Trade deficit falls 2.1%

K.Haputantri · 1 Trade deficit falls 2.1% Sat Dec 29, 2012 7:56 am

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Trade deficit falls 2.1%
December 28, 2012, 8:05 pm
The Island

The trade deficit contracted by 2.1 percent year-on-year to US$ 8,582.9 million during the period January to November 2012, the Central Bank announced on Friday (28).

Cumulative export earnings during this period fell 6.6 percent to US$ 8,991.4 million while import expenditure fell 4.5 percent to US$ 17,574.3 million.

Tea export earnings fell 6.2 percent to US$ 1,273.6 million while apparels fell 4.6 percent to US$ 3,633.3 million.

The petroleum bill grew 8.5 percent year-on-year to US$ 4,672.5 million during the eleven month period.

D.G.Dayaratne · 2 Re: Trade deficit falls 2.1% Sat Dec 29, 2012 12:32 pm

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Govt should give priority for EXPORTS

1977 trade Minister said "EXPORT OR PERISH"

Present Minister give priority for WHAT?

Arena · 3 Re: Trade deficit falls 2.1% Sat Dec 29, 2012 12:52 pm

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Exports are duty free........
No Vat................
If goes with a BOI - tax release.

Other than giving subsidies all other available relaxations are already made.
It is matter for us to start exporting......

Really what are the other relaxations we can made to the system. I dont have any clue. ( Even Japan goes with a BOP deficit.trade deficit? ....)

D.G.Dayaratne · 4 Re: Trade deficit falls 2.1% Sat Dec 29, 2012 4:49 pm

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Only tax incentives not sufficient

No Export Drive or genuine Effort

Why we can't export

chamith · 5 Re: Trade deficit falls 2.1% Sat Dec 29, 2012 9:55 pm

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its sad to see that exports falling even with the rupee depreciation.
If not for the rupee depreciation the exports would have fallen much more.

Jiggysaurus · 6 Re: Trade deficit falls 2.1% Sun Dec 30, 2012 12:29 am

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chamith wrote:its sad to see that exports falling even with the rupee depreciation.
If not for the rupee depreciation the exports would have fallen much more.

Isn't the article clear enough? The numbers are given in Dollar terms.

Jiggysaurus · 7 Re: Trade deficit falls 2.1% Sun Dec 30, 2012 12:54 am

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D.G.Dayaratne wrote:

Why we can't export

Maybe because the Dayaratnes are wasting time on forums instead of innovating or producing exportable goods.

chamith · 8 Re: Trade deficit falls 2.1% Sun Dec 30, 2012 5:53 am

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Jiggysaurus wrote:

chamith wrote:its sad to see that exports falling even with the rupee depreciation.
If not for the rupee depreciation the exports would have fallen much more.

Isn't the article clear enough? The numbers are given in Dollar terms.

The main expectation of a home currency depreciation is to encourage exports and discourage imports. Is that what we see here ?

K.Haputantri · 9 Re: Trade deficit falls 2.1% Sun Dec 30, 2012 8:35 am

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chamith wrote:

Jiggysaurus wrote:

chamith wrote:its sad to see that exports falling even with the rupee depreciation.
If not for the rupee depreciation the exports would have fallen much more.

Isn't the article clear enough? The numbers are given in Dollar terms.

The main expectation of a home currency depreciation is to encourage exports and discourage imports. Is that what we see here ?

I think that, what ever CB & Treasury interventions and policy tools work in tandem with other basic requirements under "ease of doing business" which covers a large area such as relaxation of controles, de-politicitation of govt., entities, minimising corruption etc., and also availability of business opportunities without restrictions. Mere policy tools canot tackle those basic requirements. Its a total clensing exercise of the rotten system.

