Export earnings increase

Earnings from exports increased significantly by 36.0 percent, year-on-year, to US dollars 834 million in November, 2010, the Central Bank said yesterday.

This is the highest monthly increase since October 2004, reflecting substantial increases in some of the relatively newer categories of exports, such as boats, bicycles, electrical equipment, rubber products, petroleum products, food, beverages and tobacco.

Cumulative earnings from exports during the first eleven months of 2010 increased by 15.4 percent, year-on-year, to US dollars 7,339 million, reflecting one of the highest cumulative growth rates in the recent past. Expenditure on imports increased by 19.1 percent to US dollars 1,113 million in November, 2010 mainly due to higher imports of intermediate goods.

Cumulative expenditure on imports during the first eleven months of 2010 increased by 32.6 percent, year-on year, to US dollars 12,083 million.

As a result, the trade deficit expanded to US dollars 4,744 million during this period compared to US dollars 2,753 million in the corresponding period of 2009.

The largest contribution to growth in export earnings came from the industrial exports, followed by the agricultural exports. Industrial exports, which accounted 76 percent of total export earnings, were led by textile and clothing exports.

Earnings from garment exports to Sri Lanka’s major markets, the EU and USA, increased by 39.2 percent and 28.7 percent respectively, in November 2010.

Earnings from machinery and equipment exports increased significantly to US dollars 67 million in November 2010. This comprised mainly of transport equipment, such as boats and bicycles, and electrical equipment, such as transformers, static converters, inductors, circuits and insulated cables. Earnings from rubber products, petroleum products and food, beverages and tobacco categories also contributed towards the growth in industrial export earnings in November 2010.

The average export prices of tea and rubber remained high at US dollars 4.55 per kg and US dollars 4.14 per kg respectively, in November 2010. Expenditure on imports increased led by higher imports of intermediate goods, particularly petroleum. Import price of crude oil averaged at US dollars 84.85 per barrel in November 2010 reflecting an increase of 7.2 per cent over US dollars 79.18 per barrel in November 2009.

Expenditure on imports of consumer goods increased in November 2010 due to higher imports of non-food consumer goods, led by motor vehicles. However, expenditure on food imports decreased mainly due to lower import volumes of rice, sugar and wheat grain, while expenditure on imports of milk products increased by 48.8 percent in November 2010, reflecting higher international prices due to global supply constraints.

Imports of all sub categories of investment goods, except transport equipment, increased in November 2010.

During the first eleven months of 2010, workers’ remittances increased by 23.9 percent to US dollars 3,761.9 million (after adjusting for revisions by commercial banks) over that of the corresponding period of 2009.

The gross official reserves continued to remain above the targeted level and stood at US dollars 6.6 billion by end December, 2010 without Asian Clearing Union (ACU) funds. Based on the previous 12-month average expenditure on imports of US dollars 1,108 million per month, the gross official reserves without ACU funds, were equivalent to 6.0 months of imports, the Central Bank said.