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Monday February 6th, 2023

Sri Lanka exports down 8.8-pct in Oct, apparel falls 13-pct

ECONOMYNEXT – Sri Lanka’s export earnings in October 2022 drops 8.18 percent to 1,094 million dollars compared to the same period last year due to a decrease in earnings from apparels, eat, rubber, coconuts as the key export market are going high inflation and an energy crisis.

“This was mainly due to the decrease in export earnings from Apparel & Textiles, Tea, Rubber based Products, Coconut based Products, Spices & Essential Oils and Fisheries sector. Further, the impact of global crisis also affecting to decrease export earnings of major products,” Exports Development Board said in it’s report/

In the ten months to October, exports were up 9.33 percent to 11 billion US dollars.

“For the next six months, there is a very low number of orders,” a senior official at EDB told Economy Next.

“Hence the currency coming in is a little bit low but based on the trend it is like one billion a month during these last ten months and up to October, we have received over 10 billion of export revenue and first being the apparel.”

Sri Lanka is currently in the worst currency crisis in the history of the island’s soft-pegged central bank with the rupee collapsing from 200 to 360 in a failed attempt to float the currency (suspend convertibility) with a surrender rule in place.

At 370 the surrender rule and dollars sales continue.

Exports of Apparel & Textiles fell 13.19 percent to 441.89 million dollars in October 2022.

Tea exports in October fell 0.76 percent to 108.7 million US dollars.

“We have to be very agile these days because markets are changing and our traditional markets, especially the western markets going forward might be disrupted a little more,” another official at EDB said.

“So we have to now look at alternate markets because there is a global disruption in exports and imports and the only way out is to find other markets.”

Export earnings from Rubber based products have decreased by by 6.10 percent to 86.3 million dollars, EDB said exports of pneumatic & Retreated Rubber Tyres & Tubes did not perform well.

Coconut products fell 7.12 percent to 72.41 million dollars.

Export of Seafood dipped by 20 percent to 19.56 million dollars. Crabs exports have done well, EDB said.
(Colombo/Nov29/2022)

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  1. ase says:

    So, the real downfall has begun.

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  1. ase says:

    So, the real downfall has begun.

Sri Lanka to address SME tax problems at first opportunity: State Minister

ECONOMYNEXT – Problems faced by Sri Lanka’s small and medium enterprises from recent tax changes will be addressed at the first opportunity, State Minister for Finance Ranjith Siyambalapitiya said.

Business chambers had raised questions about hikes in Value Added Tax, Corporate Income Tax and the Social Security Contribution Levy (SSCL) that’s been imposed.

It should be explored on how to amend the Inland Revenue Act, Siyamabalapitiya said, adding that the future months should be considered as a period where the country is being stabilized.

Both the VAT and SSCL are effectively paid by customers, but the SSCL is a cascading tax that makes running businesses difficult.

In Sri Lanka SMEs make up a large part of the economy, accounting for 80 per cent of all businesses according to according to the island’s National Human Resources and Employment Policy.

(Colombo/ Feb 05/2023)

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Sri Lanka revenues Rs158.7bn in Jan 2023 up 51-pct

ECONOMYNEXT – Sri Lanka’s government revenues were 158.7 billion rupees in January 2023 but expenditure and debt service remained high, Cabinet spokesman Minister Bandula Gunawardana said.

In January 2022 total revenues were Rs104.5 billion according to central bank data.

Sri Lanka’s tax revenues have risen sharply amid an inflationary blow off which had boosted nominal GDP while President Ranil Wickremesinghe has also raised taxes.

Departing from a previous strategy advocated by the IMF expanding the state and not cutting expenses, called revenue based fiscal consolidation, he is attempting to do classical fiscal consolidation with spending restraint.

President Ranil Wickremesinghe has presented a note to cabinet requesting state expenditure to be controlled, Gunawardana told reporters.

State Salaries cost 87.4 billion rupees.

Pensions and income supplements (Samurdhi program) were29.5 billion rupees.

Other expenses were 10.8 billion rupees.

Capital spending was   21 billion rupees.

Debt service was 377.6 billion rupees for January which has to be done with borrowings from Treasury bills, bonds and a central bank provisional advance of 100 billion rupees, Gunawardana said.

Interest costs were not separately given. (Colombo/Feb05/2023)

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Sri Lanka’s Ceylon Tea prices down for second week

ECONOMYNEXT – Sri Lanka’s Ceylon Tea prices fell for the second week at an auction on January 31, with teas from all elevations seeing a decline, data showed.

“In retrospect, the decline in prices would be a price correction owing to the overall product quality and less interest from some key importers due to the arrival of cargo at destinations ahead of schedule,” Forbes and Walker tea brokers said.

The weekly sale average fell from 1475.79 rupees to 1465.40 rupees from a week ago, according to data from Ceylon Tea Brokers.

The tea prices are down for two weeks in a row.

High Growns

The High Grown sale average was down by 20.90 rupees to 1380.23 rupees, Ceylon Tea Brokers said.

High grown BOP and BOPF was down about 100 rupees.

“Ex-Estate offerings which totalled 0.75 M/Kg saw a slight decline in quality over the previous week” Forbes and Walker said.

OP/OPA’s in general were steady to marginally down.

Low Growns

In Low Grown Teas, FBOP 1 was down by 100 rupees and FBOP was down by 50 rupees while PEK was up by 150 rupees.

The Low Growns sale average was down by 8.55 rupees to 1547.93 rupees.

A few select Best BOP1s along with Below Best varieties maintained.

OP1                     Select Best OP1’s were steady, whilst improved/clean Below Best varieties maintained.   Others and poorer sorts were easier.

PEKOE                 Well- made PEK/PEK1s in general were steady, whilst others and poorer sorts were down.

Leafy and Semi Leafy catalogues met with fair demand,” Forbes and Walker brokers said.

“However, the Small Leaf and Premium catalogues continued to decline.

“Shippers to Iran were very selective, whilst shippers to Türkiye and Russia were fairly active.”

This week  2.2 million Kilograms of Low Growns were sold.

Medium Growns

Medium Grown BOP and BOPF fell by around 100 rupees

The Medium Growns sale average was down by 33.40 rupees to 1199.4 rupees.

“Medium CTC teas in the higher price bracket witnessed a similar trend, whilst teas at the lower end were somewhat maintained subject to quality,” Forbes and Walker brokers said.

“Improved activity from the local trade and perhaps South Africa helped to stabilize prices to some extent.”

OP/OPA grades were steady while PEKOE/PEKOE1 were firm, while some gained 50-100 rupees at times.

Well-made FBOP/FBOPF1’s were down by 50-100 rupees per kg and more at times.

(Colombo/Feb 5/2023)

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