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Tuesday January 31st, 2023

Sri Lanka to import organic fertilizer for 1.1mn hectares of farmland

ECONOMYNEXT – Sri Lanka is planning to import organic fertilizer for 500,000 hectres of paddy land and 600,000 hectares of other crops for the next main cropping season, following a ban on chemical fertilizer the government said.

Authorities have said chemical fertilizer was banned to reduce negative health effects and save 400 million dollar a year spent on imports.

The cabinet of ministers had given the nod for state fertilizer companies to call international bids to import enough organic fertilizer for 500,000 hectares of paddy for the 2021/22 Maha cultivation season. Usually about 800,000 hectares of paddy are sown in the season.

The fertilizer would be distributed through the Department of Agrarian Services.

For 600,000 hectares of other crops licensed suppliers will be allowed to import organic fertilizer as recommended by the research institute dealing with the crop.

For ornamental plans, cut flowers and soil-less agriculture, identified specialist fertilizer would allowed through a licensing system.

The sudden ban on chemical fertilizer came through Sri Lanka’s mid-night gazette just as some enterprising individuals were moving into soil-less agriculture and hydroponics.

The ban came after the mis-use of fertilizer which was given free after 2005 to fulfill Sri Lanka’s ‘policy-by-manifesto’ system of regime uncertainty.

Critics say the subsidized fertilizer discouraged modern advances in fertilizer from reaching the country and also the use micro-nutrients which is in widespread use in East Asia and advanced nations.

However under the current plan micro-nutrients would be allowed.

A special procurement committee would be set up for organic fertilizer and chelated plant micro-nutrients along with a special advisory committee.

The statement said out of 27 licensed domestic organic fertilizer producers, 10 could supply enough fertilizer for 224,000 hectares and farmers themselves would supply organic fertilizer for anoher 100,000 hectares.

Concerns have been raised that Sri Lanka’s agricultural output would fall sharply with the use of organic fertilizer whose quality varies more widely than chemical fertilizer and it is tricky to use them to good effect in all crops.

Experts have called for quality controls of chemical fertilizer and modern methods of chemical fertilizer application which minimizes use, run off and boosts output.

True organic fertilizer are much more expensive and need to applied in large quantities.

“To be certified organic, most inputs should come from certified organic sources, which further limits sources and makes them even more expensive,” Ranil Waliwitiya, a Sri Lankan-born Canadian who run a fertilizer tech company has said.

“As an example, conventional urea with 46 percent nitrogen can be bought at USD0.88 per 1 kg while an organic plant-based product with 12 percent nitrogen (this is the highest percentage of plant-based organic nitrogen available) is about USD12.00 per 1 kg.

“Therefore to get the same percentage of nitrogen in urea, you have to spend nearly USD50.00 if going with organics. In this case, it is 50 times more expensive to choose organic nitrogen. ”
Organic fertilizer could also has dangerous residues.

“Unlike conventional fertilizers, organic fertilizers can contain many unknown compounds which may accumulate in soil and plants and cause detrimental plant growth and human health issues,” he explained.

“As they comprise of many different sources and available mainly as solids, it may not be possible to correct nutrient deficiencies quickly in an organic setting. These compounds have poor solubility.”

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Sri Lanka shares down for 2nd day as tax hike, delay in Chinese debt assurance weigh

ECONOMYNEXT – Sri Lanka’s shares edged down on Tuesday as worries over delay in financial assurances from China which is mandatory for a $2.9 billion dollar IMF loan and rise in protests against tax hike kept investors in check, analysts said.

The main All Share Price Index (ASPI) edged down by 0.28 percent or 24.62 points to 8,865.05. It fell for the second session after hitting more than three-month high.

“The market is looking for more macro cues because of faster Chinese debt assurance was expected. The market is also hit by fall in corporate earnings due to high taxes,” an analyst said.

China has given an initial response on debt re-structuring to Sri Lanka though analysts familiar with the process say it is not a ‘hard assurance’ sufficient for the IMF program to go through.

The International Monetary Fund is working with China on extending maturities of Chinese loans to defaulted countries like Sri Lanka, as there is resistance to hair-cuts, Managing Director Kristalina Georgieva told reporters on January 14.
The earnings for first quarter are expected to be negative for many corporates with higher taxes and rising costs. However, investors had not expected earnings to be low in the December quarter because of year end pick ups on heavy counters, the analyst said.
Earnings in the second quarter of 2023 are expected to be more positive with the anticipation of IMF loan and possible reduction in the market interest rates as the tax revenue has started to generate funds.

