Sri Lanka has recorded an export income of Rs. 983.7 million in the past two months, State Minister of Small and Medium Enterprises Development Prasanna Ranaweera announced.

“As a nation, we have made significant strides in overcoming the economic challenges faced during the previous season. Notably, in the last two months, we have generated an export income of Rs. 983.7 million.

“Additionally, approximately 500,000 tourists visited the island in January and February alone. Furthermore, our efforts have resulted in an increase in the number of entrepreneurs from 2.5% to 3%,” he said. 

State Minister Ranaweera pointed out that this figure serves as a confirmation that the country is heading in the right direction economically.

State Minister Prasanna Ranaweera made the remarks during a press conference at the Presidential Media Centre on Thursday (Mar 28).

He further highlighted that fostering an entrepreneurial environment within schools provides significant support in nurturing individuals to become successful entrepreneurs.

The State Minister revealed that the Sri Lanka Institute of Textile and Apparel has recently awarded diploma course certificates to nearly 500 students. 

“Furthermore, in collaboration with the Industrial Development Board (IDB), we have successfully established school entrepreneurial circles and assessed the students’ potential. It’s worth noting that cultivating an entrepreneurial atmosphere within schools greatly aids in fostering future entrepreneurs. This initiative is pivotal in laying the foundation for a robust manufacturing economy within the country,” he said.

State Minister Ranaweera noted that the initiative to provide welfare benefits to 2.4 million underprivileged families is progressing smoothly. 

Additionally, a lunch program has been initiated to cater to the nutritional requirements of 1.7 million school children from grades one through five, and it is being effectively executed.

“Efforts are underway to boost the clay, brass, and cane industries by commencing exports of these products to countries like Italy, Canada, and Germany. Collaborating with the Asian Development Fund, arrangements have also been made to offer loans at a concessional interest rate. 

“Transportation issues related to cane materials have surfaced recently. However, following consultations with the Ministry of Wildlife and Forest Conservation, we have organised transportation for up to 500 canes. 

“Additionally, discussions with the National Crafts Council have led to an arrangement allowing the transportation of a maximum of 5 cubes of clay, addressing logistical concerns in this sector,” he added. (NewsWire)

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Sri Lanka’s Export Performance surpassed the US$ 1 billion mark in July 2023, according to the Export Development Board (EDB).

As per the provisional data released by Sri Lanka Customs, merchandise exports increased by 2.18 % to US$ 1,027.2 Million in July 2023 compared to June 2023. 

The EDB stated that, however, it is an 11.79 % decrease when compared to the value recorded in July 2022.

This decline in merchandise exports is due to the reduced demand shown in export products, especially in Apparel and textiles, Rubber and rubber-based products, and Coconut and coconut-based products, it added.

Full EDB report: 

Major Exports in July 2023

• Products & Services with Positive Growth (Increases)

Export earnings of Coconut kernel products and Coconut fibre products increased by 3.95 % and 0.92 % respectively in July 2023 compared to July 2022. 

Export earnings from Coconut Milk Powder, Coconut cream and Liquid Coconut Milk which are categorized under the Coconut kernel products increased by 41.64 %, 23.05% and 10.16% respectively in July 2023 compared to July 2022. 

Being the largest contributor to the coconut-based sector, Coco Peat, Fiber Pith and moulded products which are categorized under the Coconut fibre products, increased by 1.99% to US$ 15.35 Mn in July 2023 in comparison to July 2022. 

In addition, export earnings from Spices and Essential Oils increased by 10.68 % to US$ 37.53 Mn in the month of July 2023 compared to the month of July 2022 with a strong performance in the export of Pepper (222.27%).

Moreover, export earnings from Ornamental fish increased by 32.35 % to US$ 1.80 Mn in July 2023 compared to July 2022.

The value of ICT exports is estimated to increase by 45.5 % to US$ 132.25 Mn in July 2023 compared to July 2022. In addition, the value of Transport and logistics services exports is estimated to increase by 26.45 % in July 2023 compared with July 2022.

• Products & Services with Negative Growth (Decreases)

Export earnings from Apparel & Textiles have decreased by 22.28 % y-o-y to US$ 427.48 Million in July 2023 compared to July 2022. 

In addition, Export earnings from tea which made up 12% of merchandise exports, decreased by 1.97 % y-o-y to US$ 115.2 Mn in July 2023 compared to July 2022. Earnings from export of Tea packets decreased by 1.93 % to US$ 55.49 Mn. 

Export earnings from Rubber and Rubber Finished products have decreased by 11.13% y-o-y to US$ 79.31 Million in July 2023, with negative performance in exports of Pneumatic and retreated Rubber Tyres and tubes (-5.76 %) and Industrial and surgical Gloves of Rubber (-25.08%).

