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Thursday June 20th, 2024

Sri Lanka rupee appreciation drives Ceylon Tea prices down

ECONOMYNEXT – Sri Lanka’s Ceylon tea prices fell 100 to 200 rupees at an auction on March 08 due to rupee strengthening steeply, amidst good demand, brokers said.

Prices of all High, Medium and Low Growns saw fell this week.

Falling tea prices, which are accompanied by falling, wheat, sugar and food prices will reduce the demand for higher wages from workers, though it may reduce profits.

Tea firms have not yet hiked wages after the central printed money, depreciated to rupee and pushed up food prices.

When currencies fall, the prices of all traded goods inflate, not just imports.

Total auction volume was 5.2 million kilograms and there was good general demand, Ceylon Tea brokers said in a report.

The weekly sale average fell from 1471.03 rupees to 1267.07 rupees from a week ago, according to data.

“At the commencement of the sale, large volumes of tea were unsold with bids realised being significantly below the percentage appreciation of the Sri Lankan Rupee,” Forbes and Walker said.

“As the sale progressed some degree of stability was reached although rupee prices, on average, recorded a decline of 200-300 rupees per kg and on the higher selling grades, perhaps up to 300-400 rupees per kg vis-à-vis the previous week’s levels,

“The total unsold volumes would perhaps be in the region of approximately 15-20 percent”.

High Growns

The High Grown sale average was down by 164.93 rupees to 1,275.12 from 1,440.05 rupees last week, Ceylon Tea Brokers said.

BP 1 was down by 100 rupees.

BOP and PF1 were down by 200 rupees while BOPF was down by 300 rupees per kilogram.

“Ex-Estate offerings totalled 0.72 million kilos up from the 0.65 million kilos of the previous week,” Forbes and Walker said

“Good demand though prices took a dip following the strengthening of the Sri Lankan Rupee”.

Well-made OP/OPA’s declined sharply, whilst teas at the lower end too fell.

A limited selection of Flavory PEK’s that were available were irregularly went down.

Orthodox leafy PEK’s in general were down by 100-200 rupees per kilo, whilst PEK1′ in general were down by 200 – 300 rupees per kg.

Best Rotavane PEK’s went down by 100 rupees per kilo and more. Others declined to a lesser extent.

Low Growns

In Low Grown Teas, OP1 and OP/OPA were down by 150 rupees.

BOP 1 was down by 175 rupees while PEK was down by 200 rupees.

The Low Growns sale average was down 229.95 rupees to 1296.98 rupees last week.

Low Growns comprised of 2.4 million kilograms.

“Leafy/Semi Leafy and Small Leaf categories met with lower demand and prices declined further as the sale progressed,” Forbes and Walker said.

In the Leafy and Semi Leafy catalogues, few select OP1’s were firm, whilst the balance declined sharply.

In PEKOE/PEKOE1 select best teas together with full range of bold PEKs declined.

Cleaner below best and the rest were irregular while in FBOP/FBOP1 select best and best had a sharp decline whilst others had a lower market, Ceylon tea brokers said.

Medium Growns

Medium Grown FBOP and PEK 1 were down by 250 rupees while FBOPF1 and OP1 were down by 200 rupees.

The Medium Growns sale average was down by 153.36 rupees to 1,109.89 rupees last week.

BOP1 was down by 100 rupees per kilo whilst others fell by 150 rupees.

In OP1 select best fell by 100 rupees per kilo whilst others lower by200 rupees.

In OP/OPA select best and best were down by 200 rupees per kilo whilst below best others fell by 150 rupees. (Colombo/Mar 12/2023)

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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.
(Colombo/Jun20/2024)

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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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