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Thursday June 20th, 2024

UN Food Programme, FOA warn of a Sri Lanka food ‘shortage’

Sri Lanka had been expecting its worst food crisis in August this year.

ECONOMYNEXT – The Food and Agriculture Organisation (FAO) of the United Nations (UN) and the UN World Food Programme (WFP) has warned Sri Lanka of an acute food shortage due to bad harvest seasons and called for immediate food assistance and livelihood programmes.

In a new report, the FAO and WFP estimate 6.3 million Sri Lankans are facing moderate to severe acute food insecurity due to a 50 percent drop in food grains and a decrease in imports due to foreign exchange shortage.

The organisations expect the situation to worsen mainly during October 2022 to February 2023 if immediate livelihood and life-saving assistance is not provided.

“In order to avert a further deterioration of food security conditions and to support restoration of agricultural production, livelihood assistance targeting smallholder farmers should remain a priority,” Vimlendra Sharan, FAO Representative in Sri Lanka, said in a statement.

“With around 30 percent of the population depending on agriculture, improving the production capacity of farmers will ultimately boost the resilience of the agricultural sector, reduce import requirements amid shortages of foreign currency reserves and avert the rise in hunger.”

However the warning came as farmers complained that farmgate prices were dropping to 100 rupees a kilogram lower than the expected 120 rupees due to a better than expected harvest.

The report has found that the paddy production for 2022 is forecast at 3 million metric tons.

“The lowest level since the 2017 drought-affected harvest, mostly due to low yields following reduced application of fertilizers,” the report noted.

“Months into this crippling economic crisis, families are running out of options – they are exhausted,” Abdur Rahim Siddiqui, WFP Representative and Country Director in Sri Lanka, said.

Siddiqui said more than 60 percent of families are eating less, and eating cheaper, less nutritious food.

“This comes at a time when financial constraints have forced the government to scale back on nutrition programmes, such as school meals and fortified food to mothers and undernourished children,” Siddiqui said.

He added that WFP’s top priority will be to provide immediate food and nutrition assistance to the most at-risk communities to prevent a further deterioration of their nutrition. (Colombo/Sep14/2022)

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Sri Lanka shares debt management experience at global forum

ECONOMYNEXT – Sri Lanka has shared its experiences at a forum on debt management to “provide lessons for others”, State Minister of Finance Shehan Semasinghe has said.

Semasinghe spoke on “The Role of Debt Management in Navigating Crises” at the 14th Debt Management Facility (DMF) Stakeholders’ Forum, in Livingstone, Zambia.

“I shared the experiences of Sri Lanka which can provide valuable lessons for others and explored the critical elements of capacity building and sound institutional practices in managing debt, particularly in the context of economic challenges,” Semasinghe said on X (twitter).

“Sri Lanka’s experience demonstrates that effective debt management is not just about managing numbers but also about building robust institutions and capacities.”

The journey underscores the importance of transparent, accountable governance and the need for international support and cooperation in times of crisis, he said.

“Sri Lanka prioritized addressing gaps in public debt management by drafting a consolidated Public Debt Management Act, ensuring clarity and legal robustness and establishing a centralized Public Debt Management Office with operational autonomy.

“The role of debt management in navigating crises is multifaceted and critical. Further, by investing in capacity building, adhering to sound institutional practices, and strategically managing debt restructuring and liability operations, countries can better withstand economic shocks and pave the way for sustainable recovery.”

Developing countries face severe debt distress as they are more vulnerable to external shocks, Semasinghe said, and “managing global debt requires coordinated international efforts on debt restructuring where necessary, timely fiscal policy adaptation and help sustainable economic growth.”

The state minister also pointed out the financial impact of climate change was an emerging challenge, as countries need investment to mitigate and adapt to climate impacts, “especially through non-debt creating inflows, which would require private capital mobilization.” (Colombo/Jun20/2024)

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Sri Lanka rupee closes stronger at 305.10/30 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed stronger ahead of the long weekend at 305.10/30 to the US dollar on Thursday, up from 305.40/55 to the US dollar Wednesday, dealers said, while some bond yields edged up.

A bond maturing on 15.12.2026 closed at 10.45/80 percent, up from 10.35/75 percent.

A bond maturing on 01.07.2028 closed at 11.20/45 percent.

A bond maturing on 15.09.2029 closed at 12.00/15 percent, up from 11.95/12.35 percent.

A bond maturing on 01.12.2031 closed at 12.05/25 percent.
(Colombo/Jun20/2024)

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Sri Lanka stocks close up, JKH trade pushes turnover

ECONOMYNEXT – The Colombo Stock Exchange closed up on Thursday, data on its site showed.

The broader All Share Index closed up 0.19 percent, or 23.11 points, at 12,249; while the more liquid S&P SL20 Index closed up 0.15 percent, or 5.33 points, at 3,610.

Turnover was 2 billion. Nearly half of this (Rs980mn) came from a crossing on John Keells Holdings Plc. The share closed down at 202.00.

“There were several crossings today which pushed turnover,” market participants said.

“Institutions and high net-worth activity drove the market, while the retail investors we feel are still about uncertain and adopting a wait-and-see approach.”

Melstacorp Plc was among the companies that saw active volumes (Rs194mn) in the day. The share closed up at 87.10.

Top contributors to the index included TeeJay Lanka Plc (up at 41.70), Sampath Bank Plc (up at 79.50), Hatton National Bank Plc (down at 201.00). Hayleys Plc (up at 105.00) and its subsidiary Hayleys Fabric Plc (up at 46.60) were also positive contributors. (Colombo/Jun20/2024)

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