Merchandise exports in April plunge amid global demand slowdown

„April records export earnings amounting to US $ 814.1mn

„Cumulative exports for Jan.-april 2023 contract by 9.7% YOY, totalling US $ 3.81bn

„Negative trajectory contributed by drop in performance in sectors such as apparel, rubber, coconut and spices

„Growth in export earnings recorded in tea, electronics, seafood and ornamental fish sectors

„Exports to all markets, except to UAE, decline

Sri Lanka’s merchandise exports plunged 16.5 percent year-on-year (YOY) to US $ 814.1 million in April, bringing the cumulative export earnings for the first four months of 2023 to US $ 3.81 billion, an decrease of 9.78 percent YOY, data from the Export Development Board (EDB) showed.

“Declining trend in merchandise exports further continues, due to the negative trends shown in major export products i.e., apparel and textiles, rubber and rubber-based products and coconut and coconut-based products,” the EDB said in a statement yesterday.

Export earnings from apparel and textile, the largest foreign exchange generator for the economy, contracted by 23.1 percent YOY to US $ 342.81 million in April 2023, compared to April 2022.

Similarly, earnings from rubber and rubber finished products decreased by 22.28 percent YOY to US $ 55.4 million in April 2023, with poor performance in exports of pneumatic and retreated rubber tyres and tubes (22.09 percent) and industrial and surgical gloves decreased by (24.32 percent).

Export earnings of kernel products dipped by 31.71 percent, while revenue from fibre products and shell products, liquid coconut milk, coconut oil and desiccated coconut contracted by 16.16 percent, 30.4 percent, 22.53 percent, 36 percent and 47 percent.

Export earnings from spices and essential oils too dropped but by a marginal 2.04 percent YOY to US $ 21.08 million.

However, recording a positive increase in export revenue was the tea sector, which made up 12 percent of the merchandise exports for the month of April. Tea exports grew by 16.1 percent YOY to US $ 93.39 million in April 2023, compared to April 2022. Earnings from export of tea packets increased by 29.1 percent to US $ 47.82 million.

Export earnings from the electrical and electronics components increased by 16.14 percent YOY to US $ 40.01 million in April 2023, with strong performance in exports of insulated wire (30.43 percent) and other electrical and electronic products (18.74 percent).

Further, export earnings from seafood increased by 17.1 percent YOY to US $ 24.76 million, mainly due to the strong performance in export of frozen fish (21.04 percent), fresh fish (47.9 percent) and shrimps (0.34 percent).

Moreover, export earnings from ornamental fish increased by 105.83 percent to US $ 2.12 million in April 2023, compared to April 2022.

The EDB stated that the value of ICT exports is estimated to increase by 34.95 percent to US $ 529 million in April 2023, compared to April 2022. In addition, value of construction and financial services exports are estimated to increase by 15.71 percent and 3.75 percent YOY in April 2023.

Analysis of export performances in terms of markets show that out of the 10 markets, only the UAE has shown a positive performance, both in the month of April 2023 and during the period of January to April 2023.

Exports to the United States of America, Sri Lanka’s single largest export destination, decreased by 22.42 percent YOY to US $ 193.20 million in April and by 16.65 percent for the first four months of 2023 when compared with the corresponding period in 2022.

Exports to free trade agreement partners, which accounted for 6.5 percent of total merchandise exports, decreased by 1.86 percent YOY to US $ 63.38 million in April. Exports to India and Pakistan dipped by 0.99 percent and 11.94 percent YOY.

Poor performance recorded in India, led by decreased exports of animal feed (-2.71 percent), pepper (-44.6 percent) and arecanuts (-32.82 percent) and poor performance recorded in Pakistan, led by decreased exports of coconut, the EDB said.

Meanwhile, exports to the European Union, accounting for 21 percent of Sri Lanka’s exports for April, decreased by 21.94 percent YOY to US $ 180.24 million and for the January-april period, exports dropped by 12.74 percent.