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Thursday August 18th, 2022

Sri Lanka chicken, egg production plunge amid soft-peg collapse

ECONOMYNEXT – Sri Lanka’s chicken meat production has collapsed 30 percent and egg output 40 percent as a currency collapse pushed up costs feed imports were blocked by foreign exchange shortages, an industry official said.

Sri Lanka is now going through the worst currency crises triggered by the island’s Latin America style intermediate regime central bank set up by a US money doctor in 1950.

“Small and medium farmers are leaving the business due to feed shortages and because big poultry companies are stopping buy back schemes,” Ajith Gunasekera, President of the All Island Poultry Association said.

Broiler meat output has fallen 30 percent to 12,000 metric tonnes a month from 18,000 metric and prices have shot up, he said.

A kilo of chicken is around 1,200 rupees from 460 rupee levels before economists started to print money to target an output gap by mis-targeting interest rates, and official inflation rose 39 percent in the year to May 2022.

Monetary Malnutrition

Sri Lanka’s central bank printed money for over two years to mis-target interest rates and collapsed the currency to 360 to the US dollar from 200, in a failed attempt to float the currency with a surrender requirement (forced sale of dollars to the central bank).

Though interest rates were raised in April forex shortages are continuing as attempts are made to enforce an unstable peg at 360 to the US dollar with borrowed dollars and money is printed to pay state worker salaries (Sri Lanka pegs rupee in both directions in May 2022 amid ‘float’).

The current economic problems come from applying floating rate monetary policy (liquidity injections or printing money from open market operations for stimulus) to a reserve collecting peg (flexible exchange rate).

Inflation and currency depreciation created by the central bank have put protein in particular out of reach of the less affluent pushing up malnutrition as had happened when the country’s economists who favour collapsing soft-pegs printed money in earlier occasions.

Basic starch in the form of rice has rise from 105 rupees a kilogram to 230 rupees a kilogram after the latest bout of money printing while people are losing jobs and wages are cut in the private sector.

Doctors at Lady Ridgeway, the country’s main children’s hospital have said they are seeing higher levels of malnutrition among children as the flexible exchange rate bites.

Sri Lanka’s economists have fiercely resisted changing the unstable soft-peg to a single anchor regimee such as a hard peg or a clean float with no reserves so that they could continue to intervene and depreciate the currency (REER targeting) to boost exports by destroying real salaries of workers.

The economists have destroyed the currency from 4.70 to US dollar in 1950 to 360 to the US dollar so far and have imposed trade and exchange control on the public who are net savers are unable to print money and cannot create monetary instability.

Of late expatriate workers are also being scapegoated for sending money to their families hit by inflation, outside official banking system linked to the non-credible pegged system.

Analysts have called for single anchor regime with strict laws to restrain the central bank’s independence to engage in ‘flexible’ policies maintain and monetary stability in the future. (Sri Lanka’s central bank needs accountability and restraint, not independence)

Eggs Production

Eggs which were around 18 to 25 rupees before the latest money printing bout have now shot up to 43 to 50 rupees.

Egg production has collapsed 40 percent, amid feed shortages.

Gunasekera said daily egg production which was around 700,000 to 800,000 and now fallen to around 400,000.

“Chicken are also laying fewer legs due to nutrition problems,” Gunasekera said “A chicken will usually lay about one egg a day but without proper feed they will lay fewer eggs.”

Egg prices are up partly due to high transport costs from Kuliyapititya where most of the large egg farms are located to Colombo, he said.

About 73 percent of the cost of raising broilers was feed.

Maize which was 40 to 45rupees a kilogram has now gone up to 80 to 90 rupees a kilogram but was there was no supply with the domestic Maha season harvest having failed due to a fertilizer ban.

Due to reduced paddy milling, rice polish is also not available.

Forex shortages from the non-credible peg has made it difficult to import maize or soya meal.

The industry is hoping to get some inputs from the Indian credit line. (Colombo/June18/2022)

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  1. Veerapuran Appu says:

    Sack the lot and employ Singaporeans to manage the economy. No corruption, 100% output. SRI LANKANS COULDNT ORGANiSE A PARTY IN A BREWERY

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Comments (1)

Your email address will not be published.

  1. Veerapuran Appu says:

    Sack the lot and employ Singaporeans to manage the economy. No corruption, 100% output. SRI LANKANS COULDNT ORGANiSE A PARTY IN A BREWERY

Japan grants medical equipment worth 500-mn yen to Sri Lanka govt hospital

ECONOMYNEXT –  The  Japanese government has granted medical equipment worth 500 million Japanese yen to the Sri Jayawardenepura government hospital to improve the hospital’s treatment facilities under Japan’s Non-Project Grant Aid Programme.

A statement by the Department of External Resources said the grant was given in response to a request by Sri Lanka’s government.

Under the 500 million Japanese yen (approximately 1,265 million rupees) grant assistance, angio-CT machine, other radiology equipment, ophthalmic instruments, surgical instrument sets (stainless steel with satin finish), 15 dental units with accessories, liver transplant instrument sets, and a cardiac catheterization laboratory will be provided, a statement said on Thursday August 18.

Sri Lanka due to its worst economic crisis in its post-independence history is currently facing shortages of essential medicine, non-essential and lifesaving medicines pressuring the health sector to only attend to emergency cases to preserve available limited medicine stocks.

On Thursday at the policy rate announcement media briefing by the Central Bank of Sri Lanka (CBSL), Governor Nandalal Weerasinghe said, with the strict measures taken in the recent past, Sri Lanka is currently managing the limited forex income coming into the country to purchase essential goods such as fuel and medicine.

