June 14, Colombo (LNW): Tea production in May saw an uptick, but the first five months’ crop sustained an overall decline, highlighting ongoing challenges within the industry, including weather variability and other factors on cultivation, especially dwindling of plantations owing to illegal encroachments.  . 

Sri Lanka tea plantation sector is facing an alarming issue of illegal encroachments of estates managed by the Regional Plantation Companies (RPCs) by unknown gangs with the backing of politicians in respective areas, several planters and residents complained. 

The extent of plantation land has been shrinking since RPCs took over its management in 1995 due to either land encroachments, subleasing or selling lands lots illegally.       

According to official data, 94.521 hectares leased out to 20 RPCs in 1995, have dwindled to a level of less than 72.000 ha after 28 years

An expert panel appointed by the Sri Lankan government is reviewing lease agreements with Regional Plantation Companies (RPC), Minister of Estate Infrastructure Development Jeevan Thondaman said.

The tea export sector cannot grow beyond the available tea crop volume in Sri Lanka. The declining trend in the tea crop has restricted the growth in tea export volume and value. The tea production issue also affects the growth of Sri Lankan tea brands and also the processing of Global Tea Brands by Sri Lankan companies..

Asia Siyaka Commodities Plc said tea production in May increased to 24.54 million kilos, up 14% compared to April 2024. 

However, despite this monthly rise, the overall production for May 2024 declined by 8.5% compared to the same period last year, indicating a broader trend of reduced tea yields. 

The breakdown by elevation categories in May has shown a decrease in comparison with the corresponding month of 2023. 

“The high-grown tea crop saw the sharpest decline of 18.6% year-on-year (YoY) to 5.88 million kilos, whilst medium-grown production experienced a decline of 8.9% YoY decrease to 4.4 million kilos.

 The low-grown crop saw a marginal decline of 3.4% YoY to 14.26 million kilos, relatively better compared to the other two elevation categories,” it added.

 Asia Siyaka also said that January-May 2024 cumulative production totalled 104.37 million kilos registering a decrease of 6.5% YoY compared to 111.57 million kilos in the same period a year earlier.

Compared to the corresponding period in 2023, all elevations have shown negative variances in the year 2024.

 “Low-grown at 62.6 million kilos was down by 6% YoY with a loss of 3.7 million kilos. High-grown trail the previous year with production of 23.5 million kilos following very hot and dry conditions during the first quarter and excessive rain in May.

Mediums have declined to a lesser extent,” it added. The crop fluctuations underscore the need for adaptive strategies among tea growers and stakeholders to mitigate risks and sustain productivity in the face of changing climatic condition

June 14, Colombo (LNW): The Government has decided to implement the new National Tariff Policy in three phases starting January 2025 to establish a stable, predictable tariff framework, boosting competitive edge for trade and investment in Sri Lanka. 

The Cabinet of Ministers on Tuesday approved the implementation of the policy, which will be published through a Gazette notification under Section 101 of the Customs Ordinance to ensure awareness and compliance among stakeholders.

 Treasury Secretary Mahinda Siriwardana has said that Sri Lanka has high import duties, and so-called para-tariffs such as the port and airport levey, and ‘export development’ CESS which has pushed up cost of imported raw materials, making it impossible for any firm other than those in Board of Investment zones, which can import inputs tax free, to be export competitive.

“The tax structure to support exports and investment is also being facilitated, particularly with the phasing out of para-tariffs such as PAL and Cess which have in the past added to cost of raw materials and intermediate inputs which undermined Sri Lanka’s competitiveness,” Siriwardana was quoted as saying at presentation at the Finance Ministry.

“Para-tariffs also contributed to an overall macroeconomic framework that led to an anti-export bias in the economy since they channelled scarce resources into sectors where Sri Lanka has not been globally competitive.”

“The reforms to the tariff structure to support an export-oriented economy will be encapsulated in the National Tariff Policy which is being developed  he saidadding that so-called para tariffs are to be phased out in stages.

Sri Lanka’s investment climate has been negatively impacted by frequent tariff policy revisions aligned with the changing policies of successive Governments. A clear, simple, coherent and predictable tariff system is crucial for maintaining a competitive trade and investment environment.

“This policy aims to establish a more stable and predictable tariff framework, enhancing the competitive environment for trade and investment in Sri Lanka,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the weekly post-Cabinet meeting media briefing yesterday.

In response to this issue, he said a technical committee led by the Director General of the Department of Trade and Investment Policy of the Treasury, along with members from relevant agencies, was appointed on the advice of the Minister of Finance, Economic Stabilisation and National Policy. 

“This committee, in consultation with the business and industry community and under the guidance of trade experts and Ministry Secretaries has formulated the new national tariff policy,” he added.

June 14, Colombo (LNW): SriLankan Airline CEO Richard Nuttall said that the government is on its way to privatise several state-owned enterprises as part of the International Monetary Fund (IMF) program and one of those is the flag carrier of the island nation.

“The government is trying to privatise a number of state-owned enterprises as a part of the IMF program that it’s going through. One of those is SriLankan Airlines,” Nuttall said speaking to ANI on Wednesday.

Nuttall shared that one of the steps taken in that direction is the government helping with the balance sheet which will be completed in a month or two.

“There are two parts to that. One is, the government working to help us with our balance sheet and a lot of work has gone on with that and we expect that to be finished in the next one or two months,” the CEO said.

Nuttal said that the airline is also looking for an investor, three candidates have been finalised and the government is in talks with them.

“And then the other side is looking for an investor. Expressions of interest were completed in April and there were six candidates. That’s now been whittled down to three. So the government is now talking to three different entities and we’ll see what happens from there,” he said.

The CEO shared that no Indian company has showed interest in investing in SriLankan Airlines but one of the consortiums have some Indians in them.

“There’s no Indian company, but one of them is a consortium that we understand has some Indian,” Nuttar said.

Replying to a question about the updates on the expansion plan of Sri Lankan Airlines, Nuttall said, “At the moment, our fleet is 21. 

We’re hoping for it to grow. It should grow to 22 next month. We’re looking to get another three aircraft within the coming twelve months, so that would take us to 25. 

So if you look, we’ve also got a couple of aircraft that we’re replacing with engines. So that’s about 50 per cent growth by the end of this year.”The CEO further added that the expansion will be from increased frequencies to existing destinations rather than adding new destination cities.

“And I think most of the expansion that we’ll get from that will be not new cities, but it will be increasing frequencies to existing destinations, particularly in India and Southeast Asia,” he added.

Nuttall said that during economic downturn that the island nation is currently facing, more people tend to go and work overseas which in turn helps the airline.