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Sri Lanka exports earnings high; workers’ remittances up by 23%

Monday, 07 March 2011 09:53

Source: Asian Tribune
By J.A. Fernando

Sri Lanka’s export earnings is reported, the highest ever annual value at US $ 8.3 billion in 2010 (up 17.3%) while the export earnings on December recorded highest ever monthly values in December 2010 at US $ 968 million (up by 34% year on year), according to the recent data released by Central bank.

Central Bank also said that the workers’ remittances increased by 23.6% to US $ 4.11 billion in 2010.

Consequently, Central Bank of Sri Lanka outlined that the gross official reserves continued to remain above the targeted level and stood at US $ 6.6 billion by end January, 2011 without Asian Clearing Union (ACU) balances.

Also Central Bank in its recently released data revealed that based on the previous 12-month average expenditure on imports of US $ 1,133 million per month, the gross official reserves without ACU balances, were equivalent to 5.9 months of imports.

However, subsequently imports has also recorded the highest ever monthly figures in December 2010 and rose by 30.8% at US $ 1.42 billion, while annual average of imports has shot up 32.4% US $ 13.51 billion in 2010. This has resulted in the trade deficit widening to US $ 5.2 billion in 2010 from US $ 3.1 billion in 2009.

Meantime, the largest contribution to the growth in exports in December 2010 had been from the industrial sector, led by significant increases in exports of textiles and garments, food and beverages and rubber products.

Earnings from garment exports to European Union and USA had topped by 33.9% and 31.4% respectively, in December 2010. Exports of food, beverages and tobacco products increased by 74.3%, year-on-year, mainly due to higher earnings recorded by exports of fruits, vegetables and animal fodder according to the Central Bank.

The economic data further noted that Rubber product exports consisted mainly of new pneumatic tyres and articles of apparel and clothing accessories, mainly gloves.

“However, earnings from machinery and equipment and the diamonds and jewellery exports recorded year-on-year declines in December 2010.” Central Bank said in its report.

On the contrary, earnings from agricultural exports had increased in December 2010, reflecting a healthy growth in all major sub sectors, mainly due to higher prices recorded by major export crops in the international market. The average export prices of tea and rubber had continued to remain high at US $ 4.56 per kg and US $ 4.26 per kg, respectively, in December 2010. Earnings from minor agricultural exports had increased by 28.8% to US $ 30 million in December, 2010 mainly due to significant increases recorded in the export volumes of cocoa, essential oils, cashew nuts and cardamoms.

On the contrary, Sri Lanka’s expenditure on imports of intermediate goods had increased in December 2010, led by higher expenditure incurred on petroleum imports. The average import price of crude oil had increased by 16.5% to US $ 90.37 per barrel in December 2010. Similarly, Textile imports also increased substantially in December 2010, indicating a better outlook for the garment industry. The expenditure on fertilizer imports increased by 119.4% to US $ 29 million reflecting higher import volumes due to the extended acreage cultivated in the Northern and Eastern provinces and extension of fertilizer support scheme to coconut cultivations. Import expenditure on food and drink had also increased in December 2010 mainly due to higher food prices in the international market.

Expenditure on non food consumer import category had increased mainly due to higher imports of motor vehicles.