By: Staff Writer

Colombo (LNW): In a dramatic underwater rescue efforts, Sri Lankan divers have recovered the remains of seven crew members from a Chinese fishing vessel that capsized in the central Indian Ocean recently.

Several countries, including Australia, India, Sri Lanka, Indonesia, the Maldives, and the Philippines, joined in rescue efforts for 39 missing crew members after the Chinese distant-water fishing vessel “Lupeng Yuanyu 028” capsized early last Tuesday, state-run CCTV reported.

The vessel is owned by Penglai Jinglu Fishery based in Shandong province. The company has yet to release a statement on the incident.

Of the 39 people that were originally on board – 17 Chinese crew members, 17 Indonesians and five from the Philippines – it was not immediately clear which crew members were found.

Sri Lankan divers found and recovered the remains in the cabin of the ship, CCTV reported according to the Chinese Ministry of Transport. The wrecked vessel continues to slowly drift eastward, CCTV said. 

According to state media, 13 ships are still in the vicinity of where the boat sank. CCTV footage last week showed high-powered marine radar on ships that were trying to locate the capsized vessel, while crew members were seen using visual equipment to pan sea waters to locate survivors.

Last Thursday, the Chinese foreign ministry said President Xi instructed that additional rescue forces be sent and that international maritime search assistance be coordinated.

China’s ambassador to Australia urged Canberra on Thursday to step up its rescue efforts to help locate the missing.

By: Staff Writer

Colombo (LNW): Sri Lanka’s private sector borrowing in April has been lacklustre due to prevalent high interest rate regime as well as downturn in the economy.

There is growing criticism over the high interest rate environment from private sector as well as micro and SMEs even though the Central Bank has maintained the stance that finance costs work out to less than 10% of the overall cost.

The CBSL has also insisted that the bigger factor high inflation needs to be reined in first before dealing with interest rate.

The months-long descent in credit to the private sector turned more pronounced in March as such credit reported a net de-growth of Rs.107.6 billion, nearly doubling from the Rs.57.6 billion contraction in February.

The larger decline in net credit to the private sector demonstrates that the economy was still in decline although it might have turned a corner and found some footing with the improvement in the foreign currency conditions at home and the deceleration in the consumer prices, CBSL claimed.

The first quarter financial reports of banks also mirrored the private credit conditions in the economy as almost all commercial banks reported de-growths in their loan books in the quarter ended March 31, 2023.

However, closer parsing of their earnings commentary hinted that bank CEOs were largely remaining cautiously optimistic of the back half of the year to bring them some growth.

Notwithstanding the contractions in their loan books, banks overall reported reasonably good financial performance, benefited out of the higher margins and relatively low impairments. The higher taxes took the shine away from the earnings from all lenders.

Private credit in the industry has been on a descent from around March last year after the economy came to an abrupt halt as it ran out of foreign currency. Consequently, banks tightened their credit standards to stonewall demand for loans from most individuals and businesses.

The rates went through the roof after Central Bank tightened monetary policy with a mega policy rate hike aimed at crushing demand for credit and thereby the consumption and production, all in the guise of bringing price stability.

As a result, banks saw their balance sheets contracting, liquidity getting tightened and capital levels challenged due to record loss provisions they had to provide for likely loan defaults and dollar bonds they held. While private loans slumped, the loans to the government from the banking system increased by Rs.97.2 billion in March and the credit to the public corporations declined by Rs.118.9 billion.

By: Staff Writer

Colombo (LNW): Sri Lanka is mulling measures to lure back Chinese tourists in a bid to alleviate an unprecedented debt crisis, its tourism minister said, as the South Asian nation tries to stabilise the economy.

The country is targeting half a million Chinese tourists in 2024, nearly double its pre-Covid visitor levels, tourism minister Harin Fernando said at a press briefing in Beijing on Monday.

Sri Lanka is mulling measures to lure back Chinese tourists in a bid to alleviate an unprecedented debt crisis, its tourism minister said, as the South Asian nation tries to stabilize the economy.

The country is targeting half a million Chinese tourists in 2024, nearly double its pre-Covid visitor levels, Tourism Minister Harin Fernando said at a press briefing in Beijing on Monday.

If each Chinese tourist spent $5,000 that could raise a figure comparable to the recent International Monetary Fund bailout, he said. “If you really look at it, tourism can get Sri Lanka out of this mess,” the minister added.

Sri Lanka clinched a $3 billion bailout loan from the IMF in March after six months of negotiations. It is still trying to reach a debt restructuring agreement that would help the release of the next round of funds. China has been an observer to those talks.

Paris Club members account for $4.8 billion, or more than 10% of Sri Lanka’s external debt, according to IMF data. That’s slightly higher than China, which stands at $4.5 billion, while India is owed $1.8 billion. Palitha Kohona, Sri Lanka’s ambassador to China, who was also at the event in Beijing, said bilateral debt talks were ongoing.

