February exports up

Earnings from exports in February 2011 increased by 36.8 percent year-on-year, to US $ 860 million led by exports of textiles and garments, petroleum and rubber products Central Bank said.

Expenditure on imports increased by 27.0 percent to US $ 1,236 million in February 2011, mainly due to increases in imports of motor vehicles, petroleum, textiles and garments and machinery and equipment. The trade deficit in February 2011 expanded by 9.1 percent, year-on-year, to US $ 376 million. Cumulatively, however, the trade deficit contracted by 1.2 percent in the first two months of 2011 compared to the corresponding period of 2010, as year-on-year, earnings from exports grew by 51.9 per cent and expenditure on imports rose by 25.2 percent.

The industrial sector continued to make the largest contribution to the increase in exports, reflecting higher earnings from garments exports, of which the EU and USA accounted for 54.8 percent and 35.1 percent, respectively. Exports of petroleum products increased by 274.7 percent reflecting higher volumes and prices, compared to February 2010. Earnings from exports of rubber products increased by 70.4 percent, year-on-year, reflecting high levels of domestic value addition amidst higher demand in the international market. While earnings from exports of machinery and equipment increased, those from food, beverages and tobacco and diamond and jewellery declined. Earnings from agricultural exports grew in February 2011, mainly due to the higher prices that prevailed in the international market.

The average export prices of tea and rubber remained high at US $ 4.68 per kg and US $ 5.35 per kg, respectively. However, rubber export volumes remained low at 4.9 million kg mainly due to tighter 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 16.2 percent to US $ 31 million in February, 2011 led by the high prices of cocoa products, essential oils and unmanufactured tobacco.

Expenditure on imports of intermediate goods increased in February 2011 led by higher petroleum prices amidst geopolitical uncertainties. The average import price of crude oil increased by 31.9 percent to US $ 103.18 per barrel in February 2011. Expenditure on fertilizer and textile imports also increased in February 2011. Expenditure on imports of consumer goods increased in February 2011 led by non-food consumer goods, particularly, motor vehicles and electrical equipment. Import expenditure on food and drink decreased in February 2011 due to the lower import volumes of rice, sugar and wheat. Investment goods imports increased in February 2011 reflecting increases in the machinery and transport equipment categories.

During February 2011, workers’ remittances increased by 26.8 percent to US $ 393 million over that of 2010. The gross official reserves continued to remain above the targeted level and stood at US $ 7.0 billion by end March 2011 without Asian Clearing Union (ACU) balances. Based on the previous 12-month average expenditure on imports of US $ 1,210 million per month, the gross official reserves without ACU balances were equivalent to 5.8 months of imports.