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Tuesday May 30th, 2023

Sri Lanka cultivates Australian ‘Hass’ to boost exports, dollar revenue  

ECONOMYNEXT – Sri Lanka’s Ministry of Agriculture has initiated a program to cultivate Australian ‘Hass’ avocado varieties with the aim of boosting foreign earnings through more exports, an agriculture ministry said.

Compared to local green avocado, Hass is larger in size, matures faster, and has high production rates, along with a longer shelf life, which is crucial for perishable goods exporting, the official said.

“Under the agricultural sector modernization project, we are currently cultivating the Hass variety and hope to expand it further,” Dharma Wanninayake, Agriculture Ministry Media Secretary, told EconomyNext.

According to the Agriculture department, the Hass avocado has high nutritional and medicinal value, containing around 10 percent fat.

The average weight of the fruit is about 275-375 grams, and the rind of this variety is thick, making it resistant to fruit fly damage, with low post-harvest damage.

Apart from being consumed as a fruit, the Hass variety is also being used to produce avocado oil and butter.

Around 300 seeds have been planted and are in the process of budding to ensure a faster harvest.

“Initially, we have chosen 200 acres of land in Badulla district for avocado cultivation,” Wanninayake said.

“We expect to produce value-added products from this and the target is to introduce this to entrepreneurs in this agriculture field.”

On average, a single Hass avocado tree produces around 200 kilograms of fruit per hectare with the first harvest expected in 2026.

Sri Lanka has been desperate to boost its export earnings and fresh fruits have been long considered as one of the sources to boost exports. The island nation already exports a significant volume of tea, coconut, cinnamon, and rubber. (Colombo/Mar 09/2023)

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Sri Lanka’s stocks fall on a one-month low on debt restructuring and optimization concerns

ECONOMYNEXT – Sri Lanka’s shares lowered on a one month low on Tuesday on selling pressures and a wait and see approach on delays in confirmations of debt restructuring and debt optimization, an analyst said.

The main All Share Price Index (ASPI) was down 0.50 percent or 42.52 points to 8,532.60, this is the lowest the index has been since April 27, while the most liquid index was up 0.14 percent or 3.42 points to 2,418.90.

“Investors are adopting a wait and see approach on the need for more clarity on debt restructuring and debt optimization and decisions taken at the Policy Review Meeting,” an analyst said.

Sri Lanka’s government was to disclose the stance on domestic debt restructuring towards the end of May, which is why investors have adopted a wait and see approach, however officials have stated there will be a delay in the process of revelation. 

A news article circulating says, non-agreement on the percentage of haircut that the external creditors would take in Sri Lanka’s debt restructuring has taken the Central Bank to the drawing board which has led to the delay in announcing the debt restructuring strategy. 

Sri Lanka’s Monetary Policy Review is scheduled for 01 June 2023, investors are quite optimistic that inflation is to lower and interest rates will decrease, an analyst said.

Analysts said the low volumes seen in the market are due to the debt restructuring concerns, and investors are waiting for the monetary policy review for the next month.

“Stocks went down due to selling pressures resulting from relaxed import restrictions, which are expected to reduce the monopolistic powers held by domestic retailers,” an analyst said.

The main reason for the market’s negative sentiment is the loss of monopoly as import restrictions ease, an analyst said.

The market generated revenue of 575 million rupees, while the daily average turnover was 1.2 billion rupees.

Top losers during trade were Vallibel One, Ceylon Tobacco Corporation and Elipitiya Plantations.

The market generated a foreign inflow of 33 million rupee and the net foreign inflow was 112 million rupees. (Colombo/May 29, 2023)

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Sri Lanka rupee closes at 293.50/294.50 to dollar , bond yields steady

ECONOMYNEXT – Sri Lanka’s rupee closed at stronger at 293.50 /294.50 against the US dollar in the spot market on Tuesday, while bond yields were unchanged, dealers said.

The rupee closed at 296.75 /297.25 to the US dollar on Monday after opening around 296.50 /297.50 rupees.

A bond maturing on 01.09.2027 closed at 26.50/65 percent unchanged from Monday’s close.

Sri Lanka’s rupee is appreciating amid negative private credit which has reduced outflows after the central bank hiked rates and stopped printing money. (Colombo/ May 30/2023)

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Sri Lanka food producers on countdown; 6-months to reduce trans fat content

ECONOMYNEXT – Sri Lankan food manufacturers only have another six months to reduce the amount of trans fat in food items as the government plans to ban high trans-fat food from January 2024 onwards, an official said.

“A six-month grace period has been given to existing manufacturers, sellers and distributors whose products contain trans-fat,” an official of the Ministry of Health told EconomyNext requesting anonymity.

According to a Ministry of Health gazette issued on… a person shall not sell, offer for sale, expose or keep for sale or advertise for sale, any packaged food product containing trans-fat unless the total amount of trans-fat of such food product per 100 grams or 100 milliliters of the food product is declared on the label of such packaged food product.

However, these regulations will not be applicable for export oriented food products.

Trans-fat is a type of fat that has certain chemical properties and is usually found in processed foods such as baked goods, snack foods, fried foods, shortening, margarine, and certain vegetable oils.

Eating trans-fat increases blood cholesterol levels and the risk of heart disease.

Meanwhile, the World Health Organization (WHO) has praised Sri Lanka for enacting a legislation on trans-fat to protect health and prevent premature deaths from coronary heart disease, a statement from the WHO said.

“Eliminating trans-fats from food supplies is a cost-effective measure with enormous health benefits,” the statement quoting Poonam Khetrapal Singh, Regional Director, WHO South-East Asia said.

“By enacting legislation on trans-fat, Sri Lanka has once again demonstrated its resolve to protect and promote the health of its people”.

The regulations are coming into effect as Sri Lanka is struggling with food insecurity as the country recovers from its worst economic crisis.

However, an improvement in food security across all provinces has been recorded, according to an assessment by a Crop and Food Security Assessment Mission (CFSAM) of two UN agencies. (Colombo/ May 30/2023)

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