Export sector shows dampened growth in 2023

„Merchandise exports dip 9.54% YOY to US $ 11.85bn „ Total exports reach US $ 14.94bn in 2023 „December loses momentum when compared to November’s export performance „US, UK and India continue as top export markets for Sri Lanka

The cumulative merchandise exports during the January to December 2023 period dipped to US $ 11.85 billion when compared to the corresponding period in 2022.

The island nation saw its total exports reach US $ 14.94 billion in 2023, including merchandise exports (US $ 11.85 billion) and estimated service exports (US $ 3.08 billion), the Export Development Board (EDB) said.

While the monthly exports were showing some signs of momentum gained in November, in December, the export performance fell to the levels of 2020, the year of the pandemic.

The final month of 2023 saw exports decrease by 11.25 percent year-onyear (YOY) to US $ 947.5 million, as per the provisional data released by Sri Lanka Customs. It is also a 5.16 percent decrease when compared to the revenue recorded in November 2023.

However, it is noteworthy that the exports of apparel and textiles recorded the highest in the year in December 2023, showing a positive sign of regaining momentum.

In December, the export earnings from tea, which made up 12 percent of merchandise exports, increased by 3.57 percent YOY to US $ 111.12 million. The increase is attributed to the strong performance in the export of tea packets and tea bags, which increased by 10.95 percent and 142.37 percent YOY.

In addition, the export earnings from rubber and rubber finished products have increased by 6.92 percent YOY to US $ 79.62 million in December 2023, with a strong performance in the exports of pneumatic and retreated rubber tyres and tubes (18.43 percent).

On a monthly analysis, the export earnings of coconut-based products increased by 2.02 percent in December 2023 compared to December 2022. Moreover, the export earnings of coconut kernel products and coconut shell products increased by 9.07 percent and 3.53 percent, respectively in December 2023 compared to December 2022.

The export earnings from coconut oil, coconut cream and liquid coconut milk, categorised under the coconut kernel products, increased by 9.17 percent, 41.38 percent and 22.27 percent YOY, in December 2023.

The earnings from activated carbon, which is categorised under the coconut shell products, increased by 4.6 percent to US $ 11.5 million in December 2023 compared to December 2022.

The export earnings from spices and essential oils increased by 0.1 percent to US $ 31.42 million YOY, mainly due to a significant increase in the export of cinnamon, by about 13.75 percent.

The seafood exports increased by 11.64 percent YOY to US $ 23.79 million, due to the strong performance in export of fresh fish (74.58 percent) and shrimp (49.74 percent).

Bringing the overall December export performance down was the apparel sector, where the performance dipped by 8.64 percent YOY to US $ 438.78 million.

The export earnings from the electrical and electronics components decreased by 18.56 percent YOY to US $ 34.97 million in December 2023, with a poor performance in the exports of insulated wires and cables (-17.43 percent), electrical transformers (-34.75 percent) and other electrical and electronic products (-22.63 percent).

The earnings from food and beverages have decreased by 16.16 percent YOY to US $ 29.21 million in December 2023, with a negative performance in the exports of animal feed (-49.16 percent).

Moreover, the export earnings from ornamental fish decreased by 4.69 percent to US $ 2.03 million in December 2023 compared to December 2022.

In terms of key export markets for December, the United States, United Kingdom and India emerged as the top three for Sri Lanka. However, all three markets showed a contraction.

The exports to the United States of America, Sri Lanka’s single largest export destination, decreased by 0.96 percent to US $ 253.74 million in December 2023, whereas for the whole year, the exports decreased by 16.91 percent YOY to US $ 2,758.57 million.

Among the top 10 export markets of Sri Lanka, France has shown a strong performance in both the month of December 2023 as well as the January to December 2023 period compared to the corresponding period in 2022.

Furthermore, the UAE and Italy have shown significant performance during the same period. The exports to the European Union (EU), which accounts for 24 percent of Sri Lanka’s exports during December 2023, decreased by 5.52 percent YOY to US $ 226.05 million. Further, the exports to the EU decreased by 10.75 percent YOY to US $ 2,711.93 million from January to December 2023 compared to the corresponding period of the previous year.

Meanwhile, the estimated value of services exports for the January to December 2023 period was US $ 3,080.9 million, increasing 63.1 percent over the corresponding period in 2022. The services exports estimated by the EDB consist of ICT/BPM, construction, financial services and transport and logistics.