D.G.Dayaratne · 10 Re: Trade deficit falls 2.1% Sun Dec 30, 2012 9:13 am

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Yes this a problem of total system

Govt should make genuine effort to brake the vicious cycle

Slstock · 11 Re: Trade deficit falls 2.1% Sun Dec 30, 2012 9:34 am

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Jiggysaurus,

I appreciate some good contributions you make. I also enjoy a bit of sarcasm directed in the right way. But kindly becareful to respect people while you make comments. Looking at Mr Dayaratnes seniority ( I presume he stated correct info here) , he has earned the right to make constructive opinions here after doing what he could to the
country.

Revisiting what you said, am not sure how many politicans physically get involved in anything . We know they waste time making speech after speech and does best by giving directives to others. This forum can give intellectual/contructive views for the development of the country. We do not have to have politcal agendas to support anyone blindly.

There was a lot said to improve exports this year. The reasons for fall needs to be revisted to rectify . Other than natural causes and Europe crisis, if the obstacles are policies and mandates they need to be revisited if the people responsible truly care.

Jiggysaurus wrote:

D.G.Dayaratne wrote:

Why we can't export

Maybe because the Dayaratnes are wasting time on forums instead of innovating or producing exportable goods.

Whitebull · 12 Re: Trade deficit falls 2.1% Sun Dec 30, 2012 11:56 am

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chamith wrote:its sad to see that exports falling even with the rupee depreciation.
If not for the rupee depreciation the exports would have fallen much more.

Yes you are correct but some say this as,
අතීසාරයට අමුඩෙ ගහනව වගේ කියලා
(It hides the symptoms for someperiod but does not treat the illness.)

D.G.Dayaratne · 13 Re: Trade deficit falls 2.1% Sun Dec 30, 2012 4:23 pm

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Actually speaking Dayaranes(not only Myself) are not given a chance to contribute

That is also a problem of present system

You all know how people are appointed to manage institutions

Arena · 14 Re: Trade deficit falls 2.1% Sun Dec 30, 2012 6:35 pm

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i will tel you these calculation again..............
Sri lankan tea companies gives the total depreciation advantage to foreign buyer.

Eg.
If the tea selling price is 110...................previous price ( 110/110) US$ 1........... current price ( 110/130) US$ .84................

So there is a drop in Tea export revenue for sure. it si a 16% clear drop. But we get the long term advantage over other countries since they cant reduce the prices like we did.

I know how srilanakan largest tea exporter do their costings. But i hv no clue on Dhilmha. Any way it is negligible since they are exporting around 7m Kgs where out total export is around 300m+ Kgs.

I know this will never understood by Dr, Harsha........... No point of telling him..............

chamith · 15 Re: Trade deficit falls 2.1% Mon Dec 31, 2012 9:21 am

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Arena...

According to your explanation the cause of the export being reduced is passing over the depreciation advantage to the foreign buyer.
Isn't that trade off finally result in higher sales. eg: we use to sell tea for 1$, but now we sell at 0.84$ So simply this should result in a very high demand for our tea. In the international market there is unlimited supply (as its global) so that such a huge price cut should result in much higher demand.

Arena · 16 Re: Trade deficit falls 2.1% Mon Dec 31, 2012 10:23 am

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@ chamith ,

Yes you are correct.

But when we want more tea from the Colombo tea auction, automatically prices goes up and again the $ price will go towards $1. The reason is sri lankan tea supply cannot be increased with in a short period. it is a long term process. ( But this is good for all plantations in the short run for sure. I hope We will see it next month on wards from tea action prices )

So what i want to tell is we cant achieve these economic targets over night. Since the "Other factors constant " theory is not practical in the real world. So no point of asking GOV. where is the Export growth u expected from the currency depreciation. It will come gradually and Export revenue will never be increased in short run, only thing we can expect is more investors will come for export trade but in the long run.

When its come to tea...............The best option is to increase the quality of Ceylon tea instead of these currency gilmarts since Currency advantages are not sustainable and get set off from some where as i explained.

All these political economists know the game but pretend in front of the public.