Sri Lanka has received various grants from several countries including China and India which gave a 200 million US dollar credit line to purchase medicine from India.

In June, Minister of Health Keheliya Rambukwella said there is no shortage of vital medicines in the country and all medicines will be restocked by August 2022. However, shortages of medicine aer still being reported in various hospitals islandwide.

“This improvement at the hospital will facilitate the enhancement of the quality of the care provided especially to the patients with non-communicable diseases while enabling high quality medical professional training to medical undergraduates and postgraduates from the National School of Nursing at the aculty of Medical Sciences of the University of Sri Jayawardenepura,” the External Resources Department statement said.

“This project will eventually assist the development of human resources of the health sector in Sri Lanka,” it said. (Colombo/Aug18/2022)

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Sri Lanka immigration on the hunt for Scotswoman who documented protests

Kayleigh Fraser via @kayzfraser Instagram

ECONOMYNEXT – Sri Lanka’s Immigration and Emigration Department is attempting to track down Kayleigh Fraser, the Scotswoman who documented the country’s anti government protests.

Fraser was ordered to leave the island on or before Monday August 15 after officials cancelled her visa. She and her lawyer had filed a writ petition against her deportation with the Supreme Court, which was dismissed on the grounds that she was not being deported deported, only had her visa cancelled.

“The learned State Council submits that the impugned document ‘X4’ is not a deportation order as claimed by the petitioner and she confirmed that no deportation order has been made up to date by the authorities against the petitioner,” a court document shared by Fraser said.

Immigration officials stated that the police and SSD were on the lookout for Fraser.

“Her visa was cancelled on August 15, so we are looking to put her in a detention camp until she can get a ticket to leave the country,” the official told EconomyNext, confirming that Fraser was not getting deported but that her visa was cancelled.

“Legally we cannot give her a grace period, but on a humanitarian basis, we can give her the time to get a ticket,” the official said.

Fraser had used her social media to share pictures and videos of the anti-government protests in front of the Presidential Secretariat, and has been vocal against state sanctioned violence against protestors.

“Given what I have witnessed here in Colombo – the chemical weapons attacks on protestors, the government instructing the military to beat and torture protestors, the arbitrary arrests and blackmailing of prominent faces from the protests, intimidation tactics and threats etc – I should not be surprised at what has happened today,” she said, speaking to the Daily Record, a Scottish tabloid.

There were no reports of chemical weapons being used against any protestors in Sri Lanka, and it is unclear whether Fraser was erroneously referring to tear gas which was used to disperse crowds.

Fraser also called out media channels who she claimed had attempted to misrepresent peaceful protests as violent.

“It became very clear to me early on that this was not being reported. There was no international coverage on what was happening, and the media here were very much trying to say that it was violent, but that is the absolute opposite of what I saw,” she said over social media.

“What I saw was a beautiful union [of people] coming together in absolute unity. It was a beautiful movement and I’ve never seen anything like that in my life and that kept me coming back.”

However, Sri Lanka’s authorities maintain that the arrests so far have been legal and that violence did occur on the part of some protestors, though activists and some civil society groups disagree. On May 09, after supporters of then Prime Minister Mahinda Rajapaksa launched an unprovoked attack on peaceful protestors in Colombo, a wave of retaliatory mob-violence erupted across the country which saw the residences of some parliamentarians torched to the ground. One government MP was killed.

Authorities say many of the arrests so far have been of protestors who had violated court orders or had illegally occupied government buildings.

Fraser continues to post on her social media. (Colombo/Aug18/2022)

 

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Selling price in Sri Lanka’s apartments increase by over 47 pct: property tracker

ECONOMYNEXT – Overall selling prices of apartments in Sri Lanka increased by 45.17 percent when compared to June 2021, according LankaPropertyWeb’s housing price index.

Devaluation of the Sri Lankan rupee against the US dollar which has resulted in shortages of raw materials for construction which has in turn led to skyrocketing costs of construction and rising interest for housing loans, a report said, has prevented the construction of new houses leading to an increase in the purchase of houses and apartments.

The overall asking prices of houses in Sri Lanka had increased by 21.85 percent and prices of apartments for sale in Colombo had increased by 32.9 percent when compared to June 2021.

The Construction Industry Development Authority showed that the average price of a 50Kg cement bag sold by public and private dealers has increased by 187 percent from June 2021 to June 2022.

LankaPropertyWeb’s Development Consultancy and Research Team data showed that the top five searches for apartments for sale were from Colombo 2, Colombo 3, Colombo 5, Colombo 6 and Rajagiriya.

A resident from an apartment in Colombo 06 said, “We moved to this area due to the convenience, we spend less on transport and can go by bus, train or even walk to destinations. This was a massive save for us during the peak of the fuel crisis.”

Sri Lanka’s overall residential land price has dropped by 62.90 percent, a seasoned constructor told EconomyNext. This is because people are no longer interested in investing in lands and are less motivated to build houses because of the high rates of interest for housing and loans and there is value for money, he said.

Geethal Perera, an apartment builder in Colombo said: “Locals are not investing in assets or real estate because of the tumor in the economic conditions. However many overseas are investing because the international value for money on the rupee is favorable.”

The website also recorded a surge in search traffic from countries such as the UK, Australia, the US, Canada, and the UAE, said Tharindu Jayarathne, Head of Research at LankaPropertyWeb. (Colombo/Aug18/2022)

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