Feb. merchandise export earnings hit five-year high

„Export earnings hit US$ 993.73mn, barely missing US$ 1bn mark „Driven by shipment of transformers to Spain and higher rubber, tea, spice and essential oil exports „Jan-feb apparel exports down 8% to US$ 863mn „Cumulative earnings for Jan-feb down by 1

Sri Lanka’s merchandise export earnings reached a five-year high barely missing the US$ 1 billion mark in February as exports recovered from the second COVID-19 wave that emerged in the final quarter of 2020.

February merchandise export earnings rose by 2.5 percent year-onyear (YOY) to US$ 993.73 million driven by a shipment of transformers to Spain, according to provisional statistics released by Sri Lanka Customs.

On a month-on-month (MOM), exports grew by 7.5 percent posting highest export earnings since September last year, before the emergence of second COVID-19 wave in early October.

The export recovery in February was driven by significant growth in export of electrical and electronic components (EEC) and spices and essential oils as well as strong export performance of coconut-based products, rubber-based products, tea and food & beverages, despite the decline in apparel export earnings.

“Sri Lankans are strong in facing challenges, and the exporters have shouldered the task of placing the economy of the country on the right track with immense difficulties.

A tribute to exporters for their commendable performance during unstable circumstances,” Export Development Board (EDB) Chairman Suresh De Mel remarked.

However, the cumulative merchandise export earnings for the two months were down by 1.5 percent YOY to US $1.9 billion.

In the two-month period, earnings from apparel exports contracted by 8.08 percent YOY to US $862.91 million, contributing to 45.37 percent of the country’s overall merchandise export earnings.

However, the EDB noted that earnings from exports of other textiles and made-up textile articles recorded growth rates of 27.43 percent YOY and 5.69 percent YOY respectively during the period. Backed by export order of transformers from Spain, EEC export earnings in the two-month period rose by 114.87 percent YOY to US$ 131.63 million, becoming the fourth largest export segment during the period, replacing coconut-based products sector.

Tea exports recorded a modest growth of 2.88 percent YOY during the two-month period to US $213.52 million.

Rubber-based exports grew by 13.76 percent YOY to US$ 16784 million in the two-month period, with industrial and surgical rubber gloves registering a record 54.27 percent YOY growth.

Export earnings from spices and essential oils nearly doubled in the two-month period compared to last year, reaching US$ 75.59 million and accounting for nearly 4 percent of merchandise export earnings in the period.

However, the export earnings of petroleum products collapsed to US$ 1.16 million in the first two months of the year compared to US$ 77.53 million in the same period last year.

Further, export earnings of seafood, fruits and vegetables also declined in the period.

In addition, export earnings from diamond, gems & Jewellery products declined by nearly 3 percent YOY to US$ 45.05 million.

Despite Brexit, the European Union (EU) remained Sri Lanka’s largest export market, accounting for 28 percent of total merchandise exports in the two-month period, as export earnings from EU grew by 29.32 percent YOY to US$ 532.10.

A notable growth was recorded in exports to Germany, Italy and the Netherlands.

Exports to the country’s second largest export market and the single largest export destination, United States (US), declined by over 10 percent YOY to US$ 471.79 million.

Meanwhile, export earnings from United Kingdom (UK) declined by 21.39 percent YOY to US$ 141.37 million in the two-month period.

Following Brexit, the UK introduced a new tariff regime, namely, UK Global Tariff (UKGT), with effect from January 1, this year.

Meanwhile, the EDB estimated that earnings from service exports from construction, financial services and transport & logistics grew by 6.95 percent YOY to US$ 707.96 million in the two-month period.