Export earnings up

Earnings from exports rose to US $ 663 million in September 2010, reflecting a year-on-year growth of 16.7 percent, due to increased earnings from agricultural and industrial exports.

Expenditure on imports increased by 35.9 percent to US $ 1,092 million in September 2010, reflecting increases in all major categories of imports.

The cumulative earnings from exports and expenditure on imports during the first nine months of 2010 increased by 11.4 percent and 36.5 percent, respectively. The trade deficit expanded to US $ 4,039 million during this period.

The largest contribution to the increase in export earnings came from the industrial exports, mainly due to higher exports of garments and textiles, rubber products and food, beverages and tobacco.

Earnings from exports of textiles and garments recorded higher earnings despite the withdrawal of GSP+ concession with effect from August 15, this year. While earnings from garment exports to the EU increased by 1.5 percent, garment exports to the USA grew by 13.4 percent.

Earnings from agricultural exports also increased recording a healthy growth in all key sub-categories due to increases in both, volumes and prices.

The average export price of tea continued to remain high at US $ 4.31 per kg, while rubber prices rose by 62.9 percent to US $ 3.08 per kg. Earnings from minor agricultural exports grew by 48.7 percent mainly due to the significant increases recorded in the export volumes of sesame seeds, pepper, cinnamon, arecanuts and fruits and the higher prices fetched by essential oils, vegetables, unmanufactured tobacco, and cinnamon.

All major categories of imports increased in September 2010. Expenditure on intermediate goods imports increased led by petroleum imports. Expenditure on imports of consumer goods increased significantly during September 2010, mainly due to higher imports of non-food consumer goods, of which nearly 54.0 percent comprised motor vehicles.

Food imports also increased due to higher expenditure incurred on import of sugar and milk products.

Expenditure on sugar imports increased by 72.2 percent to US$ 39.0 million, mainly due to a surge in sugar prices in the international market. Expenditure on all investment goods also increased significantly in September 2010.

During the first nine months of 2010, workers’ remittances increased by 13.4 per cent to US$ 2,814.5 million over that of the corresponding period of 2009.

The gross official reserves continued to remain significantly above the targeted level and stood at US$ 6.7 billion by end October 2010 without Asian Clearing Union (ACU) funds.

Based on the previous 12 month, average expenditure on imports of US$ 1,070 million per month, the gross official reserves, without ACU funds, were equivalent to 6.3 months of imports.