Earnings from exports in March hit an all-time high of $ 1.07 billion, up by 28.6% from a year earlier and boosting first quarter performance by 19.1% to $ 2.8 billion.
“Sri Lanka’s external trade improved further in March 2014 continuing the positive development from the second half of 2013,” the Central Bank said yesterday, adding, “Significant expansion in all major export categories contributed to the high growth in exports in March 2014.”
Expenditure on imports increased by 8.2% to $ 1,672 million in March 2014. Accordingly, the cumulative trade deficit during the first three months of 2014 contracted by 13.5 per cent, year-on-year, to $ 1,862 million. The largest contribution to overall export growth came from
industrial exports, which grew by 25.7%, year-on-year, to $ 779 million. Almost all sub categories of industrial exports grew in March 2014 except gems, diamonds and jewellery and petroleum products.
As the leading driver of the growth in industrial exports, earnings from export of textiles and garments grew by 32.6%, year-on-year, to $ 457 million in March 2014 reflecting significant increases in exports to both traditional and non-traditional markets. Export earnings from transport equipment increased by more than six fold due to the export of ships, boats and floating structures. Rubber product exports also increased by 10.9%, mainly due to an increase in export of rubber tyres.
Meanwhile, earnings from gems, diamonds and jewellery declined by 21.9%, year-on-year, due to the substantial decline in diamond exports as a result of low global demand. Export earnings from petroleum products which mainly comprise bunkering and aviation fuel declined by 14.4%, due to a decline in export volumes despite the increase in prices.
Earnings from agricultural exports grew by 22.4%, year-on-year, in March 2014 to $257 million, mainly due to the healthy performance in export of tea and coconut products. Export earnings from tea increased by 20.3% to $155 million, recording a historically high monthly value. This was a combined outcome of a 14.3% increase in export volume and an increase in the average export price of one kilogram of tea by 5.2% to $5.02.
Earnings from coconut product exports increased by 106.9% due to improved performance in both kernel and non-kernel coconut products in terms of both price and volume. Export earnings from minor agricultural products and seafood also increased by 87.7% and 5.6%, respectively, in March 2014. However, earnings from export of spices declined by 20.1%, mainly due to the decline in export of pepper and cloves, despite the increase in cinnamon exports.
Further, earnings from rubber exports declined by 32.1%, year-on-year, in March 2014, due to significant declines in both export volumes and prices.
Expenditure on imports increased by 8.2%, year-on-year, to $1,672 million in March 2014, reflecting increases in intermediate and consumer goods imports. Expenditure on intermediate goods imports increased by 12.7%, year-on-year, to $1,045 million with notable increases in fuel, textile and textile articles and fertiliser imports.
Import expenditure on fuel increased substantially by 19.1% due to increases in crude oil and refined petroleum products imports by 65.9% and 11%, respectively, owing to higher usage of thermal power generation and an increase in petroleum prices in the international market compared to the corresponding period in the previous year.
Import expenditure on textile and textile articles also increased by 40%, year-on-year to $182 million in line with the continuous growth of textile and garment exports from Sri Lanka. Despite the reduction in prices, expenditure on importation of fertiliser increased in March 2014, due to the high usage of fertilizer for paddy and other crops during the Yala season as well as the low base.
Meanwhile, continuing the declining trend observed in the recent past, import expenditure on diamonds and precious stones and precious metals including gold declined by 68.5%. Import of wheat and maize, base metals and mineral products also declined during the month.
Import expenditure on consumer goods increased by 18.5%, year-on-year, to $303 million in March 2014, reflecting increases in both food and non-food consumer goods imports. Import of food and beverages increased by 8.9%, due to a substantial increase in import expenditure on milk powder and sugar, on account of the increase in the price of milk powder and sugar in the international market.
However, import of many sub categories including oils and fats, seafood, spices, fruit and cereals and milling industry products declined during the period under review. In March 2014, non-food consumer goods imports increased by 27.3%, mainly due to the significant increase in vehicle imports by 59.3% and clothing and accessories imports by 56.6%.
Expenditure on imports of investment goods declined by 10.5%, to $323 million in March 2014, mainly due to the decline in import of building materials and transport equipment. Import of building materials declined by 24.2%, led by declines in import of cement as well as iron and steel.
Import expenditure on transport equipment decreased by 17.4% with all sub categories recording declines. Expenditure on import of machinery and equipment increased by 2.2%, due to the increase in import of engineering equipment and textile industry machinery, although import of many sub categories including electronic equipment, telecommunication devices and office machines declined.