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Friday March 31, 2023 12:58 pm
Friday March 31, 2023 12:58 pm
ECONOMYNEXT – Sri Lanka Association of Container Transporters and fuel bowser owners has decided to reduce the haulage charges and transportation fee, after the government cut the auto diesel prices by 80 rupees, association officials said.
“Due to the recent reduction in Auto Diesel price from March30, 2023, the committee has decided to reduce haulage charges by 7 percent,” association said.
Sri Lanka Private Petroleum Tanker owners has also decided to reduce the transportation fee of fuel by 8 -10 percent from April onwards.
“We will be meeting with the association members and will be deciding on exactly how much we will be reducing,” the General Secretary of the association Nimal Amarasekera told EconomyNext.
“We hope to reduce it by 8-10 percent and will be applied.”
Meanwhile United Lanka Fuel Transport Bowser Owners Association said, the price reduction will be done, and the specific amount will be calculated using the cost per kilometer for a transporting bowser.
“We have different types of bowsers such as 13,200 litre and 19,800 litre likewise,” Association President K.W. Charles told EconomyNext.
“So the cost per kilometer per bowser is different and after we calculate only we can give a specific percentage.
“It will come to effect from this month and the payments for the next month will be based on the new prices.”
Charles said, this is only based on the price reduction of fuel, however several costs as maintenance and spare part costs should also be considered when deciding the transportation cost, which is also being discussed with the Ceylon Petroleum Corporation.
Sri Lanka slashed fuel prices with effect from Wednesday (29) midnight, Power and Energy Minister Kanchana Wijesekera said, after a protest by trade unions of state-run fuel retailer Ceylon Petroleum Corporation (CPC) resulting in queues at filling stations due to supply disruption.
The price of Petrol 92 Octane will be slashed by 15 percent or 60 rupees to 340, Petrol 95 Octane 95 will be reduced by 26.5 percent or 135 rupees to 375, Auto Diesel by 19.8 percent or 80 rupees to 325, and kerosene by 3.3 percent or 10 rupees to 295. (Colombo/ March31/2023)
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Monday April 3, 2023 12:26 am
Monday April 3, 2023 12:26 am
ECONOMYNEXT – Sri Lanka expects discussions on GDP linked bonds and the possibility of future economic growth being higher than projected in a debt sustainability analysis done by the International Monetary Fund, bond holders were told in a presentation.
The possibility of GDP being higher than projected by the IMF will be discussed at upcoming talks with private creditors, a representative of Sri Lanka’s financial advisors told an online meeting with commercial creditors.
The person was responding to a question on “What is the likelihood of external debt re-structuring being linked to external debt re-structure?”
As part of the negotiations, it will be discussed “what if the country performs better than expected”, the advisor said.
“There will be a number of discussions from creditors for sure,” the advisor said.
The IMF had projected growth of 3.1 percent for the next few years, which Central Bank Governor Nandalal Weerasinghe characterized as “conservative”.
Sri Lanka believes that the country can “overperform” on economic growth, but it was too early to say whether it would be 4 to 5 percent or higher, he said, responding to creditor online queries.
Some private creditors are said to be discussing the possibility of offering to take so-called ‘downside’ bonds where a bond exchange is made on a more optimistic forecast and cash flows will fall if growth falters to 3.1 percent.
There have been ‘upside’ instruments used in the past, to which sovereigns have agreed. The instruments used so far had not been bonds, but a type of warrant.
Sri Lanka registered higher levels of growth than 3 percent during a 30-year war.
However, in peacetime growth faltered as inflationary open market operations unleashed to suppress rates and generate 5 percent inflation and also output gap targeting (monetary stimulus), under flexible inflation targeting, triggering a series of currency crises and eventual external default in 2022.
Forex shortages or balance of payments deficits, a problem associated with pegged central banks, emerge when external and domestic monetary anchors conflict (typically attempts to operate both money and exchange policy).
Sri Lanka’s intermediate regime central bank has denied monetary stability and a stable foundation for people to grow the economy for 73 years by suppressing interest rates through inflationary open market operations or targeting the yield curve by purchasing bonds in and out of auctions.
Instead of restoring monetary stability, the money producing monopoly went beyond legal tender laws to enact exchange controls. The central bank has in the past egged the Treasury to impose import controls, through a law enacted in 1969 after triggering forex shortages.
