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Thursday March 23rd, 2023

Sri Lanka president calls for global agriculture ministers’ meeting on food needs

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe has urged United Nations chief António Guterres to call a meeting of agriculture ministers of all member states to assess and submit a report on the food needs for 2023 and 2024.

The president’s media division (PMD) said in a statement that Wickremesinghe had made this request from both Guterres and President of Egypt Abdel Fattah El-Sisi at a round table discussion on food security at the ongoing COP27 conference on climate change in Sharm El Sheikh, Egypt.

The president has emphasised the need to work closely with the multilaterals, sources of funding and the need to formulate a sustainable debt relief plan immediately to ensure global food security, the PMD said.

It is essential to finalise this plan by February 2023 and for it to be implemented by the end of the 1st quarter of 2023, the president has said, noting that otherwise the damage caused to the political and social structures of countries will be irreparable. He also highlighted the urgent need to compile a medium-term plan to ensure global food security at COP28.

The full text of his remarks, according to the PMD statement, is as follows:

“There are nearly one billion people who are suffering from hunger today, and according to the IMF, over 300 million people’s livelihoods are in danger. Countries affected fall into two categories,
1. Countries where food is no longer available. These countries either have no means to buy the food due to rising costs or are unable to produce their own food.
2. Countries which traditionally had an adequate food supply but now find these sources of food out of reach due to rising costs.

There was a time when Sri Lanka had no fertilizer and was unable to produce our own food. However, the successful food security program is a combined mechanism for food security and the recently accessible fertilizer stocks that was made possible thanks to the international community. Nevertheless, there is a sizeable group who do not have the economic resources to access food.

All must ensure that food is made available to countries that fall within these two categories. Secondly, they require financial assistance to provide food for their populations.

Common to both categories is the rising levels of debt servicing. The increasing cost of debt has meant that it is more difficult for the developing countries to ensure affordable food for the total population.

The IMF estimate that the food and fertilizer price shock, coupled with the rising costs of debt servicing, will add US $9bn to the food import bills of the 48 worst affected countries. This means that a resolution to the debt crisis is needed to tackle both these categories.

Currently we are seeing that there is no overall plan to address this situation, and no focal point. The UN together with COP and the FAO, the World Food Program, the World Bank, and the IMF, must form that focal point.

I urge the Secretary-General of the UN and Egypt, as the head of the COP27, to call a meeting of the Ministers of Agriculture of all countries to assess the food requirements of 2023 and 2024 and submit a report on the food position. Working together with the multilaterals, sources of funding and a sustainable debt relief plan must be formulated. It is essential that this plan is finalized by February 2023 and taken up for implementation by the end of the 1st quarter of 2023.

We must act fast; otherwise, the damage caused to the political and social structures of countries will be irreparable. At COP28, it is of utmost importance that we compile a medium-term plan to ensure global food security.” (Colombo/Nov08/2022)

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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)

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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)

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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)

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