Freight Forwarding: November and December Sales Tips: Sri Lanka Import & Export market

 

In 2024, Sri Lanka’s import-export market is projected to reflect the country’s economic recovery and adjustments in trade policies. Export earnings are expected to grow modestly as global demand recovers and efforts to enhance export competitiveness continue. Sectors like tea, spices, gems, and IT services are expected to perform well. However, the overall export growth could be tempered by external factors, including geopolitical uncertainties and fluctuating global demand. Imports are projected to rise significantly, driven by improved domestic economic activity and the relaxation of import restrictions. Essential goods, investment-related products, and consumer goods are likely to dominate import categories.

Import expenditure may grow faster than exports, widening the trade deficit in the short term, The trade deficit widened in 2024, peaking at $634 million in September, primarily due to higher import growth outpacing export increases. However, the government continues to implement measures to boost export competitiveness.

Performance of Merchandise Import & Exports in November and December.

Industrial Exports: Earnings from the exports of industrial goods declined in November 2023, with a significant share of the decline being contributed by garments. Accordingly, exports of garments to most of the major markets (the USA, the EU, and the UK) recorded declines. However, earnings from garment exports improved notably in November 2023, compared to October 2023. Further, declines were recorded in the exports of animal fodder (mainly, poultry feed and wheat residues); machinery and mechanical appliances (mainly, electronic equipment); and base metals and articles (mainly, iron and steel and articles). However, earnings from petroleum products (due to the increase in volumes of bunker and aviation fuel exports); food, beverages and tobacco (primarily, vegetable, fruit and nuts preparations); rubber products (primarily, tires); and transport equipment (primarily, a cruise ship) increased in November 2024.

Agricultural Exports: Earnings from the exports of agricultural goods improved in November 2023, compared to a year ago, led by tea (mainly, instant tea) exports. An increase of earnings from overall tea exports resulted from the higher export volumes although the unit price of tea exportsin November 2023 was lower than a year earlier. Further, export earnings from coconut related products (mainly, fibres and coconut oil) and spices (mainly, cinnamon) increased due to higher export volumes. Meanwhile, there was a decline in export earnings from minor agricultural products (primarily, areca nuts), natural rubber, and vegetables.

Mineral Exports: Earnings from mineral exports increased substantially in November 2023, compared to November 2022, mainly due to higher exports of zirconium ores.

 

Performance of Merchandise Imports November and December

Consumer Goods: Expenditure on the importation of consumer goods increased in November 2023, compared to a year ago, mainly due to the increase in expenditure on non-food consumer goods. The increase in expenditure on non-food consumer goods was broad-based, with a notable increase in imports of medical and pharmaceuticals (primarily, medicaments), telecommunication devices (primarily, mobile phones), home appliances (primarily, televisions), and household and furniture items. Meanwhile, expenditure on food and beverages imports improved marginally, with an increase in import expenditure on most of the categories of food and beverages being offset by a significant decline in import expenditure on cereals and milling industry products (base effect resulted due to higher imports of wheat flour in November 2022)..

 

Intermediate Goods: Expenditure on the importation of intermediate goods declined in November 2023, compared to a year ago, mainly driven by lower fuel imports. Expenditure on fuel declined in November 2023 due to lower import prices as well as lower import volumes of refined petroleum and coal driven by the availability of sufficient stocks. However, import prices of crude oil increased marginally in November 2023, compared to November 2022. Meanwhile, the importation of wheat grain; textiles and textile articles (mainly, fabrics); fertilizer (mainly, urea); and agricultural inputs recorded notable declines, among others, in November 2023, compared to November 2022. In contrast, import expenditure on base metals (mainly, iron and steel), paper and paperboard and articles thereof, diamonds and precious stones and metals, and mineral products increased.

 

Investment Goods: Import expenditure on investment goods increased in November 2023, compared to November 2022, led by the increase in imports of machinery and equipment (primarily, electric motors and generating sets). Import expenditure on building material also increased, mainly owing to high imports of articl es of iron and steel (primarily, bridges and bridge sections), ceramic products (primarily, wall tiles), and cement, while expenditure on importation of transport equipment increased mainly due to high imports of agricultural tractors.

Sri Lanka's import and export market in 2024 continues to navigate the challenges of economic recovery while capitalizing on its core industries. The country's export sector remains anchored by key products like textiles and apparel, tea, spices, rubber products, and gems and jewelry. These sectors collectively drive a significant portion of foreign exchange earnings, with the U.S., European Union, and India as major trading partners. Emerging opportunities include IT services, wellness tourism, and eco-friendly products.

On the import side, Sri Lanka relies heavily on petroleum, machinery, food, and pharmaceuticals. Efforts to diversify import sources are underway as the government implements policy measures to stabilize the economy and optimize foreign reserves. Import costs remain influenced by global price fluctuations and domestic currency valuation. 

Economic reforms, including debt restructuring and revised trade agreements, aim to enhance market competitiveness and streamline trade processes. The Export Development Board (EDB) also focuses on promoting niche markets like organic products and high-value crops to expand export capabilities.