Exports lose steam in Sept. as imports take off

As the growth of imports weighed on the export earnings, the country’s trade deficit in September widened to $ 764 million compared to $ 587 million in September 2013.

However, on a cumulative basis, the trade deficit during the first nine months of 2014 narrowed by 3.6% compared to the corresponding period in 2013.


The Central Bank said earnings from exports increased by 0.5%, year-on-year, in September 2014 to $ 903 million while the cumulative earnings increased by 13.0% to $ 8,288 million during the first nine months of 2014.

The largest contribution to the export growth in September 2014 was from textiles and garments followed by coconut and printing industry products. Export earnings of textiles and garments grew by 4.4% in September 2014 supported by a substantial improvement in exports of outerwear. Furthermore, the increase of earnings of coconut exports was mainly led by the significant increase in kernel product exports.

However, some major exports such as tea, spices, precious metals and gem and diamonds declined during the month under consideration, on year-on-year basis, mainly due to the higher exports recorded in September 2013.

Additionally, export earnings of petroleum products, particularly on bunkering and aviation fuel, were significantly affected by the heightened competition from major regional players.

The major export destinations from January to September 2014 were USA, UK, Italy, India and Germany accounting for around 50% of total exports.


Expenditure on imports increased by 12.2%, year-on-year, to $ 1,667 million in September 2014, while on a cumulative basis, imports grew by 5.4% to $ 14,222 million during the first nine months of 2014. The increase in import expenditure in September 2014 was mainly due to the significant increase in imports of transport equipment, particularly a dredger vessel followed by imports of vehicles such as motorcycles and motorcars for personal use.

Further, rice imports also increased significantly during the month as a result of a shortfall in domestic rice production during the year. However, the expenditure on fuel imports declined significantly during the month due to a sharp reduction in crude oil imports as the available crude oil stocks were used for the refineries during the month.

As a result of the substantial decline in the volume of fertiliser imports, the import expenditure on fertiliser declined during the month. The import expenditure on investment goods showed a broad based increase except for the decline in imports of machinery and equipment due to lower imports of engineering equipment.

During the first nine months of 2014, the main import origins were India, China, UAE, Singapore and Japan accounting for about 60% of total imports.

http://www.ft.lk/2014/11/10/exports-lose-steam-in-sept-as-imports-take-off/