sri Lanka’s Top 10 Export Destinations

Values in US$ Mns

  Country Jan.- Dec. 2019 Jan.- Dec. 2020 % Growth Dec. 2019 Dec. 2020 % Growth
1 United States 3139.49 2,507.20 -20.14 283.12 239.73 -15.33
2 United Kingdom 997.90 910.47 -8.76 72.24 67.68 -6.31
3 India 758.97 604.50 -20.35 55.99 58.01 3.61
4 Germany 645.74 570.39 -11.67 51.42 51.32 -0.19
5 Italy 531.06 457.32 -13.89 40.67 50.50 24.17
6 Belgium 352.14 295.48 -16.09 29.29 31.40 7.20
7 Netherlands 300.89 290.17 -3.56 30.77 37.08 20.51
8 China 229.06 223.00 -2.65 19.99 26.18 30.97
9 Canada 240.49 213.05 -11.41 20.45 23.57 15.26
10 Turkey 209.58 208.38 -0.57 16.67 21.84 31.01
  Other Markets 4534.68 3,632.04 -19.91 380.19 324.34 -14.69
  Total 11,940.00 9,912.00 -16.98 1,000.80 931.65 -6.91

Sources:  Sri Lanka Customs / Sri Lanka Export Development Board

Table 3: Sri Lanka’s Export Regions

Values in US$ Mns

Country Jan.- Dec. 2019 Jan.- Dec. 2020 % Growth Dec. 2019 Dec. 2020 % Growth
European Union 3,548.87 3,182.06 -10.34 286.07 299.96 4.86
United States 3,139.49 2,507.20 -20.14 283.12 239.73 -15.33
South Asia 1,123.83 916.17 -18.48 92.02 82.86 -9.95
Asean Countries 407.10 283.44 -30.38 32.90 23.68 -28.02
CIS Countries 275.27 269.66 -2.04 21.57 20.00 -7.28
African Countries 258.04 245.83 -4.73 18.24 19.32 5.92
Middle East Countries (Excl. Cyprus & Egypt) 904.82 708.59 -21.69 69.12 65.31 -5.51
Others 2282.58 1799.05 -21.18 197.76 180.79 -8.58
Total 11,940.00 9,912 -16.98 1000.80 931.65 -6.91

Sources:  Sri Lanka Customs / Sri Lanka Export Development Board

Export of Services

The services exports estimated by EDB which includes ICT/BPM, Construction, Financial services and Transport & Logistics show exports of US $ 2,976 Mn for the period of January to December 2020 compared to US$ 3,888 Mn recorded in the corresponding period of the previous year, which shows a decline of 23.46 %.