Sri Lanka’s tea exports in value in the first seven months of this year have hit an all-time high on lower volume, industry sources said.

The country earned the highest ever Rs. 206 billion between January and July 2022 up by a massive 37% from the corresponding period of last year.

Whilst depreciation of the rupee played a significant part, Asia Siyaka Commodities said that the dollar average FOB per kilo in July was a high $ 5.16 per kg, In the first seven months it was $ 4.69 per kilo, marginally down from $ 4.71 per kilo a year ago.

Higher value is being fetched on low crop. Customs data analysed by Siyaka Research also confirmed tea exports of 22.7 million kg in July, down 2.7 million kg from last year. Asia Siyaka said the 2022 July figure was the lowest on record in recent history going back to 1999. 23 years ago, the country shipped 22.8 million kg with total exports for that year reaching 269 million kg.

Volume of tea exports in the first seven months of 2022 amounted to 148 million kg, down by 9% from a year earlier. “The cumulative total too is lowest on record in relation to increased tea production which led to Sri Lanka’s exports rising to 300 million kg for the first time in 2004,” Asia Siyaka recalled.

Iraq continues as the prime destination for Ceylon Tea exports, with absorption of 27.9 million kg, up by a sharp 35% from a year ago. The average FOB per kilo however is a low $ 3.31, compared with the national total of $ 4.69.

The UAE followed with 12.7 million kg up 5% with a FOB of $ 4.77 per kilo. Asia Siyaka said Russia’s poor performance continues with quantities dropping to 12.3 million kg from 15.8 million kg a year ago and a low FOB of $ 4.38 per kg.

Exports to Turkey were down by 58% to 8.2 million kg whilst purchases by Iran remained steady at 7.5 million kg and followed by Azerbaijan 7.3 million kg up from 6.9 million kg. Libya’s imports have increased by 8% to 6.9 million kg in the first seven month. China’s purchases were down by 22% to 6.5 million kg.

Germany has increased purchases by 21% to 4.4 million kg and imports by Saudi Arabia were up by 7% to 3.7 million kg. Shipments to Syria were down to 4.8 million kg from 3.5 million kg. Japan makes up the top fifteen destinations with imports of 3 million kg, but down by 13%. Japan FOB per kilo is a high $ 5.54 but less than last year’s January-July figure of $ 5.66 per kilo.

Sri Lanka’s tea crop in July plunged to a 21-year low of 19.8 million kg. Citing Sri Lanka Tea Board preliminary data, Asia Siyaka said July 2022 crop also reflects a 25% drop from a year ago. The lowest crop on record for July was in 2001 at 19.5 million kg.

Crop for the first seven months was 153 million kg, down by 18.6% from the corresponding period of last year. “This loss of 35 million kg has come primarily from the Low country which has declined 20 million kg to 92.4 million kg for the period January – July 2022 compared with 112.7 million kg last year,” Asia Siyaka said.

It added that the high grown crop was down 16% to 35.5 million kg from 42.4 million kg last year and Mediums dropped 23% to 25 million kg from 32.9 million kg by end July 2021.

As Sri Lanka struggles under the weight of the ongoing economic crisis with power outages, shortages and price increases of essentials, the Joint Apparel Association Forum welcomes the call to action by the Ethical Trading Initiative (ETI) and the American Apparel and Footwear Association (AAFA) to support the apparel sector’s efforts towards ensuring worker welfare.

ETI has commenced a collective response by engaging with economists, industry associations, worker representatives, and member companies operating in Sri Lanka to better understand the implications of the ongoing crisis on workers, suppliers, and the industry at large.

Distribution of dry rations, medicines, groceries, and cooked food has been taken as an initial step in support. Additionally, AAFA has pledged a commitment to work with suppliers ensuring timely payments and adherence to the law.

The livelihoods and welfare of workers remain a top priority of the industry. JAAF welcomes this collective support as it will enhance and compliment worker welfare measures already taken by the industry during these unprecedented times.

Welfare schemes by some factories have been in operation for the distribution of dry rations, with certain factories providing additional meals to employees to take home to feed their families. Provision of schoolbooks for children, free medical facilities, and special food packages for pregnant women have also been made available for employees in the SME sector.

JAAF Secretary General Yohan Lawrence said: “Factories are encouraged to implement welfare measures to best suit the requirements of their workers. As of June 2022, around 80% of apparel manufacturers have made cost of living adjustments to salaries over and above the annual increments. In some instances, these represent increases of 25% from 2021.”

This initiative by representatives of the international brands sourcing from Sri Lanka shows the deep relationship that brands have with their supplier partners in Sri Lanka built over a number of years.

JAAF commends the resilience of companies to continue operations and production under such challenging times, while ensuring the welfare of workers. Further, JAAF appreciates the support extended by the ETI and AAFA and renders full backing for their efforts in assisting the industry.

Enhancing bilateral trade and promoting Sri Lanka as a dynamic base for UK-based businesses will be among the main areas the Ceylon Chamber’s Council for Business with Britain (CBB) will focus on over the next year, stated CBB President Tania Polonowita Wettimuny at the Council’s AGM recently.

Taking on the mantle of leadership for the year 2022/23, Wettimuny stressed the ‘importance of creating long-term sustainable economic reforms’ and the role that organisations such as the CBB have to play in supporting economic recovery.

