Export performance in December 2022
Earnings from merchandise exports decreased by 9.7% y-o-y to US$ 1,044 mn in December 2022 as per the data released by the Customs. This was mainly due to the decrease in export earnings from apparel and textiles, tea, rubber based products, and coconut based products, food and beverages, spices and essential oils and fisheries products.
The reason for this decline was due to the ongoing recession in major markets due to rising cost of production and energy. Imports declined sharply due to inflation and demand for goods and services were reduced.
Major exports in December 2022
Major product sectors except electrical and electronic components and diamonds, gems and jewellery; export earnings from apparel and textiles, tea, rubber based products, coconut based products, spices and concentrates, food and beverages and seafood sectors recorded declines in December 2022 as shown in the table 1 below.
Exports of apparel and textiles decreased by 9.56% y-o-y to US$ 480.28 mn in December 2022. The decrease was driven by apparel and textiles.
Export earnings from tea in December 2022 which made up 11% of merchandise exports, decreased by 3.01% y-o-y to US$ 107.29 mn. This was mainly due to the lower Export of both bulk tea (-0.53%) and tea packets (-4.71%).
Export earnings from Rubber and Rubber Finished products have decreased by 20.34% y-o-y to US$ 74.47 million in December 2022, with poor performance in exports of pneumatic and retreated rubber tyres and tubes (-20.44%) and export of Industrial and surgical gloves (-27.31%).
On monthly analysis, all three sub sectors categorised under the coconut-based products; kernel products, fiber products and shell products decreased by 19.12%, 21.14% and 24.53% respectively in December 2022 compared to December 2021.
Export earnings from Spices and Essential Oils decreased by 28.5% to US$ 31.39 mn in December 2022 compared to December 2021 due to the poor performance in export of Cinnamon (-4.51%) and Pepper (-69.54%). Export earnings from Seafood declined by 20.01% to US$ 21.31 mn in December 2022 compared to December 2021. Except for lobsters and crabs, export earnings from frozen fish, fresh fish, shrimps and other edible fish declined by 22.8%, 27.6%, 43.24% and 0.47% in December 2022.
Export earnings from Ornamental fish also declined by 2.9% to US$ 2.13 mn in December 2022 compared to December 2021.
However, export earnings from the electrical and electronics components increased by 16.18% y-o-y to US$ 42.94 mn in December 2022 with strong performance in exports of Insulated wires and cables (0.48%) and other electrical and electronic products (27.92%).
Major exports from January–December 2022
For the period January-December 2022, merchandise exports increased by 4.6% to US$ 13,070.6 million compared to the corresponding period of 2021.
Apparel and Textile exports increased by 9.56% to US$ 5,933.52 mn during the period January to December 2022 compared to the corresponding period in 2021. Although export earnings from Apparel increased by 10.74% to US$ 5,482.82 mn, earnings from Textile exports declined by 3.0% to US$ 450.7 mn during the period January to December 2022 compared with 2021.
Earnings from the export of Electrical and Electronic Components (EEC) increased by 14.68% to US$ 483.28 mn in the period January to December 2022 compared to the corresponding period of 2021. Export of Insulated wires increased by 14.51% during 2022 to US$ 80.96 mn compared with the corresponding period of 2021.
Export of printed circuits, switches/ boards and panels, electrical transformers and other electrical and electronic products increased by 75.54%, 12.81%, 3.34% and 16.51% from January to December 2022 compared with the corresponding period of the previous year.
However, export earnings from seafood decreased by 1.81% to US$ 269.02 mn in the period January to December 2022 compared to 2021. Also, earnings from export of ornamental fish increased by 3.67% to US$ 21.74 mn from January to December 2022 compared to the corresponding period of 2021.
Export earnings from tea decreased by 4.95% to US$ 1,258.81 mn during the period January to December 2022 compared with the corresponding period of 2021. Exports of all the subcategories of tea sector except tea bags; tea packets (-5.57%), bulk tea (-4.52%,), instant tea (-6.78%) and green tea (-23.8%) decreased during the period January to December 2022 compared with the corresponding period of 2021.
