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Commercial plantations urge immediate government action to prevent industry’s demise

Published

3 years ago

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RPCs allege discrimination by authorities on allocation of fuel for leaf and latex transport and power generation

Calls for radical and bold reforms to resuscitate industry including allowing hybrid $ auctions

Calls for additional assistance to increase production to enhance dollar earnings and measures to reduce high COP

The Government’s failure to allocate fuel quotas to the Regional Plantation Companies (RPCs), together with continuous power disruptions and uninformed policymaking, is bringing Sri Lanka’s commercial plantations to a standstill. Due to the lack of fuel, all leaf and latex transport operations have been severely impacted and there is insufficient fuel to operate standby generators.

Accordingly, the Planters’ Association of Ceylon (PA), demanded that authorities take immediate action to prioritize Sri Lanka’s plantation industry which contributes over USD 1.5 billion to Sri Lanka’s export revenue.

Commenting on the dire situation, PA media spokesperson, Dr. Roshan Rajadurai cautioned that the Government’s continuing failure to give any priority whatsoever to the needs of RPCs and the broader industry, together with a series of catastrophic policy blunders had resulted in severe disruptions to production and transport and rapid escalation of production cost of tea by around 30% from the beginning of 2022.

“RPCs will no longer be able to continue operations as usual if real and meaningful solutions are not provided immediately,” emphasised Dr. Rajadurai. “Despite our critical contribution to the industry and the Sri Lankan economy, the authorities have failed to understand our value. Instead they have continuously discriminated the RPCs even in the past, as compared with other export industry stakeholders and the rest of the plantation sector.”

“Our sector was severely disrupted even before the current domestic economic crisis by uninformed policy making decisions, including the completely irrational ban on import of essential agriculture inputs. The issues we are seeing now across the economy are directly connected to this unplanned, unscientific, and short-sighted approach to policy,” Rajadurai added. “While at long last, the Government has publicly accepted the failure of this policy, the once vocal proponents of such unsound claims are nowhere to be seen although the industry continues to pay the price, despite our repeated warnings and admonitions about the ill effects of such policy.”

While the Government retracted its decision to ban imports of agricultural inputs such as fertiliser, recommended weedicides, fungicides and pesticides, these have not been available since April 2021. The bureaucratic processes required for the bans to be lifted takes a long time, and have obstructed imports, creating severe shortages. Compounding these challenges, the depreciation of the Rupee and the global increase in commodity prices have resulted in the price of these essential inputs skyrocketing. For instance, the price of fertiliser used for tea has increased 25-fold from before the ban; from approximately Rs. 30,000 per metric tonne (MT) of urea to Rs. 750,000 per MT and prices are still increasing.

As a result, the cost of production of 1kg of tea has now risen to nearly Rs. 800. However, at the Colombo Tea Auction, the Net Sale Average (NSA) of high-grown tea was only around Rs. 717, up to end March 2022.

In addition, the unavailability of inputs will reduce yields and quality in the long run. Despite better weather compared to last year, the industry has seen a decline in tea and rubber crops this year, compared with the corresponding period of last year, as the lack of agricultural inputs such as fertilizer, weedicides and fungicides begin to take effect. With tea and rubber being perennial/long-term crops, such adverse effects on yield could be felt throughout the productive life of the plant. Rubber cultivations too have been impacted by fast-spreading diseases such as pesta. In the absence of necessary inputs to arrest their spread the disease has already resulted in a 30% – 40% crop loss.

Tea estates operate throughout the 24 hours of the day and require uninterrupted electricity to do so. If, for instance, the withering operation is disrupted/interrupted for a few hours, bacterial contamination takes place, drastically reducing the quality of the tea produced. Acknowledging this, the authorities have allocated fuel quotas to the rest of the industry value chain for them to continue operations by running their generators during power cuts, but the RPCs have been inexplicably ignored.

Transporting inputs and raw materials such as green leaf and latex to and between large land areas in commercial estates and transporting produce to Colombo have also become extremely difficult due to the lack of fuel. This will lead to the complete breakdown of estate operations and consequently the RPCs will not be able to operate the estates leading to severe and serious social unrest under these present volatile situations in the country. Over 1 million people reside within the country’s large commercial estate sector and their livelihood is totally dependent on the plantation economy.

For the plantation sector to continue operations, uninterrupted power and fuel – including for internal transport – need to be provided as priority. Since suppliers are also now demanding for payments in foreign currency, the RPCs are also strongly urging the authorities to allow tea producers participating at the Colombo Tea Auction to obtain their payments from tea exporters in foreign currency.

A hybrid system, which allows exporters to pay tea producers in foreign currency and local buyers of tea to pay in Rupees is prudent and fair, considering how other export industries are allowed to obtain payments in foreign currency. Notably, 95% of Ceylon Tea is exported and the industry is a major generator of valuable foreign exchange for the country.

Given the sharp increase in the cost of vital agri inputs, the RPCs also urge the Government to include the commercial plantation sector in any beneficial scheme through which such inputs are made available to producers, using funds from multilateral agencies. The RPCs provide a range of services and care for a population of over 1 million residing in the estates and also support the smallholders by processing their tea leaves and rubber latex, serving as a vital cog in the industry’s supply chain.

In the medium to long-term, the RPCs see stable policymaking made in consultation with industry practitioners as essential for the growth and economic sustainability of the plantation industry.


