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Thursday June 20th, 2024

Sri Lanka projects 0.5mn tonne rice surplus in 2019

ECONOMYNEXT – Sri Lanka is projecting a 535,000 metric tonne rice surplus for 2019, after two seasons of good harvests, though the island’s paddy cultivators do not produce standard export grades of the grain unlike tea, rubber, coconut and spice farmers.

Sri Lanka’s Department of Agriculture said 3.07 million metric tonnes of paddy was produced in the main Maha season, which can be milled into 1.94 million metric tonnes of rice.

In the Yala minor cultivation season, the paddy crop is estimated at 1.54 million metric tonnes, which could be milled into 0.94 million metric tonnes of rice.

The annual rice availability is estimated at 2.88 million metric tonnes, when a total of 4.61 million metric tonnes of paddy is milled.

The agricultural department is forecasting a rice surplus of 535,870 million tonnes for 2019.

Sri Lanka’s large private milling companies have rice storage. It is not clear how much they have.

In 2015 a bumper harvest was also estimated to have produced a surplus and state rice purchasing agencies ran out of storage.

There is heavy state intervention in the paddy cultivation and price support, unlike other globally competitive farming sectors.

Unlike Sri Lanka’s tea, rubber, coconut and spice farmers who earn foreign exchange in export markets there is no export market for rice, partly because the island does not produce international traded grades of rice, prices have ket high and there is no trade historical trade links.

Several businesses export small volumes of rice into markets where expatriate Sri Lankans live.

Sri Lanka’s rupee has fallen in recent year’s and domestic prices have stayed the same, bringing prices more in line with global prices.

In a related development, Sri Lanka’s price control agency has blocked a wheat miller from raising flour prices after the rupee fell, which would have been a market response to increase balance demand.

In the past, Sri Lanka has kept wheat prices up artificially with import taxes increase profits of rice farmers, at the expense food consumers, in another misguided state intervention in the opposite direction instead of dealing with the key problem of producing a non-traded good. (Colombo/Sept18/2019)

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Sri Lanka shares debt management experience at global forum

ECONOMYNEXT – Sri Lanka has shared its experiences at a forum on debt management to “provide lessons for others”, State Minister of Finance Shehan Semasinghe has said.

Semasinghe spoke on “The Role of Debt Management in Navigating Crises” at the 14th Debt Management Facility (DMF) Stakeholders’ Forum, in Livingstone, Zambia.

“I shared the experiences of Sri Lanka which can provide valuable lessons for others and explored the critical elements of capacity building and sound institutional practices in managing debt, particularly in the context of economic challenges,” Semasinghe said on X (twitter).

“Sri Lanka’s experience demonstrates that effective debt management is not just about managing numbers but also about building robust institutions and capacities.”

The journey underscores the importance of transparent, accountable governance and the need for international support and cooperation in times of crisis, he said.

“Sri Lanka prioritized addressing gaps in public debt management by drafting a consolidated Public Debt Management Act, ensuring clarity and legal robustness and establishing a centralized Public Debt Management Office with operational autonomy.

“The role of debt management in navigating crises is multifaceted and critical. Further, by investing in capacity building, adhering to sound institutional practices, and strategically managing debt restructuring and liability operations, countries can better withstand economic shocks and pave the way for sustainable recovery.”

Developing countries face severe debt distress as they are more vulnerable to external shocks, Semasinghe said, and “managing global debt requires coordinated international efforts on debt restructuring where necessary, timely fiscal policy adaptation and help sustainable economic growth.”

The state minister also pointed out the financial impact of climate change was an emerging challenge, as countries need investment to mitigate and adapt to climate impacts, “especially through non-debt creating inflows, which would require private capital mobilization.” (Colombo/Jun20/2024)

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Sri Lanka rupee closes stronger at 305.10/30 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed stronger ahead of the long weekend at 305.10/30 to the US dollar on Thursday, up from 305.40/55 to the US dollar Wednesday, dealers said, while some bond yields edged up.

A bond maturing on 15.12.2026 closed at 10.45/80 percent, up from 10.35/75 percent.

A bond maturing on 01.07.2028 closed at 11.20/45 percent.

A bond maturing on 15.09.2029 closed at 12.00/15 percent, up from 11.95/12.35 percent.

A bond maturing on 01.12.2031 closed at 12.05/25 percent.

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Sri Lanka stocks close up, JKH trade pushes turnover

ECONOMYNEXT – The Colombo Stock Exchange closed up on Thursday, data on its site showed.

The broader All Share Index closed up 0.19 percent, or 23.11 points, at 12,249; while the more liquid S&P SL20 Index closed up 0.15 percent, or 5.33 points, at 3,610.

Turnover was 2 billion. Nearly half of this (Rs980mn) came from a crossing on John Keells Holdings Plc. The share closed down at 202.00.

“There were several crossings today which pushed turnover,” market participants said.

“Institutions and high net-worth activity drove the market, while the retail investors we feel are still about uncertain and adopting a wait-and-see approach.”

Melstacorp Plc was among the companies that saw active volumes (Rs194mn) in the day. The share closed up at 87.10.

Top contributors to the index included TeeJay Lanka Plc (up at 41.70), Sampath Bank Plc (up at 79.50), Hatton National Bank Plc (down at 201.00). Hayleys Plc (up at 105.00) and its subsidiary Hayleys Fabric Plc (up at 46.60) were also positive contributors. (Colombo/Jun20/2024)

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