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Sri Lanka in a paradoxical situation over its trade deficit despite higher exports

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Aviation Jet fuel being produced at the Ceypetco Refinery (file photo). The increase in industrial goods exports in April 2024 was mainly contributed by petroleum products due to the increase in volumes of bunkering and aviation fuel exports.

by Sanath Nanayakkare

Despite Sri Lanka’s exports had increased more than imports (y-o-y), reducing the trade deficit in April 2024, the cumulative trade deficit for Jan-Apr 2024 has widened, according to the External Sector Performance report of the Central Bank of Sri Lanka.

The deficit in the merchandise trade account narrowed to US dollars 558 million in April 2024 from US dollars 583 million recorded in April 2023. However, it widened compared to March 2024 (US dollars 359 million). Meanwhile, the cumulative deficit in the trade account during January to April 2024 widened to US dollars 1,777 million from US dollars 1,479 million recorded over the same period in 2023, according to the Central Bank.

“Earnings from merchandise exports increased by 3.4 per cent to US dollars 878 million in April 2024 compared to US dollars 849 million in April 2023. There was an increase in earnings across all major categories of exports, where industrial exports increased the most, despite a decline in garments exports. The increase in industrial goods exports in April 2024 was mainly contributed by petroleum products due to the increase in volumes of bunkering and aviation fuel exports.

Earnings from exports of agricultural goods improved in April 2024 mainly driven by coconut-related products and tea (led by higher volumes), despite a decline in spice exports. Earnings from mineral exports also increased in April 2024. However, earnings from exports declined in April 2024 compared to March 2024, resulted by broad-based declines due to festive seasonal effects”, the Central Bank report stated.

“This itself reflects the paradoxical nature of the domestic economy. One would expect more exports and fewer imports on a continued basis to improve the trade deficit of a country. But it doesn’t seem to be happening in Sri Lanka. The reason for this is; Sri Lanka’s export unit value is far below the import unit value, and this needs to be addressed by shifting to export products that create more value for the country in US dollar terms rather than gloating about our export volumes that still bring us insufficient foreign currency,” a leading gem exporter based in Ratnapura told The Island Financial Review.

“Yes, the expenditure of investment goods and fuel imports may have contributed to this increase in the trade deficit. But the issue is; how long Sri Lanka would take to be an export economy with foreign currency earnings that surpasses its import bill, or at least equate the import bill for self-sustenance. So, what we need to specifically target is; breakeven foreign exchange earnings to compensate for our import bill,” he said.



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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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