Exports earnings increase in January

Earnings from exports in January 2011 increased by 72.4 percent year-on-year, to US $ 813 million led by significant increases in exports of textile and garments and rubber products the central bank said yesterday. In comparison to January 2008, exports have increased by 47.3 per cent. Expenditure on imports increased by 21.3 percent to US $ 1,501 million in January 2011, mainly due to increases in imports of motor vehicles, electrical equipment and transport equipment. Accordingly, the trade deficit in January 2011 expanded by 10.2 percent, year-on-year, to US $ 688 million.

The largest contribution to the growth in exports in January was from the industrial sector, reflecting increases in all major categories of industrial exports. Continuing the increasing trend observed since the withdrawal of the GSP+ scheme in August 2010, earnings from textile and garments exports increased by 121.9 percent to US $ 385 million in January 2011, depicting a 143.5 percent increase to EU and 95.8 percent increase to USA. Exports of rubber products increased by 118.7 percent, year-on-year, reflecting higher levels of domestic value addition, particularly in the form of solid tyres and rubber gloves. Other key categories of industrial exports such as food, beverages and tobacco, machinery and equipment and petroleum based products also performed well in January 2011. Earnings from agricultural exports grew by 28.9 percent to US $ 184 million in January 2011, recording a healthy growth in all major sub sectors mainly due to higher prices.

The average export prices of tea and rubber remained high at US $ 4.79 per kg and US $ 4.89 per kg, respectively. However, rubber export volumes declined mainly due to tightened supply as well as the increased demand from the domestic industries for the manufacture of rubber based products. Earnings from minor agricultural exports increased by 20.5 percent to US $ 31 million in January, 2011 mainly due to higher prices fetched by cocoa products, essential oils and unmanufactured tobacco and increased volumes of fruits, cinnamon and vegetables. Expenditure on imports of intermediate goods increased by 15.7 percent, to US $ 812 million in January 2011. The average import price of crude oil increased by 22.6 percent to US $ 95.33 per barrel in January 2011, though import volume declined. Imports of textiles increased by 55.2 per cent in January 2011, indicating a better outlook for the garment industry.

Expenditure on fertilizer imports also increased in January 2011, mainly due to higher import volumes. Expenditure on imports of consumer goods increased significantly during the month of January 2011 led by non-food consumer goods, particularly, motor vehicles and electrical equipment. Import expenditure on food and drink also increased with the upward trend in food prices of sugar, wheat grain and milk products in the international market. All sub categories of investment goods imports increased in January 2011.

During January 2011, workers’ remittances increased by 20.1 percent to US $ 377 million over that of 2010.

The gross official reserves continued to remain above the targeted level and stood at US $ 6.7 billion by end February 2011 without Asian Clearing Union (ACU) balances. Based on the previous 12-month average expenditure on imports of US $ 1,167 million per month, the gross official reserves without ACU balances were equivalent to 5.8 months of imports.