In addition, export earnings from the Electrical & Electronics Components decreased by 1.04 % y-o-y to US$ 40.82 Mn in July 2023 with poor performance in exports of Electrical Transformers (-32.13 %).

Export earnings from Seafood decreased by 16.46 % to US$ 17.25 Mn in July 2023 compared to July 2022. This decrease was mainly due to the poor performance in the export of shrimp (-70.51%) and Frozen fish (-4.27%).

On monthly analysis, export earnings of Coconut-based products decreased by 5.67 % in July 2023 compared to July 2022. Moreover, export earnings of Coconut shell products decreased by 31.14 % to US$ 11.52 Mn in July 2023 compared to July 2022. Earnings from Activated Carbon, which is categorized under the Coconut shell products decreased by 30.37 % to US$ 10.64 Mn in July 2023 compared to July 2022.

Exports during the period of January – July 2023

For the period of January to July 2023, overall merchandise exports decreased by 10.26 % to US$ 6,898.34 Million compared to the corresponding period of 2022. 

• Products & Services with Positive Growth (Increases)

Earnings from the export of Tea, Spices and Concentrates, Gems & Jewellery and Electronics & Electronic Components increased by 8.03 %, 11.57 %, 19.06 % and 10.0 % respectively during the period of January – July 2023 compared with the corresponding period of 2022.

Earnings from the export of Tea increased by 8.03 % to US$ 750.72 Mn due to the increase of all the subcategories of the tea sector except Bulk Tea and Tea Bags. Earnings from Tea packets, Instant Tea, Green Tea and Other Tea increased by 13.5 %, 44.71 %, 57.65% and 48.41% in the period of Jan-July 2023.

In addition, export earnings from Spices and Essential Oils increased y-o-y by 11.57 % to US$ 216.73 Mn in the period of January to July 2023. Export earnings from Cloves increased y-o-y by 247.25 % to US$ 35.94 Mn in the period of January to July 2023.

Meanwhile, earnings from export of Electrical and Electronic Components (EEC) increased by 10.0 % to US$ 296.58 Mn in the period of January to July 2023 compared to the corresponding period of 2022. 

Earnings from the export of Printed Circuits, Switches/ Boards and panels, Boilers/ Piston Engines/ Pumps & Vacuum Pumps and Other Electrical and electronic Products increased by 49.86 %, 13.28% and 827.71 % respectively in the period of January to July 2023 compared to the corresponding period of 2022. 

The value of ICT exports is estimated to increase by 17.78 % to US$ 793.8 Mn in the first seven months of 2023 compared to the corresponding period of 2022. In addition, Construction and Financial services exports are estimated to increase by 130.21 % and 37.77 % respectively in the period of January to July 2023 compared with the corresponding period of 2022.

• Products & Services with Negative Growth (Decreases)

Earnings from the export of Apparel and textiles decreased by 18.10 % to US$ 2,880.61 Mn during the period of January to July 2023 compared to the same period of 2022. The export of Apparel declined by 18.98 % and the export of Textiles declined by 7.64 % from January to July 2023.

In addition, export earnings from Rubber and rubber finished products decreased by 12.67 % to US$ 529.08 Mn in January – July 2023 compared with the same period of 2022 attributed to lower exports of Industrial and Surgical Gloves of Rubber (-26.49 %) and Pneumatic & Retreated Rubber Tyres & Tubes (-6.02 %). 

For the period of January to July 2023, export earnings from Coconut and coconut-based products decreased by 19.68 % to US$ 402.80 Mn from the same period last year. Earnings from all the major categories of Coconut-based products decreased in the period of January – July 2023 compared with the corresponding period of 2022 due to the poor performance in export of Coconut Oil (-24.96 %), Desiccated Coconut (-35.75%), Coconut Milk Powder (-12.37 %), Coconut Cream (-21.13 %), Liquid Coconut Milk (-12.28 %), Cocopeat (-16.61 %) and Activated Carbon (-16.81 %).

Further, export earnings from Seafood decreased by 8.10 % to US$ 149.63 Mn during the period of January to July 2023 compared to the year 2022 due to the poor performance in Frozen Fish (-6.74 %), Fresh fish (-5.93 %) and Shrimps (-38.02%).

Table 1 shows the comparison of Merchandise export performance in July 2023 and January to July 2023 compared to the corresponding periods of the previous year.

Table 1: Comparison of Product-wise Merchandise Export Performance Values in US$ Mns

Sources: CBSL, SL Customs

Sri Lanka’s Export Performance in Major Markets

Out of the top 10 export markets, only UAE has shown strong performance during the month of July 2023 and the period of January to July 2023 compared to the corresponding period in the previous year.

