Sri Lanka will be embarking on a greater product and market diversification programme to increase the country’s exports in the new near normalcy situation following the COVID-19 crisis, Export Development Board (EDB) Chairman Prabhash Subasinghe said. EDB Chairman has renewed his call for export diversification to enhance Sri Lanka’s foreign exchange earnings amidst COVID-19 challenges.
He stressed the need to focus on export products and market diversification which is seriously lacking today.
Whilst appreciating that the US and the EU are the largest markets, the country needs to now create a significant export market in Asia including China.
"The China FTA will certainly help in this regard. Export product diversification must simultaneously happen so that we can create more billion-dollar industries for Sri Lanka," he added.
Exports in August were US$ 947.7 million, down by 19% from a year earlier.
EDB said despite the decline in exports, some products, like coconut-based products, electronics and electronic components, spices and essential oils, and food and beverages, recorded a positive growth of 22.88%, 8.32%, 19.4%, and 11.45%, respectively, in August as against a year earlier.
Export earnings for January to August were US$ 6.4 billion down by 19% from US$ 7.9 billion in the corresponding period of last year. EDB however, said it was an improved performance, compared with the decline of 21.08% recorded in January to July.
"However, EDB is being watchful of the months ahead whilst understanding the impact of COVID-19 on our key markets of US and Europe,” Subasinghe said.
Export earnings from apparels and textiles declined by 11.99 % to US$ 438.34 million during the month of August, compared with US$ 498.03 million recorded in August 2019. In apparels, there was a 6.15% decline recorded in August in comparison to July.
Despite the decline in the sector, earnings from exports of made-up textiles increased by two-hundred-fold in August 2020 in comparison to August 2019.
In addition, export earnings from rubber and rubber-finished products have decreased by 2.71 % Year-on-Year (Y-o-Y) to US$ 72.53 million in August, due to bearish performance in exports of pneumatic and retreated rubber tyres and tubes, gaskets, washers, seals etc., of hard rubber.
However, exports of industrial and surgical gloves of rubber have increased by 36.19% Y-o-Y to US$ 23.07 million in August.
Export earnings from tea in August, which made up 12% of the merchandise exports declined by 13.27% Y-o-Y to US$ 102.97 million and the export volume also declined by 16.01% in August 2020, compared to August 2019. The decline was mainly due to lower demand for tea from Iran and Iraq.