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Tuesday February 7th, 2023

Sri Lanka tea prices arrest slide in low volumes

ECONOMYNEXT – Sri Lanka tea prices picked up at the second weekly auction in November amid low volumes, ending four straight weeks of falls, brokers said.

“Auction volumes declined and totaled 4.3 M/Kgs this week following the work stoppage on account of the Deepavali holidays during end October,” Forbes and Walker Tea Brokers said.

“The extremely low volumes on offer this week and its continuation over the next couple of weeks perhaps triggered the additional buying interest.”

High Growns picked up with BOP up 100 rupees and BOPF grade up around 50 rupees.

Last week the average low grown price was 1,401.30 rupees.

CTC High Growns fll to 942.20 rupees a kilogram from 1149.63 rupees.

Western High fell to 1,090.07 rupees per kilogram from 141.46 rupees, while Uva fell to 1,080.72 rupees per kilogram from 1163.22 rupees.

BOP’s best Westerns were dearer by 50-100 rupees per kg. Below best too followed a similar trend. Plainer types were firm to Rs.50/- per kg dearer.

Nuwara-Eliya’s were irregular. Uda Pussellawa’s moved up by 30 rupees per kg and more. Uva’s maintained.

BOPF’s best Westerns on offer appreciated by 50 rupees per kg and more. Below best were firm. Plainer types gained by 50 rupees per kg.

Medium growns picked up between 100 to 150 rupees a kilogram. Last week the medium grown avarges was 1,119.93 rupees a kilogram.

Low Growns

Low-grown teas, farmed mainly by smallholders and exported to the Middle East and Central Asia, are the most sought-after and expensive Ceylon Teas.

Low growns also fell to 1328.54, data released by Forbes and Walker showed.

Low-grown CTC prices have gained this week to. 945.32 per kilogram this week from 886.10 per kilogram last week.

Orthodox teas have slipped to 1,356.80 per kilogram from 1,454.56 per kilogram.

Few BOP well-made invoices were dearer whilst others held firm.

BOPF’s in general, are easier to market

FBOPF/FBOPF1’s select best invoices increased in value, whilst others held firm.

Selected best BOP1’s maintained, whilst best and below best were irregularly lower. Poorer types maintained. OP1’s Select best were marginally lower whilst best and below best declined.

Medium Growns

CTC medium-grown category fell to 815.25 rupees per kilogram from 989.68 rupees per kilogram.

Western medium was down from 1,087.37 rupees to 955.24 this week.

Uva teas fell to 1,139.62 rupees per kilogram.

BOPF’s in general, gained by 50 rupees per kilogram.

BOP1’s select best and best gained by 100 rupees per kg, whilst the below best and the plainer sorts moved up by Rs. 50/- per kg.

OP1’s select best and best dearer by 100 rupees per kg whilst the below best gained by 50 rupees per kg. Teas at the bottom maintained.

OP/OPA’s Select best and best declined by 50 rupees per kg whilst all others firm.

PEK’s in general, dearer by 50 rupees per kg and PEK1’s select best gained by 100 rupees per kg.

Sri Lankan tea has been earning higher prices for tea exports in rupees after the currency was depreciated in March against the USA dollar in 2022. (Colombo/Nov 20/2022)

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Sri Lanka Railways to seek PPPs to boost revenue streams

CURFEW RUSH: Commuters scrambling to get home after curfew was declared in Sri Lanka on March 20, 2020.

ECONOMYNEXT – Sri Lanka Railway department hopes to expand Public Private Partnerships and earn more non-passenger revenues to offset recurring operational costs, an official said.

“For the past 10 years, except the last few years, the Railway operational income only covers around 50 percent of the operational expense of the Department,” the General Manager of the Railway, D.S. Gunasinghe told EconomyNext.

“Our plan is to increase the non-passenger revenue of the Railway department.

“And we cannot expect and do not hope for money from the government.”

Sri Lanka Railways already has agreements with Prima, a food firm, and Insee Cement, which is bringing in additional income, Gunasinghe said.

“We had agreements for material transportation such as sand in the past, however it was canceled but we hope to start it again” he said.

The department will rent out its storage facilities and circuit bungalows for the tourism sector to create additional revenue streams.