Fernando said he’d presented a plan to Sri Lanka’s government that included free tourist visas for Chinese travelers until November. “They can just walk into Sri Lanka with a Chinese passport,” he said.

The minister also said he was holding talks with Chinese carriers, including China Southern Airlines and Air China, asking them to increase the number of flights to Sri Lanka.

This month, carriers are operating 92 flights between the two countries, down from 174 in the same month in 2019, according to flight data provider Cirium.

Sri Lanka has battled its worst economic problems since independence in recent years, after protests over soaring inflation, food shortages and lengthy power cuts toppled the government. A series of deadly terror blasts in 2019 also hit tourism arrivals, along with the subsequent Covid pandemic.

Before all that, Sri Lanka saw some 266,000 Chinese arrivals in 2018, according to the Sri Lanka Tourism Development Authority. That fell sharply to 167,863 the following year, according to the authority. 

The return of Chinese tourists is considered essential to the rebound of global tourism, but outbound travel is still lagging pre-pandemic levels. More than half of Chinese travelers said they hadn’t set plans to go abroad this year in a survey published last month.

Colombo (LNW): Crisis-hit Sri Lanka has reportedly received an investment of about US$ 350 million (US$ 348 million) through renowned global petroleum producer Sinopec for its local operations, indicating the having of a potential impact on the island nation’s forex problem.

LNW came to learn of this information only a day after the announcement of Sri Lanka entering a contract agreement with the global petroleum producer for the importation, storage and sale of petroleum products in the country.

The contract agreement was inked between Secretary of the Ministry of Power and Energy M.P.D.U.K. Mapa Pathirana, and Managing Director of of the Fuel Production and Marketing Department of Sinopec Chen Chengmim, before President Ranil Wickremesinghe.

The reception of US$ 350 million for Sinopec operations may appear in the form of a grant for the crisis-hit island, making a considerable impact, analysts opined.

Colombo (LNW): The prices of laboratory tests for dengue, including dengue antigen testing and full blood count have risen, days after the health authorities warned of the emergence of a potential dengue epidemic in Sri Lanka.

Local news aggregators claim that the price of a dengue antigen test has soared up to about Rs. 1,200, and the price of a full blood count test, Rs. 400.

The situation may end up in people being reluctant to go for blood tests amidst the growing dengue crisis in the country, health officials warned.

Colombo (LNW): The entrance fees to Botanical gardens have been increased via a gazette notification issued by Tourism Minister Harin Fernando.

Accordingly, the entrance fee for local visitors will rise to Rs. 200 from Rs. 100, and for foreigners, to Rs. 3,000 from Rs. 2,000, per head.

The revision will be in effect from July 2023.

The revision has been made by the Minister under paragraph (c) of Sub section (1) of Section (3) of the Botanic Ordinance No. 31 of 1928, amended by Act No. 32 of 1973.

By: Staff Writer

Colombo (LNW): Faced with a deepening economic and humanitarian crisis, Sri Lanka called off an ill-conceived national experiment in organic agriculture in the latter part of 2022 is now experiencing the cascade effect imposing a nationwide chemical fertilizer ban ordering the country’s 2 million farmers to go organic back for agriculture as tea and rubber crops dip in 1Q 2023.

The country’s key agriculture crops tea, rubber and coconut have suffered contraction in the first quarter of this year in comparison to the corresponding period of 2022 reaffirming the continuous damage caused by the unprecedented policy of banning chemical fertilizer by the former ousted president Gotabaya Rajapaksa.

As per provisional data released by the Central Bank last week, in the first quarter of 2023 tea crop was down by 6.5% to 59.2 million kilos. Rubber production was down by 2.5% to 18.7 million kilos. Coconut production was down by 5.6% to 790.3 million nuts.

CBSL said the contraction “can be largely attributable to the lag effect of shortages of required fertilizer. “It said coconut production drop reflects the lag effects of dry weather conditions that prevailed during the corresponding quarter of 2022.

The negative start overall and continuity of decline in output for tea and rubber (coconut crop hit a record last year) have caused concern within the agriculture industry.

Analysts warned that the outcome makes economic recovery more challenging this year. The broader agriculture activities in 2022 contracted by 4.6% in 2022 in value-added terms, compared to the growth of 0.9% in 2021.

In terms of exports, the value of tea shipments in the 1Q of 2023 were up 9.6% to $ 314.3 million on account of favourable prices. Rubber exports however were down by 26% to $ 10.8 million and coconut exports were down by 28% to $ 75.8 million. Sri Lanka’s overall exports were down by 8% to $ 3 billion in 1Q of 2023.

Last year tea production dipped by 16% largely due to the lagged effect of acute shortages of fertilizers and agrochemicals domestically.

