Tea earnings drop by $10.6mn in April

Colombo (News1st) - According to the report on external sector performance for the month of April, released by the Central Bank of Sri Lanka (CBSL), the tea industry has suffered a significant hit. The report notes that earnings from agricultural exports declined, on a year-on-year basis, in April 2019 due to poor performance in earnings from tea, spices and minor agricultural product exports. Earnings from agricultural exports fell by $13.3 mn from $190.3mn in April 2018 to $177.0mn in April 2019. The drop in export earnings from Tea accounts for nearly 80% of this value, tea export earnings fell from $109.6mn in April 2018 to $99.0mn in April 2019. However, the Central Bank notes that the external sector remained relatively stable in April 2019 supported by a contracting trade deficit. According to Central bank figures, the deficit in the trade account narrowed to US dollars 797 million from US dollars 999 million in April 2018. The CBSL notes that the reduction in the trade deficit was due to the decline in import expenditure by 11% (year-on-year) and a marginal increase in export earnings by 0.4% (year-on-year). The CBSL report also notes that earnings from tourism in April recorded a decline of 7.5%. The Government's policy of making it tougher for the general public to buy vehicles, which was introduced during the second half of 2018, seems to be working as import expenditure on consumer goods declined significantly in April 2019, mainly due to lower imports of non-food consumer goods, particularly personal motor vehicles. The report notes that import expenditure on personal motor vehicles has continued to decrease since December last year. The country’s gross official reserves stand at $7.2 billion, which was equivalent to 4.1 months of imports at end April 2019.