An Echelon Media Company
Thursday March 23rd, 2023

Sri Lanka chicken farmers eye exports as domestic prices drop

ECONOMYNEXT – Sri Lanka’s chicken farmers are looking for export opportunities as chicken prices fall steeply after monetary tightening and a supply response to earlier higher prices.

A kilogram of chicken now retails between 950 rupees and 1,200 rupees compared to 1500 – 1750 rupees a month ago.

Dressed freshly killed chicken in small shops are now selling around 1,000 a kilogram while value added tax and a cascading social security levy is adding close to 200 rupees to the price of frozen chicken in supermarkets.

Surging chicken meat prices earlier had incentivized farmers to grow more chicken and now there is more supply, Ajith Gunasekera Chairman of the All Island Poultry Association said.

Sri Lanka’s egg supplies are still tight after the Consumer Affairs Authority slapped price controls on eggs and incentives farmers to kill layers instead of farming new ones as feed prices surged during the height of the currency crisis, Gunasekera said.

Sri Lanka’s central bank hiked rates in March as the rupee collapsed after two years of money printing and galloping inflation threatened to turn into hyperinflation.

Chicken meat was around 450 to 500 rupees a kilogram before the central bank printed money to mis-target rates and collapsed the rupee to around 360 to the US dollar.

Though food supplies are improving, real salaries are half of what they were and income earners in particular do not have enough money for food, leading to malnutrition among poorer children. Salaries have to almost double to make up for the currency collapse.

Chicken feed supply has improved with forex shortages easing after monetary tightening, but import taxes are making Sri Lanka un-competitive in export markets, industry officials say.

Sri Lanka’s poultry farmers are now eyeing export markets. Sri Lanka began exports to the Middle East during the Coronavirus crisis.

“We are hoping to export chicken because of a viral bird flu, but the only constraints are taxes and 80 percent of our production cost is on animal feed,” said Gunasekera said.

“We are not competitive because of the animal feed issue and the taxes placed, which makes us to be underthrown by other competitors,”

An Port and Airport Levy as well as other duties artificially pushes up cost of production. President Ranil Wickremesinghe has promised to remove para tariffs that make exports un-competitive.

Minister of Livestock DV Herath said in Parliament that, Sri Lanka had 249,063 chicken farms, but the crisis had led to the closure of 16,500 farms.

Minister Herath however was on a North Korean style ‘self-sufficiency’ track and not concerned about being export competitive.

“Specialists have said that Sri Lanka will be able to achieve sufficiency if we had consistent supplies of food and water,” he told parliament. (Colombo/Dec08/2022)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka establishes committee to investigate aircraft incidents

An aircraft lands at the Jaffna International Airport, which was opened in October 2019 and promises to push the tourism frontiers in Jaffna.

ECONOMYNEXT: Sri Lanka’s has established an expert committee under the state-run Civil Aviation Authority to investigate aircraft accidents and to implement precautionary methods in the Sri Lankan airspace, an Official said.

“Even if it is only one flight, there is a chance an accident may occur,” Civil Aviation Authority of Sri Lanka, Director General, P. A. Jayakantha said.

“This particular committee is there to investigate aircraft accidents and act as a mechanism to take over if something goes wrong”.

Sri Lanka has encountered around 2,700 minor aircraft accidents and incidents mostly on the ground in the 19 years through 2021, the CAA annual reports showed.

The new committee will analyze the past accidents and take precautionary measures while also conducting investigations and provide independent reports in the future, Jayakantha said.

The team is provided with required training and qualifications by the CAA along with an International organization, free of charge.

“Internationally also it is a requirement to have a team to investigate the aircraft accidents,” Jayakantha added.

“For a long time we have not fulfilled this requirement and that is why we established this team with the cabinet approval. Moreover, recently, Sri Lanka’s two aircrafts, one training aircraft and a commercial aircraft met an accident”

The committee will be on active duty, until the Accident Investigation Act is passed and a proper Aircraft Accident and Incident Investigation Bureau is established. (Colombo/ Mar23/2023)

Continue Reading

Sri Lanka bond yields steady, Rupee 319/325 at close

ECONOMYNEXT – Sri Lanka’s treasury bond yields closed steady on Thursday while rupee closed weaker, dealers said.

A 01.07.2025 bond closed at 30.60/31.00 percent on Tuesday, down from 30.25/75 percent on Wednesday.

A 15.09.2027 bond closed at 27.80/28.10 percent, steady from 27.90/28.00 percent from Wednesday.

Sri Lanka rupee closed at 319/325 against the US dollar depreciating from 318/320 from a day earlier. (Colombo/ March23/2023)

Continue Reading

Sri Lanka shares dive to two-week low on local debt restructuring fears

ECONOMYNEXT – The Sri Lanka market fell for a fourth session to a two-week low on Thursday, led by financials, as worries over domestic debt restructuring continued after the IMF loan was approved earlier this week resulting in investors adopting a wait-and-see approach until further clarity was provided, analysts said.

The main All Share Price Index (ASPI) closed down 1.38 percent or 131.07 points to 9,395.98, lowest since March 02.

Analysts said, majority of the banks have been on slower investment trends on fears of domestic debt restructuring after the IMF approval and waiting for more clarity on the local debt restructuring.

“The market is on muted sentiments despite the IMF loan being approved and is going through a period of consolidation,” Ranjan Ranatunga of First Capital Holdings said.

The market saw a net foreign outflow of 298 million rupees and the total offshore inflows recorded so far in 2023 to 3.3 billion rupees.

The most liquid index, S&P SL20, closed 1.64 percent, or 45.33 points, down at 2,722.94.

The market saw a turnover of 3.4 billion rupees on Thursday, above this year’s daily average of 1.8 billion rupees.

This is the highest turnover generated since March 08, which is when the market was driven off of positive sentiments from International Monetary Fund deal hope after Chinese assurances.

Top contributors to revenue was Agalawatte Plantations, on off board transactions of a stake change, contributing revenue of 1.6 billion rupees, Ranatunga said.

Top contributors to revenue industry wise was Food and Beverage and Telecommunications.

Sri Lanka Telecom has been seeing positive uptrends as the Secretary to the Treasury has informed the Board of Directors of Sri Lanka Telecom PLC (SLT) and Lanka Hospitals PLC that the Cabinet of Ministers has granted approval in principle for the divestment of the stakes held by the Treasury Secretary in the two companies.

Top losers were Sampath Bank, Hatton National Bank and Commercial Bank.

Sri Lanka is looking at options to re-structure domestic debt, or local law local currency debt (LLLC), without harming the banking sector and announce them the International Monetary Fund said in a report.

Banks have been witnessing profit taking and selling pressures after continuous uptrends prior to the IMF loan had been approved.

Analysts said, selling pressures is expected to ease as the IMF hopes to reduce inflationary pressures which will in turn lead to reductions in interest rates. (Colombo/Mar23/2023)

Continue Reading