Sri Lanka Railways recorded an operating loss of 10.3 billion rupees during 2021, compared to a loss of 10.1 billion rupees in 2020, the Central Bank 2021 annual report showed.

The total revenue of the SLR stood at 2.7 billion rupees, a 41.3 percent drop from a year ago.

(Colombo/ Feb 06/2023)

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Sri Lanka’s doctors distribute anti-tax hike leaflets to train commuters

ECONOMYNEXT – Doctors representing Sri Lanka’s Government Medical Officers Association (GMOA) distributed leaflets outside the Colombo Fort railway station against a progressive tax hike, threatening to address the government in a “language it speaks”.

GMOA Secretary Haritha Aluthge told reporters outside the busy Fort railway station Monday February 06 afternoon that all professional associations have collectively agreed to oppose the personal income tax hike.

“The government is taking a lethargic approach. They cannot keep doing this. They have a responsibility towards the citizens, the country and society,” said Aluthge.

The medical officer claimed that the government was acting arbitrarily (අත්තනෝමතික).

“If it cannot understand the language they’ve been speaking, if the government’s plan is to put all professionals out on the street, if it doesn’t present a solution, all professional unions have decided unanimously to address the government in a language it speaks, ,” he said.

Aluthge and other GMOA members were seen distributing leaflets to commuters leaving the railway station. Doctors in Sri Lanka in general are likely to earn higher salaries than the average train commuter, and a vast majority of Sri Lanka’s population, most of whom take public transport, don’t fall into the government’s new tax bracket. Many doctors, though certainly not all, collect substantial sums of money at the end of every month as doctor’s fees in private consultations.

About two miles away from the doctors, the Ceylon Blank Employees’ Union, too, engaged in a similar distribution leaflet campaign on Monday at the Maradana railway station. A spokesman promised “tough trade union” action if there was no solution offered by next week.

Sri Lanka’s cash-strapped government has imposed a Pay As You Earn (PAYE) tax on all Sri Lankans who earn an income above 100,000 rupees monthly, with the tax rate progressively increasing for higher earners, from 6 percent to 36 percent.

A person who paid a tax of 9,000 rupees on a 400,000 rupee monthly income will now have to pay 70,500 rupees as income tax, the latest data showed. This has triggered a growing wave of anti-government protests mostly organised by public sector trade unions and professional associations.

Even employees of Sri Lanka’s Central Bank recently joined a week-long “black protest” campaign organised by state sector unions against the sharp hike in personal income tax, even as Central Bank Governor Nandalal Weerasinghe said painful measures were needed for the country to recover from its worst currency crisis in decades.

The government, however, defends the tax hike arguing that it is starved for cash as Sri Lanka, still far from a complete recovery, is struggling to make even the most basic payments, to say nothing of the billions needed for public sector salaries.

Economists say Sri Lanka’s bloated public service is a burden for taxpayers in the best of times, and under the present circumstances, it is getting harder and harder to pay salaries and benefits.

Sri Lanka’s new tax regime has both its defenders and detractors. Critics who are opposed to progressive taxation say it serves as a disincentive to industry and capital which can otherwise be invested in growth and employment-generating business ventures. Instead, they call for a flat rate of taxation where everyone is taxed at the same rate, irrespective of income.

Others, however, contend that the new taxes only affect some 10-12 percent of the population and, given the country’s economic situation, is necessary, if not vital, at least for a year or two.

Critics of the protesting workers argue that most of the workers earn high salaries that most ordinary people can only dream of, and, they argue, though there may be some cases where breadwinners could be taxed more equitably, overall, Sri Lanka’s tax rates remain low and are not unfair.  (Colombo/Feb06/2023)

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Sri Lanka bond Yields end steady

ECONOMYNEXT – Sri Lanka’s bond yields closed steady on Monday, dealers said while a guidance peg for interbank transactions remained unchanged.

A bond maturing on 01.07.2025 closed at 32.15/30 percent, steady from Friday’s 32.05/10 percent.

A bond maturing on 01.05.2027 closed at 28.90/29.10, steady from Friday’s 28.90/20.05 percent.

The Central Bank’s guidance peg for interbank US dollar transactions appreciated by one cent to 361.96 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 370.35 rupees on Monday, data showed. (Colombo/Feb 06/2023)

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