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Exports and imports increased during the first eight months of 2004. The export earnings increased by 8 per cent to US dollars 3,594 million in the first eight months of 2004 as compared with US dollars 3,341 millions in the same period 2003.

Expenditure on imports amounted to US dollars 5,056 million, up by 20 per cent from US dollars 4,217 million in the first eight months of 2003. As a result, the trade deficit grew by US dollars 586 million in the first eight months of 2004 resulting in an overall deficit of US dollars 1,462 million, a press release from the Central Bank said.

Export Performance

Export earnings increased by 3 per cent to US dollars 482 million in August 2004 from US dollars 470 million in August, 2003. The moderation of growth of exports in August, 2004 was mainly due to the marginal decline of apparel exports which accounted for 50 per cent of total exports.

The export of textiles and garments declined by 1 per cent to US dollars 242 million in August 2004 compared to US dollars 245 million in 2003 mainly due to sluggish seasonal demand.

Other industrial categories that recorded declines in exports were ceramic products (14 per cent) and leather, travel and footwear (30 per cent).

However, the rest of the industrial sub categories have maintained its growth momentum in August 2004. Those were food and beverages (21 per cent), manufactured tobacco (27 per cent), rubber based products (20 per cent), chemical products (61 per cent), plastics (14 per cent) and machinery and equipment (20 per cent).

The earnings from agriculture exports increased by 6 per cent, driven mainly by increases in three plantation products. Tea exports, that accounted for 13 per cent of total exports, increased by 10 per cent to US dollars 65 million in August 2004 compared with 2 per cent decline in August 2003 mainly due to the higher export orders received from Middle East countries and Commonwealth of Independent States (CIS) countries.

The average price of tea increased by 6 per cent to US dollars 2.42 per kg in August 2004 from US dollars 2.28 per kg in August 2003. Meanwhile the volume of tea exported increased by 4 per cent to 27 million kg. The higher export income from coconut and rubber is attributed to the increase in both volumes exported and prices.

Export earnings in the first eight months of 2004 increased by 8 per cent compared with 11 per cent growth in same period 2003. Industrial exports dominated by textiles and garments contributed 84 per cent to the overall growth while agricultural exports contributed 27 per cent.

The export earnings from textiles and garments increased by 4 per cent to US dollars 1,735 millions in the first eight months of 2004 compared to the same period in 2003.

Agricultural exports grew by 11 per cent in the first eight months of 2004 compared with 2 per cent decline during the corresponding period in 2003, reflecting higher performance in all plantation crops.

Exports of rubber and coconut registered healthy growth rates of 59 per cent and 73 per cent respectively in the first eight months of 2004. The exports of rubber benefited from the supply shortage in the world market due to the adverse weather conditions prevailed in rubber producing countries, unrest in southern Thailand and the growing demand for natural rubber.

The growth of the coconut exports was driven by the higher exports of desiccated coconut. Exports of desiccated coconut increased by 84 per cent during first eight months of 2004, benefited by the increased export orders received from South Asian and Middle Eastern countries.

However, the export of minor agricultural crops decreased by 2 per cent. The exports earnings from unmanufactured tobacco, pepper, cardamoms and nutmeg & maize also declined in 2004.

Import Performance

Expenditure on imports increased by 26 per cent to US dollars 660 million in August 2004 compared to 14 per cent growth in August 2003.

The growth of the imports is the combined outcome of increases in prices and volumes. The sharp increase in imports during August 2004 was largely attributed to the expansion of imports of intermediate and investment goods.

The surge in imports of intermediate goods was driven by the higher petroleum and textiles import bills. The import expenditure on intermediate goods increased by 23 per cent to US dollar 369 million in August 2004 compared with US dollars 299 million in August 2003.

The expenditure on petroleum products increased by 22 per cent to US dollars 111 million in August 2004 from US dollars 92 million a year ago, due to escalating international oil prices.

The imports of textiles also increased by 24 per cent to US dollars 112 million in August 2004, reflecting expansion of the apparel industry. After registering high growth for three consecutive months, fertiliser imports decreased to US dollar 0.4 million in August 2004 from US dollar 6 million, a year earlier.

In intermediate good category, the imports of chemical elements and compound, paper and paper boards and diamonds also increased in August 2004. Diamond imports decreased by 11 per cent in August 2004.

The imports of consumer goods increased by 8 per cent in August, 2004 mainly due to the increases in milk products (26 per cent) and other consumer goods (27 per cent), the release said.

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