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Sri Lanka exports rebound in June 2020 as Covid-19 controlled, PPE $100mn

ECONOMYNEXT – Sri Lanka’s exports in June 2019 was down 26 percent from a year earlier to 906.02 million US dollars, but extended a steep recovery seen in May after Coronavirus lockdown ended, the island’s Export Development Board said.

The EDB calculated PPE related exports at106.46 million US dollar in June 2020.

“Exports have become a national priority, now more than ever, it is certainly impressive to see a strong V-shaped recovery in the export sector, comparatively to the lowest point in April 2020, exports are up 327 percent,” Chairman Prabhash Subasinghe said.

He said there was a chance for a ‘favourable’ balance of trade.

A ‘favourable’ trade balance is a Mercantilist idea dating back to the British East India Company and beyond who did not understand the entire balance of payments and that services and capital inflows (government borrowings and private foreign investment) triggered imports.

A country which has weak or contracting credit, is in difficulties, does not get much FDI, or is repaying the foreign debt on a net basis can see a trade surplus.

Sri Lanka’s economic activities have recovered strongly with Coronavirus controlled by authorities with aggressive tracing and quarantined despite restrictions in testing which led to explosions of clusters.

However, due to excess money printing in March and April, Sri Lanka’s rupee came under pressure and the country is under Mercantilist import controls not seen even during a 30-year war when more classical economic knowledge prevailed.

Although total merchandise exports were down 16.4 percent from a year earlier in the six months to June, it was up 50.4 percent from May, the EDB said with some sectors seeing growth from last year in the month of June.

Coconut-based products were up 19 percent from a year earlier to 65 million US dollars, spices and essential oils were up 29 percent to 31 million US dollars ad fish and fisheries products were up 16 percent to 26 million US dollars.

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Natural Rubber, Industrial & surgical gloves, Coconut cream, Coconut Milk, Coconut Vinegar, Coconut Shell Charcoal, Pineapples, Arecanuts, Tamarind, Ginger, Essential oils, lemons, and Sweat Potatoes were up, the EDB said.

Exports from apparel were down 20 percent in June to 402 million US dollars, but was up 83 percent from 218 million US dollars in May

Exports of tea were down only 1.5 percent from a year earlier and was up 6.14 percent from May.

(Colombo/July18/2020-sb)