Export earnings near US$ 7bn mark

Sri Lanka’s export earnings are closing in on the US$ 7 billion mark, with total goods and services exports reaching US$ 6.933 billion in the first five months of 2025. This is up 7.14 percent from a year earlier, provisional customs data showed.

Accordingly, the export sector has achieved around 38 percent of the government’s US$ 18.2 billion target for the year.

Exports, both merchandise and services, in May expanded 6.35 percent year-on-year (YoY) to US$ 1.387 billion.

May merchandise exports grew 1.70 percent YoY to US$ 1.029 billion, bringing cumulative earnings for the first five months to US$ 5.344 billion, which is an increase of 5.46 percent compared to the same period in 2024.

Meanwhile, services exports continued to outperform, with May earnings estimated at US$ 358.14 million. 

From January to May, services brought in US$ 1.589 billion, up 13.20 percent YoY. According to the Export Development Board (EDB), the sector which includes ICT/BPM, construction, transport and financial services, remains a key driver of overall growth.

Within merchandise exports, tea earnings rose 14.58 percent YoY to US$ 131.81 million in May, driven by a 13.78 percent increase in volume and improved demand from Iraq, Libya, and Iran. Tea packets performed particularly well, posting a 14.61 percent gain over the same month last year.

Coconut-based exports surged 33.33 percent in May, led by kernel products such as coconut oil, milk powder and cream, which posted gains of 93.59 percent, 52.77 percent, and 47.26 percent, respectively. Fiber and shell products also saw double-digit growth, reflecting both strong global demand and increased local value addition.

Earnings from spices and essential oils rose 20.25 percent to US$ 30.64 million in May, due to stronger exports of cinnamon and cloves, which grew 67.65 percent and 37.00 percent, respectively. 

Food and beverage exports climbed 17.22 percent to US$ 49.49 million, with processed food leading the gains. Electrical and electronic components brought in US$ 38.02 million, up 23.12 percent from a year earlier, lifted by increased exports of transformers and switchboards. 

Gems and jewellery exports rose 5.53 percent to US$ 31.40 million, while logistics and transport services saw a sharp rise of 31.40 percent to US$ 206.14 million in May.

However, apparel and textile exports, Sri Lanka’s top merchandise category, edged down 0.38 percent to US$ 388.81 million in May. 

Exporters are closely watching the outcome of a reciprocal tariff regime announced by US President Donald Trump in April, which could see duties of up to 44 percent on Sri Lankan apparel. The proposed tariffs, currently under negotiation, could pose fresh challenges for a sector.

Rubber products too declined 9.33 percent to US$ 73.60 million in May, weighed down by a 40.91 percent drop in sheet rubber exports. 

Seafood exports were down 22.11 percent to US$ 13.56 million, mainly due to a sharp fall in shipments of fresh or chilled fish. Ornamental fish exports also contracted significantly, dropping 57.43 percent to US$ 0.86 million.

In terms of market performance, the United States remained Sri Lanka’s largest export destination, accounting for 23 percent of merchandise exports. However, shipments to the US contracted 2.67 percent YoY to US$ 216.67 million in May. Exports to the US during January to May grew 5.82 percent to US$ 1.183 billion.

Exports to the United Kingdom fell 5.77 percent in May to US$ 68.37 million, while cumulative exports grew 3.85 percent to US$ 392.29 million.

India continued to gain ground as exports to the neighbouring giant expanded 4.03 percent to US$ 75.33 million, with a sharp 31.41 percent increase over the five-month period to US$ 409.74 million. 

Other key markets showing positive trends included Germany, the Netherlands, France and China, all recording year-on-year growth in May as well as for the year to date.