To US $ 879 m:

February exports increase

In February 2012, earnings from exports increased by 7.6 percent to US $ 879 million while the expenditure on imports increased by 27.9 percent to US $ 1,581 million over the corresponding month of the previous year.

The largest contribution to the export earnings in February 2012 was from industrial exports.

Industrial exports grew by 3.3 percent, year-on-year in February 2012 mainly driven by gem, diamonds and jewellery and rubber products. Export earnings from gems, diamonds and jewellery increased by 34.1 percent.

Earnings from rubber based products increased by 17.5 percent due to the continuous high demand from major export destinations, particularly from the USA.

Earnings from textiles and garments exports, which accounted for about 40 percent of total export earnings, increased moderately by 1.4 percent. Earnings from petroleum products, transport equipment, food, beverages and tobacco, leather, travel goods footwear and ceramic products declined in February 2012.

Earnings from agricultural exports declined in February 2012, as a result of lower performance recorded in traditional agricultural exports of tea and rubber.

Earnings from tea exports declined by 11.6 percent, year-on-year, to US $ 105 million mainly due to geo political uncertainties in major tea importing countries in the Middle East.

Rubber exports declined by 32.9 percent to US $ 18 million due to elevated demand from the domestic rubber manufacturing industries. However, coconut exports increased by 46.5 percent in February 2012, mainly due to higher production and favourable prices in the international market. Among the non-traditional agricultural exports, earnings from spices declined by 40.4 percent in February 2012 due to a decrease in the volume of cinnamon, pepper and cloves exports.

Vegetables and minor agricultural exports also declined during this period, while unmanufactured tobacco and sea food performed well.

Expenditure on imports increased by 27.9 percent in February 2012 compared to the same month of the previous year. Expenditure on intermediate goods increased by 36.8 percent to US $ 947 million mainly due to higher petroleum imports. Expenditure on petroleum imports increased by 111.7 percent to US $ 506 million in February 2012 compared to that of February 2011, reflecting substantial increase in both price and volume of imports. The average price of crude oil imports increased by 16.2 percent to US $ 119.86 per barrel in February 2012.

Expenditure on imports of textiles and clothing, fertilizer, diamond and precious stones, vehicles and machinery parts and food preparations declined in February 2012.

Reflecting continuous expansion in economic activities, investment goods imports grew by 41.3 percent to US $ 380 million in February 2012. All three major categories of investment goods; transport equipment, building materials and machinery and equipment recorded growth rates of 74.4 percent, 38.6 percent and 25.6 percent, respectively.

Expenditure on imports of consumer goods declined by 7.5 percent to US $ 251 million in February 2012. Import expenditure on food and beverages declined as prices of major imported food items such as sugar, lentils, onions, chilies and potatoes were lower in the international market.

In cumulative terms, earnings from exports increased marginally by 3.3 percent to US $ 1,797 million during January - February 2012 compared with the same period of 2011.

Industrial exports, which accounted for 74.2 percent of total exports, increased by 1 percent during the first two months of 2012. Among the industrial exports, textiles garments and rubber products grew by 1.5 percent and 19.1 percent, respectively. Cumulative expenditure on imports during the first two months of 2012 increased by 24.7 percent to US $ 3,496 million. Expenditure on investment goods imports increased by 57.8 percent to US $ 903 million, mainly on account of machinery and equipment and transport equipment. Expenditure on imports of intermediate goods increased by 22.2 per cent to US $ 2,044 million during the first two months of 2012.

Expenditure on petroleum imports increased by 58.1 percent to US $ 1,021 million. However, expenditure on imports of textiles and clothing and gold decreased by 4.8 percent and 37 percent, respectively.

Expenditure on consumer goods during the first two months of 2012 decreased by 2.2 per cent to US $ 539 million. The trade deficit during January-February 2012 stood at US $ 1,699 million.

Tourist arrivals in February 2012 increased by 27 percent to 83,549 while earnings from tourism grew at a healthy rate of 35 percent to US $ 86 million compared to the corresponding month of 2011. Workers' remittances amounted to US $ 470 million in February 2012 compared to US $ 393 million in February 2011, recording a year-on year growth of 19.6 percent.

By end February 2012, gross official reserves, excluding Asian Clearing Union (ACU) balances, amounted to US $ 5,522 million.

Further, by end February 2012 total external reserves, which include gross official reserves and foreign assets of commercial banks amounted to US $ 6,774 million.

In terms of months of imports, gross official reserves and total external reserves by end February 2012 were equivalent to 3.2 months and 3.9 months, respectively.

Sources: Sri Lanka Customs and Central Bank of Sri Lanka