MONETABRIEF – Sri Lanka's apparel exports slumped in June 2026, from a year ago, with shipments to the UK falling 29.23 percent, and the EU 17.79 in line with trends seen in Bangladesh and other key Asian manufacturing hubs, official data showed.
Exports to the US was down the least at 3.31 percent.
Total apparel export from Sri Lanka in June fell 11.74 percent to 408.75 million US dollars.
"The Apparel and Textiles sector faced a challenging period in June 2026…", the island's Export Development Board said in a statement.
"The performance reflects the continued challenges faced by the global apparel industry, including subdued consumer demand and evolving market conditions, which have impacted export orders during the period."
The war in the Middle East sent energy prices soaring, and also costs of apparel making with nylon, polyester and acrylic fiber being made of petroleum.
Consumers in many markets have faced multiple years of inflation from so-called abundant reserve regimes (floor systems or single policy rates) operated by the Federal Reserve and major central banks.
The UK has seen seven Prime Ministers in a decade, seeing much more instability than when macro-economists busted the Bretton Woods triggering the Great Inflation years of the 1970s.
Bangladesh's The Daily Star newspaper said apparel exports from the South Asian nation to the EU fell 18.89 percent from January to May, India was down 13.3 percent and Cambodia 10.77 percent, quoting Eurostat data.
Dozens of companies in Bangladesh had closed down over the past in few months, leaving thousands of workers unemployed, Bangladesh reports said.
Sri Lanka's situation is not the exactly the same as Bangladesh, which has seen orders shift over longer period, an apparel industry official said.
Some key buyers of Sri Lanka apparel, who have built up stocks have been cutting inventory which had helped reduced demand in June.
In Europe, a new law has banned companies from destroying old stock, forcing them to sell apparel at discount. (EU ban on destroying unsold clothes takes effect)
There are expectations that demand will stabilize in the coming months, industry officials say.
Overall exports from Sri Lanka to many European countries were also down in June, EDB data showed.
But the value of petroleum exports from Sri Lanka (aviation and bunkers for example) jumped 103 percent to 145 million dollars, as its value also went up.
Electrical and electronic components rose 474 percent to 196 million US dollars for reasons that were not clear.
During the cumulative period January–June 2026, exports to India recorded a notable growth of 36.16%, reaching US$ 688.47 Mn, primarily driven by increased exports of boilers, piston engines, pumps & vacuum pumps, petroleum oils, animal feed, and base metal products.
Exports to India also grew 156 percent to 246 million, helping keep total merchandise exports up.
In 2026 growth in exports to India were driven by boilers, piston engines, pumps and vacuum pumps, petroleum oils, animal feed, and base metal products, the EDB said.
Total merchandise exports grew 15 percent to 1,316 million dollars. (Colombo/July22/2026) (Colombo/July22/2026)