February export performance shows marginal YoY growth

• Merchandise export earnings total US$ 983.7 mn in February
• US$ 1 million earnings mark missed for second consecutive month
• Exports to USA, UK, and EU expand, while India shows contraction

Sri Lanka’s merchandise exports in February increased marginally by 0.17 percent Year-on-Year (YoY) and 1.3 percent from the previous month to US$ 983.7 million.
Accordingly, cumulative merchandise exports during the period of January to February 2024 decreased by 0.30 percent YoY to US$ 1,954.39 million. 

Although an improvement, merchandise export failed to cross US$ 1 billion in terms of monthly earnings for the year so far. The last time merchandise exports reached the US$ 1 billion earnings mark was in December 2023.
Data released by Sri Lanka Customs showed that compared to February 2023, agricultural exports shows significant increase of 11.82 percent, reaching US$ 255.76 million in February 2024. However, industrial exports experienced a decline of 3.36 percent during the same period, dropping to US$ 727.94 million.

Contributing positively to export earnings this month was tea, rubber, and coconut based products, among others. 
Export earnings from tea which made up 12 percent of merchandise exports, increased by 22.16 percent y-o-y to US$ 127.74 million in February 2024. This increase is mainly due to the strong performance in the export of Bulk Tea and Tea packets, increased by 52.31 percent and 2.56 percent respectively.

Rubber and Rubber Finished products exports increased by 15.87 percent y-o-y to US$ 88.73 million in February 2024, with the strong performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes (17.16 percent). 
On a monthly analysis, export earnings of Coconut based products increased by 25.17 percent YoY. Moreover, export earnings of Coconut kernel products, Coconut fiber products and Coconut shell products increased by 20.27 percent, 44.28 percent and 13.55 percent respectively in February 2024 compared to February 2023.
Meanwhile, export earnings from Seafood increased by 3.5 percent YoY to US$ 20.69 million, mainly due to the strong performance in export of Fresh fish (3.36 percent) and Shrimps (47.26 percent), whereas  earnings from Food & Beverages expanded by 36.77 percent y-o-y to US$ 43.0 million, with positive performance in exports of Processed food (31.88 percent).

It is noteworthy that total export earnings from Diamonds, Gems & Jewellery increased by 66.56 percent y-o-y to US$ 37.61 million in February 2024. Except Jewellery (-49.14 percent), export earnings from Diamonds and Gems experienced substantial increases, by 110.66 percent and 40.55 percent respectively in February 2024.
The negative contributors to February’s export performance are apparel, spices, ornamental fish, electrical and electronics appliances, and boat building.
Export earnings from Apparel & Textile decreased marginally by 2.06 percent y-o-y to US$ 421.31 million in February 2024.

Similarly, export earnings from Spices and Essential Oils decreased by 33.32 percent to US$ 22.99 million, mainly due to the poor performance in export of Cloves (-85.82 percent). Clove exports to India decreased by nearly 100 percent in February 2024 compared to February 2023.
Additionally, export earnings from Electrical & Electronics Components decreased by 18.25 percent y-o-y to US$ 35.16 million with poor performance in exports of Insulated Wires and Cables (-2.1 percent), Electrical Transformers (-34.47 percent) and Other Electrical & Electronic products (-31.11 percent).

In terms of export markets, United States of America, Sri Lanka’s single largest export destination, which absorbs  23 percent of Sri Lanka’s merchandise exports, increased by 8.02 percent to US$ 249.6 million in February.
Exports to the United Kingdom increased by 20.49 percent YoY to US$ 82.93 million, while exports to India dropped by 20.56 percent YoY to US$ 50.71 million.
The negative export performance to India was driven by lower export of Animal feed (12.92 percent).
Exports to the European Union (EU), which accounts for 24 percent of Sri Lanka’s exports increased by 5.64 percent.