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Sunday June 23rd, 2024

Sri Lanka’s new price controls on eggs could lead to shortages: poultry association

ECONOMYNEXT – Newly imposed maximum retail prices on eggs sold in crisis-hit Sri Lanka  may demotivate producers resulting in further shortages in poultry products in the market, the All Island Poultry Association said.

The association said on Saturday August 19 that farmers may stop raising new chicks for egg production due to higher costs.

On August 19, the Consumer Affairs Authority introduced new maximum retail prices for eggs effective immediately.

The maximum retail price for a white egg is now 43 rupees while for a brown/red egg it’s 45.00 rupees.

The demand for poultry products increased in the last two weeks with the country’s gas and fuel shortages being brought under control by the state owned suppliers and business picked up for restaurants and hotels.

With the increased demand and lack of supply, some customers have directly contacted farmers offering higher prices to secure supplies, resulting in further price hikes in the market.

However, with Sri Lanka’s forex shortage affecting animal feed importation, the production of eggs and meat has also dropped due to lack of nutrition packs given to animals in farms, Association President Ajith Gunasekera said speaking to EconomyNext on Saturday.

“We as an association are not involved in price controls of products.  However, this is a situation where farmers are also at a disadvantage due to the higher production costs incurred by them,” he said.

Around 50 percent of the small and medium farm owners have left the industry due to high production costs and low income, he added.

Gunasekara said due to insufficient nutrition combined with the inability to import animal feed, the production of eggs per week has gone down while the weight of a chicken that is produced for meat has also gone down.

“In my opinion, imposing a maximum retail price is not a positive solution at the moment,” he said.

The price ceiling came five days after Sri Lanka’s bakers and confectionery makers demanded government intervention to impose price controls on their suppliers such as egg farmers along with other raw materials needed for bakery products claiming that the price of bread and a bun could be brought down by at least 25 to 50 rupees if the government intervened.

However, egg prices continued to rise throughout the month due to lack of supply and high demand in the market.

“We thought even though production decreased, the situation can be controlled with substitutes coming into the market. Fish products were the best substitute, but due to production being hit by the fuel issue, fish products are too expensive and compared to that, poultry products still look cheaper,” said Gunasekara.

He said the association intervened and motivated farmers with the hope of getting the necessary poultry food to start production and asked parent farms to start raising chicks needed for egg and meat production two weeks ago.

Under normal circumstances, he said, it takes 21 days to hatch a chick, 35 days to produce chicken to the market and around five months to start egg production.

Gunasekara said, under the current circumstances, the production cost per egg is 49 rupees which is above the published retail prices.

“But with the price revisions we are informed that the farmers who placed orders for chicks are now rejecting it, due to higher cost,” he said.

“Now the parent farms are complaining that the chicks are here but no one wants to buy them and they’re forced to kill the chicks. With the demand expected to increase in the coming months with tourism and festival season coming in, there will bea  need for chicks again. It will take 21 days to hatch a chick, and around five months till it matures enough to lay eggs. So there will be another shortage going forward,” he said.

Gunasekara said the sudden decision by the authorities may have disrupted the system, which in turn may result in a severe shortage.

By securing just the required amount of animal feed and with the current stock of hens, the production of eggs can be improved by 10-15 percent, he said the authorities have been asked for a meeting to discuss and rethink the price controls.

The government has also focused on locally producing the raw materials needed for poultry food, he said.

A natural price control should come into play after increasing animal feed supply to improve production without resorting to sudden decisions to control prices, said Gunasekara.

“We as an association are asking to get the necessary poultry food for the farmers and come up with a system to safeguard the producers and the consumers and secure a quality product for the consumers,” he added. (Colombo/Aug20/2022)

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India supports Sri Lanka Coast Guard to boost maritime security

ECONOMYNEXT – India has given 1.2 million US dollars’ worth spare parts to Sri Lanka’s Coast Guard to be used in a vessel also gifted to the Indian Ocean Island on an earlier occasion, the Indian High Commission in Colombo said.

“Handing over of the large consignment of spares symbolizes India’s commitment to support capability building towards addressing the shared challenges of Maritime Security in the region,” the Indian High Commission said

The spare parts were brought to Sri Lanka on the Indian Coast Guard Ship Sachet, an offshore patrol vessel that was on a two-day visit to the island.

The spares were formally handed over to the Sri Lanka Coast Guard Ship Suraksha which was gifted to Sri Lanka in October 2017 by India.

India has gifted spare parts for the ship in June 2021 and April 2022 and also provided assistance in refilling of Halon cylinders in January 2024. (Colombo/June23/2024)

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Sri Lanka Water Board makes profits, tax-payers inject Rs28bn

ECONOMYNEXT – Sri Lanka’s state-run National Water Supply and Drainage Board has made a profit of 5.2 billion rupees in the year to December 2023, after a tariff increase despite not getting money for 25 percent of its water it pumps out.

