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Tuesday May 21st, 2024

Sri Lanka tea prices hit record in May amid currency collapse

ECONOMYNEXT – Sri Lanka’s low grown Ceylon teas hit a new record of 1,506 rupees a kilogram, up from 640 rupees a year earlier industry data showed, as the currency collapsed steeply following mis-targeted interest rates and a botched float with a surrender requirement.

In the last week of May low growns averaged 3.43 dollars a kilogram up from 2.43 a year earlier. Global commodity prices have moved up due to US money printing, which tends to weaken the dollar.

At June 07 auction low grown BOP1 grade from Brombil estate fetched 4,200 rupees a kilogram and Pothotuwa BOP1 fetched 4,400 rupees a kilo, Ceylon Tea Brokers data showed.

In Sri Lanka Mercantilists and soft-peggers usually claim that inflation comes from imported prices. However, prices of all traded goods, whether imported or exported go up when the central bank prints money to depreciate the currency.

Global prices also go up in dollar terms (commodity booms) when the US Federal Reserve prints money. At the moment commodity prices are booming due to the so-called ‘Powell Bubble’ the worst since the Greenspan-Bernanke bubble which broke in 2008/2009.

In US dollar terms the national sale average on May 31 was 3.69 dollars a kilogram compared to 3.18 last year.

At the June 07 sale auction, Low Grown gained, Ceylon Tea Brokers, a Colombo-based tea brokerage said.

Low Grown leafy/Tippy variety had seen an increased demand selling 2 million kilograms however in the previous week it sold 2.7 million kilograms.

The High Growns that saw higher demand in the previous week sold only 0.8 million kg compared to 1 million kg in the previous week.

Low Growns

Low Grown attract the highest prices for Ceylon Tea.

In the June 07 week auction, the Low Grown Tea sale average was 1,506.71 rupees, down from 1,538.90 rupees in the previous week.

However, in dollar terms, it had shot up to 4.2 dollars per kilogram, up from 3.6 dollars in the June 01 sale.

BOPF tea prices had eased.

OP and OPA Well-Well-made varieties were firm, whilst the balance and bottom were irregular.

Select best FBOP/FBOP1 were firm while others eased.

BOP Select Best and best gained while poorer sorts had eased.

High Grown

The High Grown auction average was 1,053.07, down from 1,098.64 rupees.

In BOP teas, few Best Western’s were dearer following quality. Balance was firm to 30 rupees per kg lower.

Below best were firm. Plainer types were irregular. Nuwara Eliya’s gained on last. Uda
Pussellawa’s tended dearer. Uva’s were firm.

In the BOPF category, Best Westerns declined 50-70 rupees a kilogram while Below Bests were irregularly easier. others gained to a lesser extent.

Medium Grown

The Medium Grown auction average for the week was 1,099.02 rupees down from 1,135.53 rupees a week before.

This week, BOPF’s Select best and best gained whilst the poorer sorts were firm.

In BOP1, Select the best together with the best & below best increased by 50 rupees per kilo. Poorer sorts declined by 50 rupees per kg.

While the OP1’s Select best were dearer by 50 rupees per kg. Best & below best gained by 100 rupees per kg whilst the
poorer sorts were firm.

In the PEKOE/PEKOE1 PEKOE category, Select best along with the below best moved up by 50 rupees per kilogram.

Teas in the best category improved by 100 rupees per kg whilst the poorer sorts shed by 50 rupees per kg.

PEK1’s Select best increased by 100 rupees per kg. Best and the below best gained by 50 rupees per kg
whilst the poorer sorts easier by 50 rupees per kg.

In the FBOP/FBOPF1’s Select best gained by 100 rupees per kg. Best and the Below Best gained by 30-50 rupees per kg whilst the poorer sorts dropped by 50 per kilogram

CTC

High-grown BP1s were firm while PF1 moved up by 20-30 rupees per kilogram.

Mid grown BP1s were lower while PF1s were easier by 30-50 rupees per kilogram.

Low-grown BPIs gained by 30-50 rupees a kilogram, while better PF1 teas lost around 100-150 rupees.
(Colombo/June 12/2022)

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  1. Elango says:

    Sri Lanka should consider exchanging tea with rice with Pakistan

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  1. Elango says:

    Sri Lanka should consider exchanging tea with rice with Pakistan

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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