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Decline in exports; lower global demand

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External Sector Performance – November 2022

The merchandise trade deficit continued to remain low compared to a year ago, though it widened in November 2022 over the previous month. Earnings from merchandise exports declined in November 2022, mainly due to lower global demand, particularly for garment exports. Meanwhile, merchandise import expenditure also declined for the ninth consecutive month in November 2022 on year-on-year basis, despite recording an increase, compared to October 2022. Workers’ remittances continued to recover and recorded a notable increase in November 2022 over a year earlier and the previous month.

Earnings from tourism increased in November 2022 over the previous month supported by a growth of tourist arrivals over 40 per cent. Foreign investment in the government securities market recorded a marginal net inflow during November 2022, while the Colombo Stock Exchange (CSE) recorded a marginal net outflow during November 2022. The Central Bank continued to provide foreign exchange to the domestic foreign exchange market to part finance essential imports. Consequently, the build-up of gross official reserves remained constrained. Meanwhile, the weighted average spot exchange rate in the interbank market remained around Rs. 363 per US dollar during the month.

Merchandise Trade Balance
and Terms of Trade

Trade Balance: The deficit in the merchandise trade account narrowed to US dollars 450 million in November 2022, compared to the deficit of US dollars 553 million recorded in November 2021. However, the merchandise trade deficit has shown a tendency to widen on month-on-month basis since recording a surplus in June 2022. The cumulative deficit in the trade account during January-November 2022 recorded at US dollars 4,839 million, a decline from US dollars 7,054 million recorded over the same period in 2021. The major contributory factors for the decline in the cumulative trade deficit are shown in Figure 1.

Terms of Trade: Terms of trade, i.e., the ratio of the price of exports to the price of imports, deteriorated by 5.3 per cent in November 2022, compared to November 2021, as the increase in import prices surpassed the increase in export prices.

Performance of Merchandise
Exports

Overall exports: Earnings from merchandise exports declined by 17.9 per cent in November 2022, over November 2021, to US dollars 994 million, recording a slight decline for the third consecutive month, on a month-on-month basis. While declines in earnings were observed across all main categories, industrial exports mainly contributed to the contraction in earnings. However, cumulative export earnings during January-November 2022 increased by 6.0 per cent over the same period in the last year to US dollars 12,026 million, which was mainly driven by a 9.4 per cent improvement in industrial exports amidst a decline in agricultural and mineral exports.

Industrial exports: Earnings from the export of industrial goods declined in November 2022 by 15.4 per cent, compared to November 2021. This decline was due to a broad-based decline in earnings from most of the industrial products led mainly by garments and rubber products. Earnings from export of garments declined by 8.3 per cent (y-o-y) driven by lower global demand for garment exports. Accordingly, exports of garments to most of the major markets (the USA, the EU and the UK) recorded declines. The decline in earnings from rubber products was due to the lower exports of tires and household gloves. Further, a sizable decline was recorded in the exports of petroleum products (led by lower export volumes); animal fodder (mainly, wheat residues); and food, beverages, and tobacco (mainly, vegetable, fruit, and nuts preparations), although earnings from gems, diamonds, and jewellery; and machinery and mechanical appliances (mainly, electronic equipment) increased. Earnings from exports of petroleum products recorded a decline of 30.7 per cent in November 2022 (y-o-y), due to lower volumes of bunker and aviation fuel supplied despite a notable increase in average export prices.

Agricultural exports: Earnings from the export of agricultural goods declined by 25.9 per cent in November 2022 compared to November 2021, due to a broad-based decline in all subcategories of agricultural goods led by spices and coconut related products. Export earnings from spices declined due to the lower earnings from all subcategories, whereas earnings from pepper declined the most, driven by lower export volumes. Both kernel and non-kernel coconut related products contributed to the decline in earnings from coconut related products. The drop in export earnings from tea was mainly due to lower export volumes (a decline of 25.5 per cent), despite high average export prices which recorded an increase of 20.5 per cent, (y-o-y). (CBSL)



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From Mt. Fuji to Sri Pada: Lessons from a father-son climb

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by SK Samaranayake

For Daham Gunasena, reaching the summit of Mt. Fuji with his 12-year-old son was not the end of the journey but the beginning of a different kind of lesson.

