Sri Lanka December exports down on weak tea, garment shipments

ECONOMYNEXT – Sri Lanka’s export earnings continued their downward trend for the tenth consecutive month in December 2015, falling 18.7 percent from a year ago to 817 million US dollars, with both tea and garments down sharply.

The central bank said the trade deficit increased 4.4 percent to 827 million US dollars in December 2015, with imports weakening for the sixth consecutive month, down 8.5 percent to 1,645 million US dollars from the year before.

The import performance deviated from the normal seasonal trend of increased expenditure on imports towards the end of the year, a statement said.

“Export earnings from textile and garments, which contribute nearly 48 per cent to the total exports, declined for the third consecutive month by 12.8 per cent in December 2015, reflecting low exports to both EU and USA markets,” it said.

“However, garment exports to non-traditional markets such as Canada, China and UAE increased slightly by 1.7 per cent, year-on-year, during the month.”

The central bank said lower demand for tea exports continued throughout the year 2015 due to economic and geo-political developments in the main tea export destinations.

Earnings from tea exports in December dropped by 24.7 per cent reflecting declines in both export volume and average price levels compared to the corresponding month in the previous year.

Transport equipment, rubber products and gems, diamonds and jewellery exports also contributed significantly to the drop in December exports.

Earnings from rubber product exports continued to weaken, down 19.8 per cent year-on-year, in December 2015.

However, petroleum product exports grew 24.5 per cent as a result of a substantial increase in bunkering quantity by 186.4 per cent, year-on-year, in December 2015.

Earnings from chemical products also grew 10.5 per cent while cinnamon, woven fabrics and fruits showed a growth in December 2015, over the corresponding month in 2014.

Imports in December 2015 were down largely owing to the drop in imports of intermediate goods led by fuel imports, while the drop in imports of consumer goods and investment goods also contributed.

In December 2015, expenditure on fuel imports decreased by 15.5 per cent, year-on-year, to 216 million US dollars mainly due to the considerable decline in import prices, the central bank said.

There was a substantial decline in imports of personal motor vehicles and rice imports which contributed largely to the reduction of expenditure on consumer goods imports.

Expenditure on import of personal motor vehicles dropped significantly by 41.1 per cent to 66 million US dollars in December 2015, with declines recorded in all sub categories including motor cars and motor cycles.

Expenditure on transport equipment such as trishaws, buses and agricultural tractors, categorized under investment goods, declined significantly by 49.8 per cent, year-on-year.
(Colombo/March04/2016)