However, the central bank said the IMF deal is likely in the first quarter or in the first month of the second quarter.

The most liquid index S&P SL20 dropped by 0.64 percent or 17.74 points to 2,764.51 points.

The central bank has said it could cut interest rates in future when the country sees fall in inflation, which has already started decelerating.

The market saw a turnover of 1.7 billion rupees, slightly lower than the month’s daily average of 1.8 billion rupees and while being significantly lower than 2022’s daily average turnover of 2.9 billion rupees.

The bourse saw a net foreign inflow (NFI) of 93 million rupees extending the net offshore buying to 413 million rupees so far this year.

Top losers were LOLC, Royal Ceramics Limited and Hayleys. (Colombo/Jan31/2023)

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Sri Lanka exports fall in December as global recession weighs

ECONOMYNEXT – Sri Lanka’s merchandise exports earnings fell 9.7 percent in December year-on-year as the island nation saw a drop in buying from its key export destinations which are facing a looming recession after the Russia-Ukraine war.

The earnings from the merchandise exports recorded $1.04 billion  in December 2022 compared to the same month in the previous year as per the data released by the Sri Lanka Customs.

“This was mainly due to the decrease in export earnings from Apparel & Textiles, Tea, Rubber based Products, and Coconut based Products, Food & Beverages, Spices & Essential Oils and Fisheries products,” the Export Development Board (EDB) said in a statement.

“The reason for this decline was due to the ongoing recession in major markets due to rising cost of production, energy etc. Imports declined sharply due to inflation and demand for goods and services are reduced.”

However, Sri Lanka saw a record export earning of $13.1 billion in 2022 due to increased demand in the key exports throughout the year

Earnings from all major product sectors except Electrical & Electronic components as well as Diamonds, Gems & Jewellery fell in December.

Exports of Apparel & Textiles decreased by 9.6 percent to $480.3 million in December 2022.  Export earnings from Tea fell by 3 percent to $107.3 million, Rubber and Rubber Finished products dropped 20.3 percent to $74.5 million,

However, export earnings from the Electrical & Electronics Components increased by 16.18 percent to $42.9 million in December 2022, while Diamond, Gems & Jewelry jumped 35.7 percent to $30.8 million. (Colombo/Jan31/2023)

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Sri Lanka records over 6,000 dengue cases in first three weeks of January

ECONOMYNEXT – Sri Lanka recorded over than 6,000 dengue cases in the first three weeks of January 2023 after a spell of heavy monsoon rain though a drop in cases is likely from February, officials said.

Health officials identified 6,204 dengue patients by January 22, up from 5,793 recorded in the corresponding period last year.

“A rise in cases can be observed in the November-January period with the heavy rain due to the northeast monsoon,” an official from the National Dengue Control Unit told EconomyNext.

Of all reported cases, 46.3 percent were from the Western Province, official reports showed.

Akuressa, Batticaloa, Eravur, Trincomalee, Madampe, Badulla, Eheliyagoda, Kegalle, Kalmunai North and Alayadivembu MOH areas were identified as high-risk areas for dengue during the third week of January by the health officials.

“We are expecting a decline in dengue cases soon. The Western province is always in the top position with the highest number of dengue cases. Apart from that, we are seeing a higher number of cases during this period in areas like Puttalam, Jaffna districts. A certain number of cases have also been recorded in the Kandy district,” the official said.

“Usually the cases peak in December, but they decline by February. This year, too, we are facing this scenario. There is an increase of dengue during the months of November, December and January”.

Due to the economic situation in the country, the Public Health Inspectors (PHIs) in an earlier report said, diesel and pesticides are not being provided by the ministry.

However, rejecting the allegation, the official from the NDCU said the government has provided enough funds for get the necessary pesticides but it is being used according to a scientific method to avoid building a resistance in the dengue mosquito.

“The recommendation is to do the fogging if there is a dengue outbreak or if there are few patients reported from the same locality.

“If you use this pesticide haphazardly, the mosquitos will develop resistance against it,” the official said, adding that there are adequate stocks of the chemical available. (Colombo/ Jan 31/2023)

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