Gunasena, Director – Commercial at SPAR Sri Lanka and a senior business leader, academic and Chartered Accountant, spent nearly 12 hours on August 19 climbing Japan’s highest mountain with his son, Methum. After eight hours of climbing, the pair reached the 3,776-metre summit before beginning a demanding four-hour descent to Fujinomiya 5th Station.

“The summit was only halfway,” Gunasena reflected, describing the experience as a lesson in preparation, perseverance and responsibility.

Their journey began two days earlier with a trial excursion to the 6th Station and the volcanic landscape around Mt. Hoei. The experience allowed Gunasena to assess the altitude, terrain, weather and equipment before deciding whether his son was ready for the summit attempt.

The climb itself reinforced the value of taking one step at a time. Rather than focusing on the distant summit, father and son concentrated on the next marker, the next few steps and short periods of rest.

Reaching the summit brought another lesson. After taking photographs and celebrating, they still had four hours of descent ahead of them over loose volcanic terrain.

“Reaching the top was an achievement. Returning safely was success,” Gunasena said.

The experience also prompted him to reflect on how Japan manages Mt. Fuji, including visitor education, digital information, sanitation, transport, safety and environmental protection.

Having climbed Sri Pada 12 times last year and five times so far this year, Gunasena sees opportunities to apply some of these principles in Sri Lanka without compromising the mountain’s unique pilgrimage traditions.

He suggested a comprehensive digital platform for Sri Pada providing information on weather, congestion, transport, sanitation, first aid and emergencies, while educating foreign visitors about its religious significance.

For Gunasena, however, the most enduring lesson was personal: a mountain can teach what lectures cannot—through preparation, perseverance, respect for nature and the shared experience of taking each step together.

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FLIR, Marlbo promote smarter industrial maintenance

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Sri Lankan industries are being encouraged to adopt advanced condition monitoring technologies to detect equipment problems before they develop into costly failures, as global technology company FLIR and its local partner Marlbo Trading Company strengthen their collaboration.

The companies brought together industry professionals at a technical seminar held on August 20 at Taj Samudra, Colombo, focusing on the use of thermography and acoustic imaging to reduce unplanned downtime, improve energy efficiency and lower maintenance costs.

Organised by Marlbo under the theme “Condition Monitoring Using Thermography and Acoustic Imaging for Measurable ROI,” the seminar highlighted the growing importance of proactive and predictive maintenance in improving equipment reliability and operational efficiency.

FLIR Sales Director – Instrumentation, India, Bhaskar Lala, and APAC Condition Monitoring Specialist David Gambarte shared their expertise on the latest diagnostic technologies and their practical industrial applications.

Thermal imaging can identify abnormal heat patterns linked to electrical and mechanical faults, while acoustic imaging can detect problems that may go unnoticed during routine inspections.

The technology is particularly useful in identifying compressed-air leaks, which can cause significant energy losses and increase operating costs.

Shevon Liyanage, Engineer – Measuring Instruments at Marlbo, also shared insights into applying condition monitoring technologies in the Sri Lankan industrial environment.

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Lumbini Tea Valley wins intl award for Singharaja Wirytips

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Chaminda Jayawardana receiving the award

Lumbini Tea Valley Ceylon won an award for its Singharaja Wirytips at The Leafies: International Tea Awards held in London in 2024, marking another international recognition for the Sri Lankan tea producer.

The award comes as the company marks two decades of direct exports, with its premium and organic Ceylon teas now reaching 35 countries across six continents.

Established in 1984, Lumbini Tea Valley began its direct export drive after Chaminda Jayawardana joined the family business in 2000 alongside his father, Dayapala Jayawardana. The initiative materialised in 2006 with the company’s first direct shipment—a 15-kilogram consignment of Flowery Broken Orange Pekoe (FBOP) tea to the United States.

Since then, the company has expanded its direct-export operations, which now account for around 20% of its total manufacturing output. Following its transition to organic production, approximately half of its organic tea output is exported directly by the company.

Its key export markets include Japan, the United States, France, the Netherlands, Switzerland and Australia, with direct shipments now reaching 35 countries.

The company said its direct-export model would continue to expand amid growing international demand for traceable, single-origin Ceylon tea, with premium and organic grades at the centre of its export strategy.

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