Total revenues went up to 61.8 billion rupees in 2023 from 35.4 billion rupees, a Finance Ministry report said.

Water revenue surged to 58.5 billion rupees from 33.1 billion rupees, cost of sales also went up to 32.8 billion rupees from 23.14 billion rupees, helping boost gross profits from 12.3 billion rupees to 29.0 billion rupees.

Finance costs surged to 14.9 billion rupees from 3.9 billion rupees,

NSWD reported net profits of 5.2 billion rupees for the year, against a loss of 2.7 billion rupees a year earlier.

The Treasury had given 28 billion rupees from tax payer money to settle loans.

During the Rajapaksa administration, macroeconomists who ran the Finance Ministry made state enterprises borrow money from banks through Treasury guarantees listing them as ‘contingent liabilities’, claiming they were ‘off balance sheet’.

The Road Development Authority, which had no revenues to speak of borrowed large amounts of money from banks which were listed as ‘contingent liabilities’ though they were a responsibility of the state from day one, allowing macroeconomists to understate both the budget deficit and national debt, critics say.

The water tariffs were raised by 81 percent after macroeconomists printed money to supress interest rates for flexible inflation targeting/potential output targeting. The currency collapsed after macroeconomists tried to float the rupee with a surrender rule in place.

Non-revenue water for which no money is collected was 25.2 percent. The agency was supposed to reduce non-revenue water. In some districts religious establishments are responsible for non-revenue water, according to an official who said it on condition of anonymity.

The water board is also unable to collect money from some services like common toilets for underserved communities. (Colombo/June23/2024 – Update II)

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Sri Lanka will expedite Indian projects: President

ECONOMYNEXT – Sri Lanka will expedite Indian-backed projects in the island, President Ranil Wickremesinghe told Indian business people after a visit by Indian External Affairs Minister S Jaishankar this week.

“I discussed with Prime Minister Modi the need to accelerate the joint program that we have decided, agreed on. So the major ones are identified, and Foreign Minister Jaishankar came down today [20] to have a discussion. Now this will show the new path we are taking,” president Ranil Wickremesinghe said.

“It won’t be individual projects. We’ve discussed a fair number of them. First is the grid interconnection between Sri Lanka and India, so that sustainable energy can be transmitted to India.

“We have the Sampur solar power project, which is a Government to Government (G2G) project, and a three island project, which is where we hope the ground breaking can take place in July,” he told Indian business people at the 31st All India Partner’s Meet 2024 (AIPM 2024), held at ICT Ratnadipa in Colombo.

The AIPM 2024 which was organised by KPGM Sri Lanka and India provided a platform for both countries to reaffirm their commitment to collaborative projects that promise to redefine bilateral relations and propel socio-economic growth.

“It’s a great pleasure and a privilege to have you in Sri Lanka, in Colombo, holding this meeting. It shows on one hand the close friendship that our two countries have, and on the other hand, the confidence that you have in Sri Lanka.

“Having now survived two difficult years, I must acknowledge that this was possible because India gave us a loan of $3.5 billion. All that will be repaid.”

Cooperation between the two nations needed to be enhanced, particularly in the energy sector, aiming to foster new development for the Northern region, Wickremesinghe said.

“We are looking at developing Palk Straight for wind energy and solar energy, both countries to get together and have a large farm for solar energy, for renewable energy. It also means that we will have a new economy for the northern province, which was worst affected by the war.”

Several Indian-backed projects in Sri Lanka have stalled due to protests from some parties, with some going to courts.

India is helping expand the Kankesanturai port, and is discussing development of the Palali and Colombo airports.

The National Livestock Development Board of Sri Lanka, in collaboration with India’s Amul Dairy Company, is involved in a project to enhance liquid milk production in the country.

The two nations are also considering establishing land connectivity.

Discussions have also taken place regarding expediting the Trincomalee Development Project, which encompasses industrial investment zones and tourist areas.

“Plans are underway to construct a multi-product oil pipeline from Nagapatnam to Trincomalee, pending the final observation report. Trincomalee is poised to become a hub for oil refining, with the development of ports and investment zones, transforming Trincomalee Port into a significant hub on the Bay of Bengal.

“Today, the entire East Coast is being opened up for tourism, with additional land earmarked for hotels in Galle and southern areas. Moreover, there are plans to establish more investment zones across the country, alongside expanding our professional training programs. In these endeavours, we are collaborating closely with India.” (Colombo/Jun22/2024)

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