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Friday March 1st, 2024

Sri Lanka’s tea prices hit record in August

Monthly tea auction data 2022

ECONOMYNEXT – Sri Lanka’s low-grown Ceylon teas hit a new record of 1,161.24 rupees a kilogram in August 2022, up from 619 rupees a year earlier industry data showed, as the currency collapsed steeply following mistargeted interest rates and a botched float with a surrender requirement.

In the last week of August low growns averaged 4.39 dollars a kilogram up from 2.95 a year earlier. Global commodity prices have moved up due to US money printing, which tends to weaken the dollar.

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.

At the August 30 sale auction, Low Grown leafy/Tippy variety had seen an increased demand selling 1.7 million kilograms with strong demand.

Low Grown attract the highest prices for Ceylon Tea.

In the August 4th week auction, the Low Grown Tea sale average was 1,727.39 rupees, up from 1,654.03 rupees in the previous week.

In dollar terms, it had shot up to 4.78 dollars per kilogram, up from 4.58 dollars in the previous week.

BOPF’s Select best were lower whilst all others were firm.

OP’s Well-made varieties together with cleaner below best maintained. Bottom and others too followed a similar trend.

OPA’s well-made sorts together with cleaner below best followed a similar trend to their OP counterparts. Poorer types gained.

BOP1’s few Select best gained whilst others and below best were irregular. Teas at the lower end maintained.

FBOPF/FBOPF1’s Select best with best were dearer to last whilst others held firm. All tippy invoices were easier.

High Grown

The High Grown auction average was 1,422.56, down from 1,436.31 rupees.

In BOP, Best Westerns were firm. Below best and plainer teas were firm to Rs.50/- per kg dearer.

Nuwara Eliya’s were up by Rs.100/- per kg. Uda Pussellawa’s moved up by Rs.50/- per kg. Uva’s gained by Rs.100/- per kg and at times more.

In BOPF, Best Western’s were mostly firm. Below best and plainer types appreciated by Rs.50/- per kg.
Nuwara Eliya’s were barely steady. Uda Pussellawa’s Rs.50- per kg dearer. Uva’s gained by a similar margin.

Medium Grown

The Medium Grown auction average for the week was 1,234.18 rupees down from 1,135.53 rupees a week before.

This week, BOPF’s Select best and best were dearer by 50 rupees per kilogram whilst the all others were firm.

In BOP1, Select best were firm whilst all others dearer by Rs. 50/- per kg.

While OP1’s Select best, best and the below best declined by Rs.100/- per kg. Poorer sorts eased by Rs.50/- per kg.

In the PEKOE/PEKOE1 PEK category in general, appreciated by Rs. 50/- per kg while PEK1’s Select best and best increased by Rs. 100/- per kg whilst all others gained by Rs. 50/-
per kg.

In the FBOP category, Select best and best declined by Rs. 50/- per kg whilst all others were firm.

FBOPF1’s Select best, best and the below best dearer by Rs.100/- per kg. Poorer sorts eased by Rs.50/- per kg.

CTC

High-grown BP1s has had hardly any offerings while PF1’s firm to marginally dearer.

Mid grown BP1s were irregular.

Low-grown BPIs lower 50 rupees a kilogram, while better PF1 teas declined by 200 rupees per kilogram.
(Colombo/Sept11/2022)

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Sri Lanka’s RAMIS online tax collection system “not operatable”: IT Minister

ECONOMYNEXT – Sri Lanka’s online tax collection system RAMIS is “not operatable”, and the Ministry of Information Technology is ready to do for an independent audit to find the shortcomings, State IT Minister Kanaka Herath said.

The Revenue Administration Management Information System (RAMIS) was introduced to the Inland Revenue Department (IRD) when the island nation signed for its 16th International Monetary Fund (IMF) programme in 2016.

However, trade unions at the IRD protested the move, claiming that the system was malfunctioning despite billions being spent for it amid allegations that the new system was reducing the direct contacts between taxpayers and the IRD to reduce corruption.

The RAMIS had to be stopped after taxpayers faced massive penalties because of blunders made by heads of the IT division, computer operators and system errors at the IRD, government officials have said.

“The whole of Sri Lanka admits RAMIS is a failure. The annual fee is very high for that. This should be told in public,” Herath told reporters at a media briefing in Colombo on Thursday (29)

“In future, we want all the ministries to get the guidelines from our ministry when they go for ERP (Enterprise resource planning).”

President Ranil Wickremesinghe’s government said the RAMIS system will be operational from December last year.

However, the failure has delayed some tax collection which could have been paid via online.

“It is not under our ministry. It is under the finance ministry. We have no involvement with it, but still, it is not operatable,” Herath said.

“So, there are so many issues going on and I have no idea what the technical part of it. We can carry out an independent audit to find out the shortcomings of the software.”

Finance Ministry officials say IRD employees and trade unions had been resisting the RAMIS because it prevents direct interactions with taxpayers and possible bribes for defaulting or under paying taxes.

The crisis-hit island nation is struggling to boost its revenue in line with the target it has committed to the IMF in return for a 3 billion-dollar extended fund facility. (Colombo/Feb 29/2024) 

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Sri Lanka aims to boost SME with Sancharaka Udawa tourism expo

ECONOMYNEXT – Sri Lanka is hosting Sancharaka Udawa, a tourism industry exhibition which will bring together businesses ranging from hotels to travel agents and airlines, and will allow the small and medium sector build links with the rest of the industry, officials said.

There will be over 250 exhibitors, with the annual event held for the 11th time expected to draw around 10,000 visitors, the organizers said.

“SMEs play a big role, from homestays to under three-star categories,” Sri Lanka Tourism Promotion Bureau Chairman, Chalaka Gajabahu told reporters.

“It is very important that we develop those markets as well.”

The Sancharaka Udawa fair comes as the Indian Ocean island is experiencing a tourism revival.

Sri Lanka had welcomed 191,000 tourists up to February 25, compared to 107,639 in February 2023.

“We have been hitting back-to-back double centuries,” Gajabahu said. “January was over 200,000.”

The exhibition to be held on May 17-18, is organized by the Sri Lanka Association of Inbound Tour Operators.

It aims to establish a networking platform for small and medium sized service providers within the industry including the smallest sector.

“Homestays have been increasingly popular in areas such as Ella, Down South, Knuckles and Kandy,” SLAITO President, Nishad Wijethunga, said.

In the northern Jaffna peninsula, both domestic and international tourism was helping hotels.

A representative of the Northern Province Tourism Sector said that the Northern Province has 170 hotels, all of which have 60-70 percent occupancy.

Further, domestic airlines from Colombo to Palali and the inter-city train have been popular with local and international visitors, especially Indian tourists. (Colombo/Feb29/2024)

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Sri Lanka rupee closes at 309.50/70 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 309.50/70 to the US dollar Thursday, from 310.00/15 on Wednesday, dealers said.

Bond yields were slightly higher.

A bond maturing on 01.02.2026 closed at 10.50/70 percent down from 10.60/80 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.10 percent from 11.90/12.00 percent.

A bond maturing on 01.07.2028 closed at 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.30/45 percent up from 12.20/50 percent.

A bond maturing on 15.05.2030 closed at 12.35/50 percent up from 12.25/40 percent.

A bond maturing on 01.07.2032 closed at 12.55/13.00 percent up from 12.50/90 percent. (Colombo/Feb29/2024)

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