Export earnings from rubber and rubber finished products decreased by 6.79% to US$ 1,018.38 mn in January – December 2022 compared with the corresponding period of 2021 attributed to lower exports of Industrial and surgical Gloves (-19.0%).
Despite the decrease recorded in rubber exports, earnings from exports of pneumatic and retreated rubber tyres and tubes increased by 0.35% during the period January to December 2022 compared with the same period of 2021.
For the period January to December 2022, export earnings from Coconut and Coconut based products recorded a decrease of 2.27% to US$ 817.09 mn. Although the increase recorded in exports of coconut shell products (11.12%), earnings from coconut fiber products and coconut shell products decreased by 6.34% and 3.42% in 2022 compared with 2021.
Export earnings from spices and essential oils decreased by 18.93% to US$ 370.3 mn in the period January to December 2022 compared to year 2021 due to the poor performance in all the sub categories; Cinnamon (-5.75%), pepper (-33.34%), cloves (-42.12%), cardamom (-53.33%) and essential oils (-33.83%).
Export performance in major markets
Except Italy, Netherlands, United Arab Emirates, Japan and Bangladesh, other countries which were considered as top 15 markets recorded declines during the month of December 2022 compared to December 2021 as shown in below table 2.
Exports to the United States, Sri Lanka’s single largest export destination, decreased by 14.64% to US$ 256.2mn compared to the month of December 2021.
However, the single largest export destination, the United States of America recorded US$ 3,319.85mn in exports in 2022 with a year-on-year increase of 8.18% in comparison to US$ 3,319.85mn recorded in 2021.
The better performance led by increase in exports of Apparel and Textile (10.38%)
In parallel, exports to United Kingdom as the second largest trading partner recorded decrease of 2.38% to US$ 79.12mn in December 2022 compared with December 2021.Cumulative export earnings during the year 2022 increased by 3.46% to US$ 966.04mn compared to the last year, which was mainly driven by the improvements in Apparel and Textile exports (5.37%).
Exports to FTA partners
In December 2022, exports to Free Trade Agreement (FTA) partners which constituted 7.2% of Sri Lanka’s total merchandise exports declined by 19.63% y-o-y to US$ 71.7mn. Decline in exports were recorded to India which drop by 28.0% to US$ 64.97mn and Pakistan dropped by 25.4% y-o-y to US$ 6.73mn.
During the period January to December 2022, exports to Free Trade Agreement (FTA) partners accounted for 7% of total merchandise exports with an increase of 3.0% and amounting to US$ 934.39mn.
Although Exports to India has increased by 4.9% y-o-y to US$ 854.88mn, exports to Pakistan has decreased by 13.5% to US$ 79.51mn during the year 2022 compared to the year 2021. Growth in Exports to India was mainly supported by increased exports of Animal Feed (11.75%), Arecanuts (45.24%), Woven fabrics (46.33%) and Wood pulp (18.06%).
Export performance in the regions
Following table indicates the comparison of region wise exports during the year 2021 and 2022 and the months of December 2021 and 2022. The USA and EU accounted for 48% of total Sri Lanka’s merchandise exports.
On a region-wise comparison of exports to all regions except Middle East and ASEAN regions, other regions recorded negative growth rates in December 2022 compared with December 2021. Except African and CIS countries, exports to other regions increased during the year 2022 compared with the year 2021.
During the year 2022, breakdown of exports to the top five EU markets which accounted for 78% of Sri Lanka’s total exports to the EU were; Germany US$ 744.57mn (decreased by 1.27%), Italy US$ 640.18 mn (increased by 10.58%), Netherlands US$ 428.27 mn (increased by 0.60%), Belgium US$ 307.68 mn (decreased by 7.97%) and France US$ 257.52 mn. (increased by 4.72%).
Export of services
The estimated value of services exports for the year 2022 was 1,876.3 million dollars, decreasing 5.9% over the corresponding period of 2021.
The services exports estimated by EDB consist of ICT/BPM, Construction, Financial services and Transport and Logistics. - Policy and Strategic Planning Division, Export Development Board (EDB)