Highlighting that the UK is the second largest market for Sri Lanka in terms of apparel and software, and the second largest source market for tourism so far this year, she added that ‘it is of paramount importance that we continue to nurture this market and build on it for future trade and FDI, by fostering business on both sides and building on the trade corridor’.

UK High Commissioner to Sri Lanka Sarah Hulton thanked the CBB for its submission to the public consultation for the UK’s recently announced Developing Countries Trading Scheme, which will benefit Sri Lankan exports, and expressed the UK’s commitment to strengthening bilateral ties by supporting existing partnerships and facilitating collaboration in new sectors such as green technology.

The Guest of Honour, Export Development Board Chairman Suresh De Mel addressed the audience on the new initiatives of the EDB to support export trade and develop trade partnerships through the current economic challenges.

Governor of the Central Bank of Sri Lanka, delivering the keynote address expressed confidence that once a Staff-Level Agreement is reached with the International Monetary Fund (IMF) by the end of the month, it would enable a clearer picture of debt sustainability and debt targets for Sri Lanka to achieve in the next 10 years.

He added that once Sri Lanka unveils a macro-economic programme in the medium to long-term, along with structural reforms, endorsed by the IMF, this would ensure significant credibility and encourage creditors to support Sri Lanka in its efforts to ensure debt-sustainability.

The 2022/23 executive committee comprises Vice Presidents Shirendra Lawrence – MAS Holdings Ltd. and Ameena Ziauddin, Development Director, Norfolk Foods Ltd., Treasurer, Irfan Thassim – Oceanpick, and Immediate Past President, Roshanie J. Moraes – Link Natural Ltd.

Unilever Sri Lanka Chairperson Hajar Alafifi, Hayleys PLC Director Sarath Ganegoda, Commercial Bank MD Sanath Manatunge, London Stock Exchange Group SL Chief Financial Officer and Head of Finance Centre of Excellence for Sri Lanka Fadhil Jiffry, Finlays Group SL, MD Gihan Jayasinghe, De La Rue Director and Plant Manager, Sri Lanka Currency Derek Mansfield, Hilton Colombo Residences General Manager Karim Schadlou, The Hongkong and Shanghai Banking Corporation Ltd. Chief Executive Officer Sri Lanka and Maldives Mark Surgenor, Hirdaramani Group Director Nikhil Hirdaramani, and KPMG Principal – Deal Advisory Shiluka Gunawardena, were also appointed as Members of the Committee.

The finance ministry’s ban on the import of over 300 items temporarily along with the debt default on the directions of Central Bank Governor Nandalal Weerasinghe is set to boomerang on the government pushing millions of micro businessmen and women as well as small scale industrialists into doldrums.

This will create another wave of people’s uprising with street fights of affected people while the Finance Ministry and Central Bank officials headed by Nandalal Weerasinghe will wait without taking the responsibility putting the blame on the president , several public interest activists said.

The import of over 300 items has been temporarily suspended with effect from Tuesday under the Imports and Exports (Control) Act through a Government notification by the Finance Ministry.

The host of items included in the list range from chocolate and other food preparations containing cocoa, condensed milk, yoghurt, coconuts, coconut based arrack, roses, perfumes, beauty or make-up preparations, deodorants and dental floss, to trunks, suitcases, briefcases, and various clothing items.

Owners of beauty parlours its employees, street sellers and self employed were among the badly hit by this short sighted decision to save few dollars more, they said.

At Pettah, the small- and medium-scale shop owners also raised concerns over the latest ban, saying that the price of bags and shoes would increase to the point where people cannot afford to buy them.

A yard of fabric has increased from Rs. 375 to Rs. 575, while the prices of clothes have increased from Rs. 2,000 to Rs. 5,000. Now, clothes have become a special commodity.

Meanwhile, the owner of a cosmetic shop in Maharagama said that they could provide shampoo and other cosmetics at a normal price since they have already been imported, but that the next shipment would cost double the price.

Meanwhile, the traders of Pamunuwa, Maharagama, also protested against the increase of electricity tariffs by 75%.and the increase in prices of clothing They noted that this decision was made to destroy small-scale industries. If the Government is trying to stop bringing in material, then they should have a plan to produce locally.

This protest is not to change the Government, but to show our struggle. We want to live. More than one million people depend on this business. Is the Government asking us to engage in farming instead?”

At Pamunuwa, 70% of those in stalls are women. They start their business early in the morning at around 4 a.m.he price of skirts has increased from Rs. 550 to Rs. 1,000. We urge the Government to provide us with solutions, they said.

Meanwhile, the country is facing a serious shortage of forex and the government is struggling to even provide for the basic necessities, even after defaulting on the forex debt.

Inflation has risen to over 50%, and is expected to exceed 70% according to the 8th Respondent. The cut-off levels of Treasury bill interest rates have already soared beyond 35% per annum.

The limited progress seems to also indicate that Sri Lanka is slowly but surely being strangled by outside forces on whom the Government is now compelled to rely upon, and needless to say, over a very short period, the economy is likely to shrink further, and the country will be at risk of plunging towards despair and destruction.

It is also now observed that fresh conditions are being proposed by IMF members which may make it even more challenging for Sri Lanka to ever access an IMF Programme and its funds, without first making contentious social and foreign policy changes as well.