December exports reach US $ 863m, growth of 22.7%

Exports in December 2007 reached the highest ever monthly value of US $ 863 million, recording a significant growth of 22.7 per cent, year-on-year, the Central Bank said.

Industrial exports, with a share of 78 per cent in total exports, made the largest contribution to this growth, with most sub-categories including textiles and garments; food, beverages and tobacco; machinery and equipment; rubber products; and diamonds and jewellery, recording notable increases.

While industrial exports increased by 15.7 per cent, its largest sub-category, garments and textiles, also increased by around 15 per cent.

Agricultural exports, with a share of 17 per cent in total exports, also made a significant contribution, with tea exports further increasing along with continued increases in the average price fetched by Sri Lankan tea in international markets.

Export earnings from tea recorded a landmark achievement of exceeding US $ 1 billion in 2007, having increased by nearly 42 per cent, year-on-year, in December 2007. Rubber exports benefited as a result of both a higher volume of exports and a higher average price in December.

These increases could be attributed to the rising international prices of natural rubber along with the increase in the price of synthetic rubber following the increase in petroleum prices.

Continuing the upward trend witnessed in recent months, export earnings from other agricultural products too increased further in December 2007, driven primarily by cloves, cinnamon and pepper.

With the export performance in December, cumulative exports during the year 2007, which amounted to US dollars 7,740 million, registered a growth of 12.5 per cent, year-on-year, as compared to the increase of 8.4 per cent in 2006, the Bank said.

The expenditure on imports increased by 33.6 per cent, year-on-year, to US dollars 1,159 million in December 2007, with the expenditure on petroleum products contributing 60 per cent to that increase, largely as a result of international petroleum prices increasing to unprecedented levels during the last part of 2007.

Investment goods imports also contributed largely to the increase in expenditure on imports in December 2007, which augurs well for future economic activity.