Sri Lanka dropped a consistent policy peg in March 2023 and moved to an ad hoc peg or a flexible exchange rate.
According to the IMF’s core monetary program (Performance Criteria) forex reserves of 1.4 billion US dollars should be collected in 2023 while running the ad hoc peg, with no obvious mechanism to deal with the liquidity created from any central bank dollar purchases.
There is also a double digit inflation target, leaving room for renewed currency instability, regressive inflation taxes on the poor through depreciation, social unrest and low growth. In a further complication, IMF money could also be used for budgetary purposes.
The liquidity impact of such operations or any counter actions are not known. (Colombo/Apr03/2023)
Sunday April 2, 2023 10:35 pm
Sunday April 2, 2023 10:35 pm
ECONOMYNEXT – Sri Lanka’s High and Medium Growns prices were down while Low Grown prices were slightly up at an auction on March 29, amidst to limited activity with the Ramadan festival and restricted purchases due to the end of the financial year.
Total auction volume was 5.1 million kilograms and there was good general demand, Forbes and Walker tea brokers said in a report.
The weekly sale average fell to 1271.28 rupees from 1282.01 rupees a week ago, according to data.
High Growns
The High Grown sale average was down by 25.87 rupees to 1,308.98 from 1,334.85 rupees last week, Ceylon Tea Brokers said.
Ex-Estate offerings were fairly similar to last and totaled 0.74 million kilos
Overall quality in regard to teas in the Western and Nuwara Eliya planting districts were barely maintained, whilst the others were fairly similar to last, Forbes and Walker said.
BOP prices fell by 50 rupees, PF! Prices fell by 30 rupees while the price of BOPF fell by 100 rupees per kilo.
Teas at the lower end of the market often sold around last week’s levels although towards the close prices tend to weaken marginally.
Low Growns
The average price of Low Growns fell 6.75 rupees to 1,300.28 rupees.
Price if FBOP fell by 150 rupees, FBOPF1 fell by 100 rupees and PEK1 fell by 200 rupees while OP1 grew 50 rupees per kilo.
The market met with fair demand at lower levels, particularly for the well-made teas. However, the teas at the bottom continued to sell well, Forbes and Walker said.
Low Growns comprised of 2.2 million kilograms.
In the Leafy and Semi Leafy catalogues, OP1’s in general were steady. Well-made BOP1’s remained firm, whilst the teas at the bottom fell.
Well-made OP/OPA’s in general eased, whilst the teas at the bottom were firm.
However, smaller OP varieties declined substantially. PEK/PEK1’s, in general, declined.
Medium Growns
The Medium Growns sale average fell 8.53 rupees to 1,118.69 rupees last week.
BOP1 fell 50 rupees per kilo while OP1 and OP/OPA grew by 40 and 50 rupees respectively per kilo.
PEK/PEK1’s in general fell by 50-100 rupees per kilo and more at times.
Well-made FBOP/FF1’s together with cleaner below best sorts were selectively grew.
Others at the lower end were down. (Colombo/April2/2023)
Sunday April 2, 2023 9:09 pm
Sunday April 2, 2023 9:09 pm
ECONOMYNEXT – MOZBrands, a Sri Lanka start up, said it is taking hand woven fabric to the premium necktie market, helping a traditional industry to cater to modern needs.
“Although Sri Lanka has a 2,500 year history of hand weaving, including unique Dumbara weaving tradition, the handloom industry has not diversified and grown to cater to modern needs,” the company said.
“MOZ has developed unique fabrics using traditional weaving techniques in collaboration with the Department of Textile Industries.”
To develop a premium brand, unique or specialist fabrics and designs are needed.
Handloom s as the potential to make small quantities of specialist fabrics.
Indika Hettiaracchi, founder of MOZBrands says there are hundreds of different weaves in handlooms that are rarely used.
MOZ Heritage Neckties closely resemble Italian Grenadine neckties, he said.
MOZ is currently experimenting how to make neckwear fabrics using 100 percent natural yarn to produce all natural yarn neckwear targeting the premium international market.
The global neckwear market is estimated at 5.7 billion in 2022 and expected to grow close to 5 percent per year.
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