- Merchandise exports up 5% to $ 13.07 b; falls $ 1.03 b short of original $ 14.1 b goal
- Service exports drop by 6% to $ 1.87 b
- Apparel and textiles top exports with $ 5.9 b up by 10%
- Tea, rubber and rubber-based exports record billion mark but struggle to outshine
- EDB Chief Suresh de Mel commends hard work and resilience of exporters
- US continues as top export market, followed by UK, India, Germany and Italy
EDB Chairman Suresh de Mel |
Sri Lanka’s merchandise exports in 2022 achieved $ 13.07 billion, up by 5% from 2021 sustaining its resilience, but fell short $ 1.03 billion from the set target.
Export Development Board forecasted a total exports target $ 16.1 billion for 2022, consisting $ 14.94 billion from merchandise exports and $ 2 billion from service exports. The highest performance of total exports was $ 15.91 billion in 2018.
As per provisional data released by EDB yesterday, merchandise exports have sustained the growth momentum in the 12-month haul up by 4.6% from 2021, though the estimated value of services exports of last year decreased by 6% to $ 1.87 billion. The services exports estimated by EDB consist of ICT/BPM, construction, financial services and transport and logistics.
Expect apparel and textiles, electrical and electronic components and diamonds, gems and jewellery, and all the other key export sectors like tea, rubber, coconut, seafood, and spices underperformed in 2022.
“The hard work and resilience of the export community were reflected in last year’s results amidst unprecedented socioeconomic conditions in most part of 2022. They convinced buyers and delivered despite the hardships they faced internally to ensure ‘Made in Sri Lanka’ was out there in the global marketplace,” EDB Chairman Suresh de Mel told the Daily FT.
He said that the forecast of $ 16.1 billion in 2022 was challenging, amidst the recovery of global demand post-COVID, which required not only strong efforts from local enterprises amidst long power outages, fuel shortages, political instability, social unrest, and professionals in the service sector leaving for greener pastures.
Although the expected targets for 2022 were not possible to achieve, EDB Chief said as a country everyone should be extremely proud and supportive of the export sector’s immense contribution to the national economy at the worst times.
“Exports was ‘the only’ sector that generated a steady foreign exchange inflow to keep the economy afloat. The entire export workforce contributed a great deal to keep the economy steaming ahead by attracting scarce foreign exchange amidst extreme operating conditions. Thus, boosting exports and facilitating exporters should be made everyone’s priority right now,” de Mel said.
As per data December export figures also fell by 9.7% to $ 1.04 billion from 2021 mainly due to the decrease in export earnings from apparel and textiles, tea, rubber-based products, coconut-based products, food and beverages, spices and essential oils and fisheries products. However, the month sustained over $ 1 billion in performance.
It added the decline was due to the also the recovery of global demand, ongoing recession in major markets due to the rising cost of production, energy and predictions of a contracting economy going forward.
Major exports during January-December 2022
Apparel and textile export earnings increased by 10% to $ 5.9 billion in 2022 from a year earlier. Although export earnings from apparel increased by 10.74% to $ 5.48 billion year-on-year earnings from textile exports declined by 3% to $ 450.7 million in 2022 compared to 2021.
Electrical and Electronic Components (EEC) export income increased by 14.68% to $ 483.28 million in the period of January to December 2022 compared to the corresponding period of 2021. The export of insulated wires increased by 14.51% in the year 2022 to $ 80.96 million compared with the corresponding period of 2021.
In addition, the export of printed circuits, switches/ boards and panels, electrical transformers and other electrical and electronic products increased by 75.54%, 12.81%, 3.34% and 16.51% respectively in the period from January to December 2022 compared with the corresponding period of 2021.
However, export earnings from seafood decreased by 1.81% to $ 269.02 million in the period from January to December 2022 from a year earlier.
Export earnings from ornamental fish increased by 3.67% to $ 21.74 million in 2022 compared to the corresponding period of the year 2021.
Tea export earnings decreased by 4.95% YoY to $ 1.25 billion in 2022. Exports of all the subcategories of the tea sector except tea bags; tea packets (-5.57%), bulk tea (-4.52%), instant tea (-6.78%) and green tea (-23.8%) decreased in the period from January to December 2022 compared with the same period of 2021.
Rubber and rubber finished products export earnings decreased by 6.79% YoY to $ 1.01 billion in 2022 attributed to lower export of industrial and surgical gloves (-19.0%). Despite the decrease recorded in rubber exports, earnings from exports of pneumatic and retreated rubber tyres and tubes increased by 0.35% in the period of January to December 2022 compared with the same period of 2021.
Export earnings from coconut and coconut-based products recorded a decrease of 2.27% YoY to $ 817.09 million. Although the increase recorded in exports of coconut shell products (11.12%), earnings from coconut fibre products and coconut shell products decreased by 6.34% and 3.42% respectively in 2022 compared to a year earlier.
Spices and essential oils decreased by 18.93% to $ 370.3 million in 2022 compared to 2021 due to the poor performance in all the sub-categories; cinnamon (-5.75%), pepper (-33.34%), cloves (-42.12%), cardamom (-53.33%) and essential oils (-33.83%).
Sri Lanka’s export performance in major markets
Moderate export growth was recorded for the top 15 export markets from the period of January to December 2022.
In 2022, exports to the US – Sri Lanka’s single largest export destination, increased by 8.19% to over $ 3.31 billion recording a substantial performance compared to 2021. The better performance was driven by a boost in exports of apparel and textile (10.38%).
Exports to the UK, as the second largest trading partner, recorded an increase to $ 966.04 million, up by 11.68% YoY, which was mainly driven by the expansion in apparel and textile exports (5.37%).
Exports to FTA partners
Exports to Free Trade Agreement (FTA) partners in 2022 accounted for 7% of total merchandise exports, increasing by 3% YoY to $ 934.9 million.
Although exports to India increased by 5% YoY to $ 854.88 million, exports to Pakistan fell by 13.5% YoY to $ 79.51 million.
Growth in Exports to India was mainly supported by increased exports of animal feed (11.75%), areca nuts (45.24%), woven fabrics (46.33%), and wood pulp (18.06%) from January-December 2022.
Sri Lanka’s export performance in regions
On a region-wise comparison exports to all regions except African and CIS countries, and exports to other regions increased during the year 2022 compared with the year 2021.
In 2022, the breakdown of exports to the top five EU markets accounted for 78% of Sri Lanka’s merchandise exports — Germany $ 744.57 million (down by 1.27%), Italy $ 640.18 million (up by 10.58%), Netherlands $ 428.27 million (up by 0.60%), Belgium $ 307.68 million (down by 7.97%) and France $ 257.52 million (up by 4.72%).
Source: DailyFT