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Tuesday May 28th, 2024

Sri Lanka January Ceylon tea production down 16.1-pct

ECONOMYNEXT – Sri Lanka’s Ceylon Tea production has dropped by 16.13 percent in January 2023 from a year earlier to 19.14 million kilograms, mainly due to policy mismanagement and bad weather, reports said.

The effects of a chemical fertilizer ban under former President Gotabaya Rajapaksa’s government are still lingering in tea farms and bushes are still recovering from the lack of nutrition. The fertilizer ban was lifted in 2022 but supplies were limited amid forex shortages.

Sri Lanka tea production for January 2023 was 19.14 million kilograms down from 22.8 million kilograms a year ago.

In January 2023, high grown tea production fell 34 percent to 3.5 million kilograms.

Medium grown fell 36.9 percent to 2.3 million kilograms and low-grown was down 3.01 percent to 13.1 million kilograms, industry data published by Forbes and Walkers Tea Brokers show.

The national average tea price in January was 4.05 dollars or 1,466.76 in rupees.

Sri Lankan tea has been earning higher prices for tea exports in rupees after the currency was depreciated in March against the USA dollar in 2022.

Tea exports were also down by 9.4 percent from a year ago to 17.56 million kilograms in January 2023.

“We are talking about a tea bush that had little to no fertilizer for one and half years, some of them even for two years,” Tea Board Chairman Niraj de Mel told EconomyNext.

“Some private sector companies got it after the ban but it was also a very small percentage.

“Just because the fertilizer issue’s being sorted out, does not mean everything is sorted now.”

The first three months may not indicate the response to fertilizer De Mel said but a recovery is likely to be seen later, on a lower base.

“So my outlook is in the second quarter, April, May or June should be better than last year” he said.

In 2022, Sri Lanka produced 251 million kilograms of tea and the new target of 2023 is around 272-280 million kilograms, with an expected forex revenue of 1.4 billion US dollars. (Colombo/Feb 26/2023)

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Sri Lanka president’s UNP proposes postponing elections by two years

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — Sri Lanka’s United National Party (UNP) has called for a referendum to postpone both presidential and parliamentary elections by two years to extend President Ranil Wickremesinghe’s term to continue ongoing economic reforms.

UNP general secretary Palitha Range Bandara called on the main opposition Samagi Jana Balawegaya (SJB) and the leftist opposition formation National People’s Power (NPP) to support the move.

At a press conference on Tuesday May 28, Bandara said postponing the two elections would not be undemocratic as it would be the result of elected representatives in parliament passing a motion, followed by a referendum.

Defending the proposal, he recalled the controversial decision by then Prime Minister Sirimavo Bandaranaike to postpone elections in the 1970s, which resulted in the decimation of her Sri Lanka Freedom Party (SLFP)-led alliance.

Bandara said that all parties must understand that now is not the time for elections as the economy has yet to emerge from bankruptcy and that President Wickremesinghe must be permitted to carry out his reforms which have already brought stability.

The UNP’s latest statement is a far cry from its pronouncements as recently as last weekend that the presidential election would definitely be held between September 17 and October 18 this year, followed by the parliamentary elections in early 2025.

UNP spokesmen also boasted that Wickremesinghe would not only contest the presidential poll but would also win it.

Tourism and Sports Minister Harin Fernando told reporters that Wickremesinghe would definitely contest the election, in response to some speculation that the president may opt to sit out.

“I think President Wickremesinghewill himself reveal his plans next week or one of these days,” said Fernando.

“He will definitely contest. I said he would for sure. Not only will he contest, he will also win,” he added.

Labour Minister Manusha Nanayakkara concurred.

“President Wickremesinghe will definitely win the election,” he said, adding that the president has provided much relief and that the economy continues to recover having fallen to its lowest point. (Colombo/May28/2024)

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Sri Lanka reforms have started to yield positive outcomes: State minister

ECONOMYNEXT – Sri Lanka’s State Minister of Finance Shehan Semasinghe says reforms have lead to positive incomes, including an increase in reserves.

“The reforms have started to yield positive outcomes, reflecting significant progress in multiple areas. Sri Lanka’s gross official reserves have seen a significant increase, reaching USD 5.5 billion by the end of April 2024,” Semasinghe said on social media platform X (twitter).

“Additionally, the Sri Lankan rupee has appreciated by approximately 8 % against the US dollar so far in 2024. This will boosts investor confidence and enhances the country’s ability to manage external shocks and meet international obligations and enhance confidence on the economy.

“The appreciation of the rupee can help lower inflation and reduce the overall cost of living and make it easier for the government and businesses to service foreign debt, thereby improving our financial reputation globally. Further, will improve the trade balance by potentially reducing the trade deficit.”

Sri Lanka’s inflation was 1.5 percent in the 12-months to April 2024, measured by the widely watched Colombo Consumer Price Index, data from the state debt office showed.

The CCPI Index fell 0.8 percent, to 195.2 points in the month of April after falling 1.9 percent in March.

Sri Lanka’s central bank has been operating largely deflationary policy, since September 2022, except perhaps in December 2023, and also allowed the rupee to appreciate in the balance of payments surplus it created.(Colombo/May28/2024)

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Sri Lanka risks foreign retaliation over VFS visa deal

ECONOMYNEXT – The Maldives could take reciprocal action after Sri Lanka’s new system of outsourcing its visas, which requires the payment of “processing” and “convenience” charges of 26 dollars, even though the government does not collect any fees.

Maldivian authorities have reminded Sri Lanka of the long-standing bilateral agreement under which their citizens could travel freely between the two neighbours without any charges or bureaucratic barriers.

A one month stay is available without a fee.

Maldivians, who consider Sri Lanka their second home, often spend more than a month in the larger country, but are now required to pay 26 dollars to VFS Global, which has controversially been contracted to handle Sri Lankan visas.

“The Sri Lankan government will not charge a fee, but Maldivians still have to pay VFS after applying online for a visa,” a Maldivian government official said in the capital, Male. “This violates the spirit of our agreement.”

He said the new administration of President Mohamed Muizzu was taking up the issue with Sri Lankan authorities in both Male and Colombo.

In a worst-case scenario, the Maldives will be compelled to reciprocate the new cost of a Sri Lankan visa and charge Sri Lankans traveling to the archipelago. There are also expat Sri Lankans in the Maldives.

There are only a handful of countries to which Sri Lankan passport holders can travel without any visa restrictions.

Singapore is another country which could take action against Sri Lanka if the bilateral deal is found to be violated, according a source said.

Opposition parties have said in parliament that outsourcing the visa handling to VFS Global and their partners was a bigger corruption scandal than the bond scam of 2015 and 2016, when billions of rupees were stolen through insider deals. (COLOMBO/May 28, 2024)

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