December 2010 marks highest ever monthly values

Boom in exports, imports

Exports and imports have recorded the highest ever monthly values in December 2010. Earnings from exports increased by 34 percent, year-on-year, to US dollars 968 million and expenditure on imports rose by 30.8 percent to US dollars 1,429 million.

The cumulative earnings from exports increased by 17.3 percent to US dollars 8,307 million during the year 2010 recording the highest annual value so far in the history and the cumulative expenditure on imports increased by 32.4 percent to US dollars 13,512 million.

Accordingly, the trade deficit expanded to US dollars 5,205 million in 2010 from US dollars 3,122 million in 2009, the Central Bank said yesterday.

The largest contribution to the growth in exports in December was 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 EU and USA increased by 33.9 percent and 31.4 percent, respectively, in December 2010.

Exports of food, beverages and tobacco products increased by 74.3 percent, year-on-year, mainly due to higher earnings recorded by exports of fruits, vegetables and animal fodder. 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.

Earnings from agricultural exports 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 continued to remain high at US dollars 4.56 per kg and US dollars 4.26 per kg, respectively, in December 2010.

Earnings from minor agricultural exports increased by 28.8 percent to US dollars 30 million in December, 2010 mainly due to significant increases recorded in the export volumes of cocoa, essential oils, cashew nuts and cardamoms.

Expenditure on imports of intermediate goods increased in December 2010, led by higher expenditure incurred on petroleum imports. The average import price of crude oil increased by 16.5 percent to US dollars 90.37 per barrel in December 2010. 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 percent to US dollars 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 increased in December 2010 mainly due to higher food prices in the international market. Expenditure on non food consumer import category also increased mainly due to higher imports of motor vehicles. All categories of investment goods imports increased in December 2010.

During 2010, workers’ remittances increased by 23.6 percent to US dollars 4,116 million over that of 2009. The gross official reserves continued to remain above the targeted level and stood at US dollars 6.6 billion by end January, 2011 without Asian Clearing Union (ACU) balances.

Based on the previous 12-month average expenditure on imports of US dollars 1,133 million per month, the gross official reserves without ACU balances, were equivalent to 5.9 months of imports.