Third highest monthly export value in October

The Central Bank last week issued external sector performance statistics for October and said that export earnings of the country increased by 27.6 per cent, year-on-year, to $ 802 million in October.

This is the third highest monthly export value ever recorded. Higher export earnings from textiles, garments and minor agricultural crops helped. Cumulative earnings from exports during the first ten months of 2010 increased by 13.2 per cent, year-on-year, to $ 6,505 million. Expenditure on imports increased by 8.4 per cent to $ 1,131 million in October, mainly due to substantial increases in imports of non food consumer goods. Cumulative expenditure on imports during the first ten months of 2010 increased by 32.8 per cent, year-on-year, to $ 10,863 million. As a result, the trade deficit expanded to $ 4,357 million during this period compared to $ 2,431 million in the corresponding period of 2009, the CB said.

The largest contribution to the growth in exports in October, was from the industrial sector, led by significant increases in earnings from textile and garments, rubber products and machinery and equipment. Earnings from garment exports to the EU and USA increased by 27.4 per cent and 33.1 per cent.

Although earnings from diamonds and jewellery exports declined by 10.0 per cent, growth in earnings from all other sub categories of industrial exports exceeded 26 per cent in October. Earnings from agricultural exports, which have taken on an increasing trend since April, improved further in October, mainly reflecting higher prices. The average export prices of tea and rubber continued to remain high at US dollars 4.43 per kg and $3.81 per kg, respectively, in October 2010. Earnings from minor agricultural exports increased by 35.9 per cent to $ 34 million in October, led by higher earnings from cinnamon and pepper.

Expenditure on imports of consumer goods rose in October, due to higher imports of non-food consumer goods, led by motor vehicles. Expenditure on food imports also increased mainly due to higher prices of sugar imports and increased import volumes of milk products. However, expenditure on wheat and rice imports declined, in terms of both prices and volumes, compared to October 2009.

Expenditure on imports of intermediate goods decreased as the expenditure on both, petroleum and fertilizer imports, declined by more than 50 per cent due to lower volumes of imports. The average import price of crude oil increased by 11.3 per cent to $ 80.99 per barrel in October, from US dollars 72.80 per barrel in October 2009. Textile and clothing imports, grew by 50.9 per cent, year-on-year, reflecting higher potential earnings from exports of apparel products in the coming months. All sub categories of investment goods imports, except transport equipment, increased in October.

During the first ten months of 2010, workers’ remittances increased by 21.9 per cent to US dollars 3,380 million (after adjusting for revisions by commercial banks) over that of the corresponding period of 2009. The gross official reserves continued to remain significantly above the targeted level and stood at $ 6.6 billion by end November without Asian Clearing Union (ACU) funds. Based on the previous 12 months average expenditure on imports of US dollars 1,084 million per month, the gross official reserves, without ACU funds, were equivalent to 6.1 months of imports.