Agricultural exports which grew by 32 per cent boosted Sri Lanka’s export earnings, which registered a 16 percent increase in August 2008, a Central bank report confirmed.

This significant increase was brought about by the high prices received by Ceylon Tea and natural rubber in the international market. The US $4.26 per kilogram for tea was a 29 percent increase since the beginning of this year while the US $3.02 kilogram for rubber marked a 31 percent increase since January 2008, the report added.

In addition the revenue of US $208 million for minor agricultural crops also provided recognition as an important sector of export earnings of the country.

Exports of apparel, rubber based products, petroleum, diamonds and jewellery contributed to a 16 percent increase in industrial products, while food, beverages and tobacco products continued to declare.

The total cumulative value of exports in the first eight months amounted to US $5498 million, a growth of 12.7 percent over the corresponding period, last year.

However expenditure on imports grew by 35 percent to US $1262 million. This was caused by petroleum imports, fertilizer and chemical imports, mainly due to peak prices in early July which however have continued to be on a declining trend thereafter.

Imports of consumer goods increased by 19 percent in August, while rice and sugar also increased. Wheat and flour imports however declined.

Motor vehicles which registered an average growth of 34 percent upto August 2008, grew by a meagre five percent due to the withdrawal of duty free permits to public servants.

Cumulative expenditure on imports during the period amounted to US $9529 million an increase of 35 percent over the corresponding period in 2007.

These developments caused a widening of the trade deficit to 76 percent amounting to US $501 million. The deficit in the trade balance expanded to US $4031 million in comparison to US $2166 million during the corresponding period last year.

However private remittances and higher capital and financial flows, off set the deficit, and recorded a surplus of US $390 million as at the end of August 2008, thereby increasing the gross official reserves to US $3424 million, up from US $3062.5 million in December 2007, the report concluded.