Production of high, medium, and low grown tea, which contributed to around 22%, 16%, and 62% of the total production, respectively, declined by 13.8%, 21.2%, and 15.4%, respectively, in 2022.

The average yield in the smallholder sector decreased to 1,193 kilograms per hectare, compared to 1,414 kilograms per hectare reported in 2021, registering a year-on-year decline of 15.6% in average yield.

Rubber production too suffered its second consecutive decline in 2022 by 7.8% to 70.9 million kilograms, largely driven by the combined effect of adverse weather conditions that prevailed in rubber growing areas, fertilizer shortages, and the spread of the Pestalotiopsis disease.

PMD: In a significant move to address Sri Lanka’s fuel supply challenges, a contract agreement was signed with Sinopec, a leading international petroleum company. The agreement, signed May (22), marks a crucial step in ensuring a steady and uninterrupted fuel supply for the nation.

The signing ceremony took place at the Presidential Secretariat, with representatives from both Sri Lanka and Sinopec in attendance.

Secretary of the Ministry of Power and Energy Mr. M.P.D.U.K. Mapa Pathirana and Mr. Chen Chengmin, Managing Director of Fuel Production and Marketing Department of Sinopec Company, signed the agreement in front of the President.

On the Sri Lanka side, the Secretary of the Ministry of Power and Energy, the Chairman & Managing Director of the Ceylon Petroleum Corporation, and the Chairman of the Ceylon Petroleum Storage Terminals Limited participated. From Sinopec, representatives from Sinopec Fuel Oil Lanka (Private) Limited, Sinopec Fuel Oil Sales Co. Ltd (People’s Republic of China), and Sinopec Fuel Oil (Singapore) Pte. Ltd. were present to formalize the agreement.

In response to the on-going foreign exchange crisis in Sri Lanka, the Ministry of Power and Energy has taken this decisive action to ensure an uninterrupted fuel supply to consumers. With the inability to provide sufficient foreign exchange for fuel shipments, the Ceylon Petroleum Corporation (CPC) and Lanka Indian Oil Company (LIOC) faced significant challenges.

To tackle this issue, the Ministry explored various strategies and one of them involved inviting Expression of Interests (EOIs) from reputable petroleum companies established in producing countries. The goal was to import, store, distribute, and sell Petroleum Products in predetermined Distribution Dealer operated Networks in Sri Lanka. The Cabinet of Ministers approved this initiative.

One of the key requirements for new retail suppliers entering the market was their ability to secure forex requirements without depending on the domestic banking sector. It was mandated that these companies source their own funds for fuel procurement through foreign sources, at least during the initial one-year period of operation.

After receiving EOIs, the companies that were shortlisted were invited to submit detailed proposals in response to a Request for Proposal (RFP) document. The Cabinet Appointed Special Committee (CASC) and the Technical Evaluation Committee (TEC) thoroughly scrutinized the proposals and recommended awarding contracts to the following companies, subject to negotiations:

M/s Sinopec Fuel Oil Lanka (Private) Limited, F5, Hambantota Maritime Center, Mirijjawila, Hambantota, Sri Lanka

M/s United Petroleum Pty Ltd, 600 Glenferrie Rd, Hawthorn, Victoria 3122, Australia

M/s RM Parks, 1061 N. Main St, Porterville, CA 93257, USA, in collaboration with Shell PLC

The Cabinet of Ministers, considering the recommendations made by the CASC and the Committee Appointed by the Cabinet, granted approval to award the contracts to the selected suppliers.

Sinopec, along with its affiliated companies, is set to commence operations in Sri Lanka within 45 days following the issuance of the license. This development brings hope for a more stable and reliable fuel supply, boosting the country’s energy sector and providing assurance to consumers.

Minister of Power and Energy Kanchana Wijesekera, State Ministers D.V. Chanaka, Indika Anuruddha, Shehan Semasingha, President’s Senior Advisor on National Security and Chief of Staff Sagala Ratnayake, President’s Secretary Saman Ekanayake, Central Bank Governor Dr. Nandalal Weerasinghe, Chinese Ambassador Qi Zhenhong and representatives of Sinopec Oil Lanka Pvt. Ltd, Sinopec China Pvt Ltd and Sinopec Singapore Pvt Ltd were present on this occasion.

Colombo (LNW): The overall headline inflation has dropped to 33.6 per cent in April 2023, revealed the National Consumer Price Index (NCPI) measured by the Department of Census and Statistics.

The inflation recorded for April 2023 has dropped in comparison to the 49.2 per cent recorded in the predecessor month.

Meanwhile, food inflation has also dropped to 27.1 per cent in April from the 42.3 per cent recorded in the month earlier.

Read the full report: http://www.statistics.gov.lk/WebReleases/NCPI_April_2023