Sri Lanka apparel exports up in June, commodities values down
ECONOMYNEXT – Sri Lanka’s apparel exports rose 1.4 percent from a year earlier to $430.2 million in June 2016, but agriculture and petroleum exports were down, partly due to lower prices, the Central Bank said.
Apparel exports were up 4.5 percent to $2,514 million in the six months to June.
The US, the UK, India, Germany and Italy were the top export markets, the Central Bank said.
Global commodity prices including oil, foods, base metals and precious metals are weak or falling as US monetary policy tightens and the US dollar strengthens against real commodities and other currencies.
"Earnings from exports declined for the 16th consecutive month in June 2016 on year-on-year basis mainly due to the substantial reduction in price levels of export commodities in the international market," the Central Bank said.
There is speculation of another 1980s and 1990s style ‘Great Moderation’ of low or steady commodity prices if US continues to raise rates and follow prudent policy.
Oil prices fell below $20 after the collapse of the so-called dotcom bubble, but the Great Moderation ended with the Fed’s ‘mother of all liquidity bubbles’, which started in 2000 with low interest rates for extended periods.
The bubble fired food and commodity prices to unprecedented levels, and generated the housing bubble and the so-called ‘Great Recession’ in 2008/2009. Quantity easing again pushed up prices, but now the US dollar is strengthening with at least one rate rise.
In June petroleum product exports were down to $23 million, with lower bunkering sales and lower prices.
Agricultural exports were down 5.6 percent to $214 million, with spices down 20 percent to $32.0 million. Seafood was also down 3.9 percent to $12.9 million. (Colombo/Sept06/2016)