Further, India, UAE and France have shown strong performance during the month of July 2023 compared to July 2022.

Exports to the United States of America, Sri Lanka’s single largest export destination, decreased 15.60 % to US$ 253.79 Mn in July 2023 compared to July 2022. Further, exports to the United States of America decreased by 18.5 % to US$ 1,620.57 Mn in the period of January to July 2023 compared to the same period in 2022.

Table 2 shows the comparison of Merchandise export performance of the top 15 export markets in July 2023 and January to July 2023 compared to corresponding periods of the previous year. 

Table 2: Comparison of Merchandise Export Performance of Top 15 Export Destinations Values in US$ Mns

Sources: CBSL, SL Customs

Exports to FTA Partners

• July 2023

Exports to Free Trade Agreement (FTA) partners accounted for 6.5 % of total merchandise exports and have increased by 27.99 % to US$ 87.98 Mn in July 2023 compared to July 2022. 

Exports to India increased by 29.0 % and exports to Pakistan increased by 16.93 % in July 2023 compared to July 2022.

Strong performance recorded in India led by increased exports of Pepper (240.44 %) and Arecanut (75.13 %). Better performance recorded in Pakistan led by increased exports of sheet Rubber and Desiccated Coconut.

• Jan – July 2023

Exports to Free Trade Agreement (FTA) partners accounted for 7.2% of total merchandise exports decreased by 2.37 % to US$ 534.45 Mn during the period of January to July 2023 compared with the corresponding period of the previous year.

Exports to India and Pakistan decreased by 1.37 % and 13.01 % respectively during the period of January to July 2023 when compared with the corresponding period of 2022.  

Decreased exports to India led by poor export performance of Animal feed (-2.24%), Pepper (-12.53 %), Arecanut (-7.92%) and Wood pulp (-47.79%) and decreased exports to Pakistan led by export of Sheet rubber (-18.49%) and Desiccated Coconut (22.98%).

Sri Lanka’s Export Performance in Regions

Table 3 shows the comparison of region-wise exports during the month of July 2023 and the period of January to July 2023 compared to the corresponding period of the previous year. 

Table 3: Comparison of Region-wise Merchandise Export Performance Values in US$ Mns

Exports to the European Union (EU) which comprised 21% of Sri Lanka’s exports during the month of July 2023 decreased by 16.18 % y-o-y to US$ 230.47 Mn. 

Further, exports to the European Union (EU) decreased by 12.79 % y-o-y to US$ 1,542.68 Mn during the period of January to July 2023 compared to the corresponding period of the previous year.

During the period of January to July 2023, the breakdown of exports to the top five EU markets which accounted for 78 % of Sri Lanka’s total exports to the EU were; Germany US$ 349.9 Mn (decreased by 22.33 %), Italy US$ 381.23 Mn (increased by 6.13 %), Netherlands US$ 197.11 Mn (decreased by 15.72 %), Belgium US$ 132.51 Mn (decreased by 28.89 %) and France US$ 152.25 Mn. (decreased by 1.0 %).

Export of Services

The estimated value of services exports for the period of January to July 2023 was US$ 1,228.17 Mn, increasing by 17.32 % over the corresponding period of 2022. The services exports estimated by EDB consist of ICT/BPM, Construction, Financial services and Transport & Logistics. (NewsWire)

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The main opposition, Samagi Jana Balawegaya (SJB) has expressed its willingness to support legal amendments that will address the dire issues faced by Small and medium-sized enterprises (SMEs) in Sri Lanka. 

Taking to Twitter, SJB MP Dr. Harsha de Silva stated that it was important to understand the reasons for the drop in Sri Lanka’s export revenue, which is -16% YoY in April 2023, particularly apparels which reported a -23% drop.

MP de Silva pointed out that open capacity is across regions with inventory buildup due to lower demand in the West for multiple reasons, while there was also intense price competition.

Warning that this situation will continue perhaps until mid or late 2024, the MP said, “Those with deep pockets can hold on with difficulty, but what of the SMEs? Need urgent attention.”

Highlighting the growing Indian market and its clear Free Trade Agreement limit, the MP advised the authorities to invite those leaving China with solid European customers and to take measures to protect the European Union’s Generalised Scheme of Preferences Plus (GSP+).

He further called on the authorities to resolve the dire issues facing SMEs by restructuring their facilities.

“Misery caused by the same government now with former President Gotabaya Rajapaksa then. Samagi Jana Balawegaya will support urgent legal amendments. Need Chapter 18 type law later,” the MP said. 

SJB MP Harsha de Silva also added that, however, the long-term need is to integrate stronger with global markets beyond apparel. (NewsWire)

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