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Tuesday April 16th, 2024

Sri Lanka Maha 2021 rice harvest drop 40-pct due to fertilizer ban

ECONOMYNEXT – Sri Lanka’s Maha 2021 rough rice harvest hit by a chemical fertilizer ban had dropped 40 percent from a year earlier to 1.8 million metric tonnes, Agriculture Minister Mahinda Amaraweera said.

In the 2020/2021 the paddy harvest was 1,862,901 metric tonnes, down from 3,061,394 in 2020, Minister Amaraweera told parliament.

Milled rice is about 68 percent of the paddy harvest.

Sri Lanka banned chemical fertilizer after the Government Medical Officer Association said agro-chemical s caused non-communicable diseases and according to Pliny the Elder, a Roman author who had produced an encyclopedia about 2000 years ago, ancient Sri Lankans had lived for around 140 years and their life expectancy had now almost halved to 74 years.

The government had promised to compensate farmers whose yield fell due to the fertilizer ban but no one had been compensated so far, Minister Amaraweera said.

There were 923,000 farmers listed.

“If there are any drop in the harvest during the 21/22 year, the affected farmer will be given the following compensation to secure their income for a maximum of 5-acre cultivation land,”

“I have informed PM and the cabinet that we need around 15,000 million rupees for that and to give us that,” Minister Amaraweera said.  “If we get that we will give that to the farmers.”

0.5 acres or less              -50 rupees per kilogram

More than 0.5 to 1 acre -50 rupees per kilogram

From 1 to 2.5 acres         -37.50 rupees per kilogram

From 2.5 to 5.0 acres     -25 rupees per kilogram

Minister Amaraweera said production drop in each district during the last Maha season was as follows.

Colombo            -41 percent

Gampaha           -27 percent

Kalutara              -49 percent

Kandy                  -42 percent

Matale                -31 percent

Nuwara Eliya     -55 percent

Galle                    -44 percent

Matara               -50 percent

Hambanthota   -51 percent

Jaffna                  -41 percent

Mannar              -55 percent

Vavuniya            -48 percent

Mullaitivu           -53 percent

Kilinochchi         -61 percent

Batticaloa           -71 percent

Ampara              -41 percent

Trincomalee      -44 percent

Kurunegala        -45 percent

Puttalam            -48 percent

Anuradhapura  -58 percent

Polonnaruwa    -51 percent

Badulla               -45 percent

Monaragala       -39 percent

Rathnapura       -44 percent

Kegall                  -44 percent

(Colombo/ June 14/2022)

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India allows Sri Lanka to import 10,000MT of onions

ECONOMYNEXT – India has relaxed an export ban allowing 10,000 metric tonnes of onions to be shipped to Sri Lanka, the Indian High Commission in Colombo said.

“The exemption for Sri Lanka reiterated India’s Neighbourhood First policy, adding to the Sinhala and Tamil New Year festivities here,” the statement said.

Onion prices went up in Sri Lanka after India and Pakistan banned exports.

The Directorate General of Foreign Trade has issued a notice allowing National Co-operative Exports Limited to ship 10,000 MT of onions.

The UAE has also been allowed to import 10,000MT of onions on top of 24,400MT already permitted.

A large Indian and South Asian expat community lives in the UAE. (Colombo/Apr15/2024)

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Iran President to visit Sr Lanka amid rising tension, inaugurate Uma Oya project

ECONOMYNEXT – Iranian President Ebrahim Raisi will arrive in Sri Lanka on April 24 on a one-day official visit to inaugurate Tehran-assisted $529 million worth Uma Oya multipurpose development project with 120MW hydro power generation capacity, official sources said.

The announcement on President Raisi’s visit comes two days after Iran launched explosive drones and fired missiles at Israel in its first direct attack on Israeli territory, a retaliatory strike that raised the threat of a wider regional conflict.

“The President is visiting to inaugurate the Omaoya project. He will be on a one-day visit,” an official at Iran embassy in Colombo told EconomyNext.

A Sri Lankan Foreign Ministry official confirmed the move.

This is the first time an Iranian President coming to Sri Lanka Iranian after then President Mahmoud Ahmadinejad’s visit in April 2008.

The Omaoya project was originally scheduled to be completed in 2015, but had been delayed several times due to unexpected issued faced during the project cycle and funding issue after the United States imposed economic sanctions on Iran and economic crisis in Sri Lanka.

The project was started in 2010 and the funding was to be received as loan grant from the Iranian government. However, Iran was able to provide $50 million before the sanctions. Sri Lanka has to bear the cost after the sanctions.

The project includes storing water in two reservoirs with dams before being brought through a 23 km tunnel to two turbines located underground and generating hydro power with a capacity of 120 megawatts and added to the national grid.

After power generation, the water is expected to be brought to three reservoirs while supplying water to 20,000 acres of old and new paddy fields in both the Yala and Maha cultivating seasons.

The Memorandum of Understanding (MOU) for the construction was signed between the two countries in 2007 while Sri Lanka’s Cabinet approved the execution of the contract agreement between the Executing Agency, Sri Lanka’s Ministry of Irrigation and Water Management (MOIWM) of the GOSL and Iran’s FARAB Energy and Water Projects (FC).

When commencing the project on March 15, 2010, the scheduled date of completion of the project was on March 15, 2015. But the schedule completion date was extended to December 31, 2020 due to the unexpected water ingress into the head race tunnel and followed by social impacts.

The trade between the both countries suffered after the US sanctions. However, Sri Lanka inked a deal in December 2021 with Iran to set off export of tea to Iran against a legacy oil credit owed by state-run Ceylon Petroleum Corporation to the National Iranian Oil Company.

Sri Lanka owes $251 million for crude imported before the US imposed sanctions on Iran. (Colombo/April 15/2024)

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Sri Lanka to discuss two contentious points with bondholders: report

ECONOMYNEXT – Sri Lanka and sovereign bondholders are to discuss two matters in the near future which the two sides failed to reach agreement at March talks in London, a media report quoting a top aide to President Wickremesinghe as saying.

Sri Lanka and bondholders had discussed four matters on restructuring international sovereign bonds in late March and agreement had been reached on two, President’s Chief of Staff Sagala Ratnayake was quoted as saying on state-run ITN television.

A restructuring proposal by bondholders was not in line with IMF requirements, and Sri Lanka had sent a counter proposal, he said.

The matters will be discussed at round of talks in the near future.

Sri Lanka was optimistic of reaching an agreement with the bondholders before June, officials have said.

According to matters already in the public domain, sovereign bond holders are keen to get a bond tied to dollar gross domestic product, as they feel IMF growth projections are too low.

In past re-structuring so-called value recovery instruments, a type of warrant, gave their owners extra payments if a country did better than expected and were tied to items like oil prices.

Bondholders had initially proposed bond which would have a lower hair cut initially, and it will have additional hair cuts if growth is low (about 3.1 percent) as projected in an IMF debt sustainability analysis. (Colombo/Apr15/2024)

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