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Tuesday May 21st, 2024

Sri Lanka projects rice surplus in 2023

ECONOMYNEXT – Sri Lanka is projecting a rice surplus in 2023 with the current Yala season expected to produce 1.74 million metric tonnes of paddy (rough rice), up from 1.46 million metric tonnes last year.

Sri Lanka has already had a successful main (Maha season) with 2.63 million metric tonnes of paddy, which will work out to about 1.65 million metric tonnes of milled rice after deducing seed paddy and wastage.

The Yala minor season is expected to produce 1.06 million metric tonnes of milled rice after deducing 0.08 million for seed paddy and 0.10 for wastage, Sri Lanka’s Department of Agriculture said in forecast.

The total production from the two seasons for 2023 was estimated 2.7 million metric tonnes.

Imports were 0.02 million metric tonnes.

Monthly rice consumption was estimated at 112.3 kilograms per year per person, working out to 211,930 metric tonnes per month or 2.54 million metric tonnes a year.

The rice surplus for 2023, would be 160,840 metric tonnes or about 3 weeks.

Unlike other crops where a surplus leads to a fall of the price to global levels triggering exports, rice is under import protection, with a politically powerful farmer and collector lobby.

Agriculture protection is continued in Sri Lanka, including maize which affects the price of protein, despite stunting and malnutrition of children.

Sri Lanka’s agriculture is recovering from a fertilizer and agro chemical ban by ex-president Gotabaya Rajapaksa based on claims made by macro-economists and doctors.

The Government Medical Officers Association said ancient Sri Lankans lived for 142 years before agro chemicals based on the writings of Roman author Pliny the Elder and life expectancy had now halved.

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Government macro economists also printed money and cut taxes and target an output gap, after the International Monetary Fund taught the country to calculate a ‘potential output’, triggering forex shortages.

In April 2021 government said Sri Lanka had spent 221 million dollars on importing agro-chemicals in 2019 and it could rise to 300 to 400 million dollars without a ban.

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Sri Lanka to ban import, use of fertilizer, agro-chemicals to save foreign exchange

Output gap targeting, which was included in a new International Monetary Fund backed monetary law is based on a belief propagated by so-called Western Cambridge-Saltwater economic ideology that a country’s growth can be promoted by money printing rather than hard work (Keynesian stimulus). (Colombo/July27/2023)

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Sri Lanka declares May 21 as National Mourning day over Iranian President’s death

ECONOMYNEXT – Sri Lanka declared a national mourning day on Tuesday, May 21 in view of expressing its solidarity with Iran after sudden death of Iran President Ebrahim Raisi following a helicopter crash.

President Raisi and eight others including Iranian Foreign Minister Hossein Amir Abdollahian were killed in the crash when the helicopter had a “hard landing” reportedly due to adverse weather conditions with heavy fog. However, President’s two convoy helicopters reached the destination safely.

“The Sri Lankan government has declared a national mourning day on tomorrow (May 21) on behalf of the sudden death of Iranian president Mr. Ebrahim Raisi,” the Department of Government Information said in a statement.

It also urged all the state institutions have to hoist the national flag half mast.

Raisi was in Sri Lanka on April 24 to launch the Uma Oya dam on a one-day official visit amid tight security. His helicopter crashed when he was returning to Iran after launching a dam in the Azerbaijan border.

President Raisi is seen as a hardliner and a potential successor to Supreme Leader Ayatollah Ali Khamenei.

Earlier this month, Sri Lanka’s Foreign Minister Ali Sabry said the island nation will deal with Iran for investments and trade without being caught into the United States-led sanctions.

Sri Lanka was unable to receive $450 million from Iran for a recently opened Uma Oya multipurpose project started before the sanctions.

Sri Lanka now exports tea to Iran for no dollar payment. Instead, Sri Lanka tea producers are paid by the state-owned Ceylon Petroleum Corporation (CPC) in rupees for the pending crude oil import payments for Iran.

President Ranil Wickremesinghe expressed his condolences on the tragic incident.

“Sri Lanka is deeply shocked and saddened by the tragic death of President Ebrahim Raisi, Foreign Minister Amir Abdollahian and other senior Irani official,” he said in his official X-platform.

“I express my deepest sympathies and sincere condolences to the bereaved families, the government and the people of Iran.”

Raisi, a Muslim jurist, served as the eighth president of Iran from 2021 until his death. (Colombo/May 20/2024)

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Sri Lanka helps launch Global Blended Finance Alliance

ECONOMYNEXT – Sri Lanka has joined a group of nations led by Indonesia which aims to mobilise capital to achieve carbon neutrality, Minister of Water Supply and Estate Infrastructure Jeevan Thondaman said.

The Global Blended Finance Alliance mooted by Indonesia in 2018, was formally launched at the World Water Forum in Bali today.

Among the other founding members are Fiji, France, UAE, Kenya, Luxembourg and Canada.

“Through our collective efforts, the Global Blended Finance Alliance aims to mobilise both public and private capital to help nations achieve carbon neutrality and the SDGs,” Thondaman said on social media platform X (twitter).

“The world has a USD 2.5 trillion funding gap to achieve the Sustainable Development Goals (SDGs) by 2030,” he said.

Blended finance is the strategic use of development finance, such as public and/or philanthropic funds, for the mobilisation of additional commercial finance towards sustainable development in developing countries. (Colombo/May20/2024)

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Sri Lanka rupee closes slightly stronger at 299.60/75 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee appreciated slightly to close at 299.60/75 to the US dollar on Friday, from 299.70/80 the previous week, dealers said. Bond yields were up.

A bond maturing on 15.12.2026 closed up at 10.15/35 percent from 10.05/15 percent.

A bond maturing on 15.09.2027 closed up at 10.45/55 percent from 10.25/40 percent.

A bond maturing on 01.07.2028 closed at 10.80/90 percent.

A bond maturing on 15.01.2030 closed at 11.70/80 percent.

A bond maturing on 01.10.2032 closed up at 11.90/12.05 percent from 11.85/12.00 percent. (Colombo/May20/2024)

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