An Echelon Media Company
Tuesday November 29th, 2022

Sri Lanka’s Ceylon tea output down 16.3-pct in May 2022

Sri Lankan tea plucker

ECONOMYNEXT – Sri Lanka’s Ceylon Tea production was down 16.3 percent in May 2022 from a year earlier to 26.04 million kilograms while the total output for the first five months dipped 17 percent from the previous year, data shows.

In May high growth teas were down 15.97 percent to 6.3 million kilograms, medium grown was fell 19.83 percent to 4.7 million kilograms and low grown were down 15 percent to 14.8 million kilograms, industry data published by Forbes and Walkers Tea Brokers show.

“On a cumulative basis too, all elevations have shown a decline over the corresponding period of 2021,” industry data said.

Low grown teas, mostly grown by small holders and exported to the Middle East and Central Asia are the most sought-after and expensive Ceylon Teas now.

The national average tea price in the month of May was 3.69 dollars or 1,324.95 in rupees.

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.

However, the industry had previously predicted the tea output to dip following a fertiliser ban that was imposed in April to November 2021.

The ban was imposed on fertilizer and agrochemicals after money printing created forex shortages and over health concerns.

Sri Lanka’s Government Medical Officers Association, a key policy advisory group, had said according to the Roman author and natural philosopher Pliny the Elder, ancient Sri Lankans lived over 140 years and after agrochemicals, non-communicable diseases had worsened.

In the first five months of 2021, tea output was up 31.5 percent to 135.6 million kilograms. (Colombo/June26/2021)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka rubber farmers to get boost from France, Michellin

ECONOMYNEXT – Sri Lanka will start a project supported by France and Michellin group to support 6,000 rubber farmers, cabinet spokesman Minister Bandula Gunawardena said.

Rubber farmers in Badalgama and Medagama in the Moneragala district will be supported improve their capacity and supply chains at a cost of 726,700 Euros.

Financial support will be provided by France’s Michellin group which has a subsidiary in Sri Lanka and the government of France.

The project will be implemented by France’s Ksapa group under the guidance of Ministry of Industries.

The cabinet of ministers had cleared a proposal by the Plantations Industries Minister to enter into an agreement to implement the project. (Colombo/Nov29/2022)

Continue Reading

A new Sri Lanka monetary law may have prevented 2019 tax cuts?

ECONOMYNEXT – A new monetary law planned in 2019, if it had been enacted may have prevented the steep tax cuts made in that year which was followed by unprecedented money printing, ex-Central Bank Governor Indrajit Coomaraswamy said.

The bill for the central bank law was ready in 2019 but the then administration ran out of parliamentary time to enact it, he said.

Economists backing the new administration slashed taxes in December 2019 and placed price controls on Treasuries auctions bought new and maturing securities, claiming that there was a ‘persistent output gap’.

Coomaraswamy said he keeps wondering whether “someone sitting in the Treasury would have implemented those tax cuts” if the law had been enacted.

“We would never know,” he told an investor forum organized by CT CLSA Securities, a Colombo-based brokerage.

The new law however will sill allow open market operations under a highly discretionary ‘flexible’ inflation targeting regime.

A reserve collecting central bank which injects money to push down interest rates as domestic credit recovers triggers forex shortages.

The currency is then depreciated to cover the policy error through what is known as a ‘flexible exchange rate’ which is neither a clean float nor a hard peg.

From 2015 to 2019 two currency crises were triggered mainly through open market operations amid public opposition to direct purchases of Treasury bills, analysts have shown.

Sri Lanka’s central bank generally triggers currency crises in the second or third year of the credit cycle by purchasing maturing bills from existing holders (monetizing the gross financing requirement) as private loan demand pick up and not necessarily to monetize current year deficits, critics have pointed out.

Past deficits can be monetized as long as open market operations are permitted through outright purchases of bill in the hands of banks and other holders.

In Latin America central banks trigger currency crises mainly by their failure to roll-over sterilization securities. (Colombo/Nov29/2022)

Continue Reading

Sri Lanka cabinet clears CEB re-structure proposal: Minister

ECONOMYNEXT – Sri Lanka’s cabinet has cleared proposals by a committee to re-structure state-run Ceylon Electricity Board, Power and Energy Minister Kanchana Wijeskera said.

“Cabinet approval was granted today to the recommendations proposed by the committee on Restructuring CEB,” he said in a twitter.com message.

“The Electricity Reforms Bill will be drafted within a month to begin the unbundling process of CEB & work on a rapid timeline to get the approval of the Parliament needed.”

Sri Lanka’s Ceylon Electricity Board finances had been hit by failure to operate cost reflective tariffs and there are capacity shortfalls due to failure to implement planned generators in time. (Colombo/Nov28/2022)

Continue Reading