Image courtesy of Dailly Mirror.
Sri Lanka’s apparel trade has spent more than US$1 billion in foreign exchange to bring in intermediate goods up to May this year, compared with earnings of US$1.96 billion from exports.
The net earnings from these exports amount to less than US$1 billion.
Data from the Central Bank of Sri Lanka show that forex spending on imports of textiles and textile articles from January to May has increased by 9.4% from the year before to US$ 1.09 billion (US$ 999.9 million in January to May 2023).
In contrast, Sri Lanka’s crude oil import bill for January to May was US$ 438 million, while the total fuel bill (including refined petroleum and coal) was US$ 1.84 billion.
In that period, Sri Lanka’s total merchandise import bill was US$ 7.23 billion.
Forex spent on textile yarn, fabrics, and made-up articles alone has surged by 10.9% from the year before to US$ 1.07 billion (US$ 965 million in January to May 2023).
Textile and garments export earnings in May dropped by 5.5% year-on-year to a US$ 390.9 million.
January to May earnings fell by 3.4% to US$ 1.96 billion. Of this total, garments income fell by 2.5% to US$ 1.79 billion. Forex earnings from textiles exports shrank to US$ 117.5 million, an 18.7% slump.
The apparel trade export income dropped at a high double-digit rate in 2023 and the slide continues this year.
Excess supply, and the appreciation of the rupee versus the US dollar have not helped.
The rupee has climbed by 6% against the greenback up to June 28. It has appreciated against the euro (+9.7%) , the sterling pound (+6.8%), yuan (+8.6%), yen (+20.7%), Indian rupee (+6.4%), and the Australian dollar (+9.2%).
In the five months to May, export earnings from textile yarn, fabrics, and made-up articles, fell to US$ 155.9 million. This was a drop of 6.9% from the year before. In May alone, forex earnings from these items slumped by 18% to US$ 29.5 million.
As for manufactured items exports, apparel and clothing accessories earnings dropped to US$ 1.91 billion in January to May, from US$ 1.95 billion in the same period of 2023, according to data.
By Kapila Bandara /Sunday Times