Export earnings will surpass $ 10 b by year end- Chairman EDB

By Lalin FERNANDOPULLE

Export earnings for the first quarter this year has been impressive and we are confident that revenue from the sector would surpass US$ 10 billion by the end of the year, said Chairman Export Development Board (EDB), Janaka Ratnayake.

He said that considering the remarkable growth momentum of the sector, export earnings will top US$ 15 billion by 2015 and reach the target of US$ 20 billion by 2020 as envisioned by the government. “International exhibitions and trade fairs, assistance to SME entrepreneurs and export incentives have helped the country to achieve this feat in the export sector”, Ratnayake said.

Earnings from exports and expenditure on imports have grown significantly on a year-on-year basis in March this year according to the Central Bank.

According to the Bank, export revenue in March 2011 rose by 59.5 percent on a year-on- year basis to US$ 1,057 million reflecting growth in all major sectors of exports. Ratnayake said this is the first time that monthly export earnings topped US$ 1 billion and added that it is a landmark achievement to the sector.

During the first quarter 2011 cumulative earnings from exports and expenditure on imports have increased by 54.3 percent to US$ 2,721 million and 39.9 percent to US$ 4.458 million, the Bank said.

Ratnayake said the EDB has embarked on a massive marketing campaign to promote Lankan products to niche markets this year. The Expo Bazaar was a huge success attracting a large number of manufacturers and buyers under one roof.

“We have launched Expo 2012 to attract new buyers to the country and showcase Lankan products to the international market”, he said.

The EDB aims at building the export chain enabling small scale exporters to reach the next level of exports and then become major exporters in the country.

He said export earnings reached US$ 2,659 million for the first quarter of 2011 denoting a growth rate of 54.1 percent over the corresponding period of 2010.

Ratnayake said recovery in domestic demand, attractive international prices and a better investment climate contributed to the export growth.

Exports to Europe reached US$ 1 billion from January to March this year recording a growth rate of 75.5 percent compared to the corresponding period last year.

Exports to USA in the first quarter recorded US$ 571 million registering a growth rate of 54.4 over the corresponding period in 2010.

The EU and USA are Sri Lanka’s largest export markets for textiles and garments. Exports of garments to USA and EU during the first quarter reached US$ 439 million and US$ 635 million denoting a growth of 52.3 percent and 89.8 percent.

Exports to the region reached US$ 378 million in March this year denoting a 81.7 percent growth compared to the corresponding month in 2010.

Agricultural exports which contributed nearly 32 percent to the overall export earnings increased by 25 percent in the first quarter this year.

Earnings from tea in terms of value and volume rose by 21 percent and 10 percent. Revenue from rubber and coconut products increased by 30 percent and 52 percent during the same period.

Earnings from the fisheries sector rose by 47 percent due to increased exports of aquarium fish and edible fish products during the period under review.

Despite adverse global market conditions export income recorded a 17.3 percent growth last year. Export income dropped by 12 percent in 2009 due to the intensity of the global financial crisis.

Ratnayake said the growth momentum in the export sector is spurred by the shift from Western markets to emerging markets in Asia which accounts for over 50 percent of the global population.

Ratnayake said that Sri Lanka should focus on emerging markets in Asia and be less dependant on the West which has not yet fully recovered from the global financial crisis.

Economists believe that Asia would be the next powerhouse of the global economy due to vast economic growth in the region. China became the second largest economy in the world overtaking Japan the former industrial giant in the region.

The Asian Development Bank said that Developing Asia must change its export model and focus on new engines of growth to sustain the robust economic expansion it has enjoyed in the past.