Exports rise in first half

Garments, rubber lead in June:

Sri Lanka’s earnings from exports grew by 23 percent in June 2010 to US dollars 697 million led by higher earnings from the industrial and agricultural exports.

Earnings from exports and expenditure on imports have grown significantly on a year-on-year basis in June 2010, the Central Bank said yesterday.

Expenditure on imports increased by 32 percent to US dollars 1,114 million in June 2010 reflecting increases in all major categories of imports.

The cumulative earnings from exports and expenditure on imports have increased by 14 percent and 42 percent, respectively, during the first six months of 2010.

As a result, the trade deficit expanded to US dollars 2,844 million during this period.

The largest contribution to the growth in exports in June 2010 was from the significant increase in exports of apparel and rubber products.

Earnings from textiles and garments exports increased by 24 percent to US dollars 305 million, led by higher garments exports to the United States and the European Union, which increased by 34 per cent and 8 percent, respectively.

Earnings from exports of rubber products increased by 110 percent to US dollars 52 million, led by retreaded and pneumatic tyres, as well as other rubber products, such as gloves.

Earnings from exports of petroleum products also increased by 62 per cent. Agricultural exports, which accounted for 24 percent of export earnings in June 2010, also increased year-on-year, reflecting the strong performance by the tea sector.

The average export price of tea in June 2010 was US dollars 4.32 per kilogram reflecting a year-on-year growth of 11 percent.

The minor agricultural exports earnings increased by 62 percent mainly due to higher prices fetched by cardamoms and essential oils and significant increase in the export volumes of sesame seeds, cocoa, cloves and pepper. Expenditure on imports increased rapidly, mainly due to the higher expenditure on petroleum imports in June 2010.

The average import price of crude oil rose by 6 percent, year-on-year, to US dollars 77.26 per barrel. Import expenditure on fertilizer increased in June 2010, compared with the same period in 2009, mainly due to the substantially higher import volumes.

Expenditure on consumer goods also increased, with notable increases in the non-food consumer goods imports led by motor vehicles and electrical equipment, spurred by reductions in tariffs on these products with effect from June 1, 2010.

Imports of investment goods also increased by 30 percent in June 2010 led by transport equipment, such as buses, vans, lorries, and auto trishaws, which increased by 257 percent. Imports of building materials also increased by 38 percent during the month.

During the first half of 2010, workers’ remittances increased by 13.5 percent over that of the corresponding period of 2009 to US dollars 1,820 million.