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President and Indian PM jointly launch and inaugurate three development projects

Published

9 hours ago

on

2025/04/6

By

The inauguration and commencement of three development projects implemented in the country with the assistance of the Indian Government took place on Saturday (05)

These projects include the commencement of construction of the Sampur Solar Power Plant, which will add 50 megawatts to the national grid, the inauguration of the Temperature and Humidity Controlled Agro Cold Storage complex in Dambulla and the installation of solar panels on 5,000 religious sites. President Anura Kumara Disanayake and Prime Minister Shri Narendra Modi jointly inaugurated and launched these projects via virtual technology following their official meeting at the Presidential Secretariat on Saturday morning.

Prime Minister Modi’s visit to Sri Lanka reaffirms the concept of “Friendship of Centuries, Commitment to a Prosperous Future,” strengthening the deep-rooted ties between the two nations.
The Sampur Solar Power Plant is part of the Eastern Renewable Energy Zone, which is being established under Sri Lanka’s Long-Term Generation Expansion Plan (LTGEP). It is being developed by Trincomalee Power Company, a joint venture between India’s NTPC Limited and the Ceylon Electricity Board (CEB).

The project is planned in two phases, with the second phase scheduled to commence in 2027. A 500-acre land area has been allocated for this initiative, under the first phase it will contribute 50 megawatts of electricity to the national grid. The project will incorporate state-of-the-art N-type TOPCon solar cell technology, enhancing energy security and promoting a shift from fossil fuel dependency to renewable energy sources. Consequently, the Sampur Solar Power Project is expected to reduce annual carbon dioxide emissions by approximately 200,000 tonnes.

The Dambulla Agricultural Storage Complex (Cold Storage Facility), with a capacity of 5,000 metric tons and equipped with temperature and humidity control, was inaugurated today with the objective of reducing post-harvest losses by approximately 40%, stabilizing fluctuations in agricultural product prices, ensuring the supply of high-quality food to consumers and enhancing agricultural sustainability.

To facilitate research on advanced storage methods for different crops, the facility includes six storage chambers, each designed to simulate various climatic conditions. This is the first facility of its kind in Sri Lanka, built at a total cost of LKR 524 million, with LKR 300 million provided as a grant by the Government of India and LKR 224 million contributed by the Government of Sri Lanka.

The Government of India has invested USD 17 million on the project to install solar panels on 5,000 religious sites and  places of worship representing all major religions in all 25 districts. The nitiative, is being implemented jointly by the Ceylon Electricity Board, the Sri Lanka Sustainable Energy Authority and Lanka Electricity Company (Pvt) Ltd.

Under this project, 5,000 solar panel systems with a capacity of 5 kW each will be installed on the rooftops of Buddhist, Hindu, Muslim, Catholic and Christian places of worship. This is expected to add 25 megawatts of solar power capacity to the national electricity grid. The initiative underscores the government’s commitment to a cost-effective, sustainable and reliable energy system.

[PMD]

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Will the U.S. 44% Tariff on Sri Lankan Exports Harm Key Industries? Examining the Impact and Sri Lanka’s Path Forward – Ambassador Kananathan

Published

14 hours ago

on

2025/04/6

By

Kananathan

Sri Lanka’s export sector is grappling with a significant challenge following the United States’ decision to impose a 44% reciprocal tariff on Sri Lankan goods. This steep tariff threatens the country’s trade with the U.S., particularly in the apparel industry, which serves as a cornerstone of Sri Lanka’s economy.

Tea and Other Exports Also Under Threat

The repercussions extend beyond apparel, with tea exports at risk due to increased costs that may reduce Sri Lanka’s competitiveness against major producers like India, Kenya, and China. Other key export segments, including spices, seafood, and coconut-based products, are also likely to face price pressures, making it difficult for Sri Lankan exporters to sustain their foothold in the U.S. market.

Given that the United States is a major buyer of Sri Lankan goods, this move raises concerns about trade competitiveness, long-term sustainability, and economic stability. The question now is: how will this tariff impact Sri Lanka’s export-driven industries, particularly apparel, and what strategies can be employed to counteract the effects?

A Major Blow to the Apparel Sector – Sri Lanka’s Leading Foreign Exchange Earner

Ambassador Kana Kananathan, former High Commissioner to Kenya, has warned that this development could severely impact the apparel sector, which accounts for nearly 40% of Sri Lanka’s total exports. With U.S. buyers contributing approximately $3.3 billion annually, the apparel trade constitutes a crucial revenue stream for the nation.

A 44% tariff would substantially raise the cost of Sri Lankan apparel, making it less competitive compared to manufacturers in Bangladesh, Vietnam, Cambodia, and India. This could lead to a significant drop in orders from American buyers, posing a serious threat to the industry’s growth and employment rates.

Navigating the Challenge: Government and Industry Response

While immediate government intervention is necessary to mitigate these effects, businesses must also take proactive measures. Innovation, market diversification, and strengthening supply chain resilience will be essential strategies for overcoming these trade barriers. With the right approach, Sri Lanka can navigate this challenge and position itself more robustly in the global marketplace.

Ambassador Kananathan also suggested that exporters explore the ‘1/3 Cost-Sharing Model’ as a potential solution. Under this approach:

=Sri Lankan Manufacturers accept a partial reduction in profit margins, ensuring their products remain competitively priced.

=U.S. Retailers and Brands agree to absorb a portion of the tariff, recognizing the value of maintaining a reliable Sri Lankan supply chain.

=Raw Material Suppliers provide pricing flexibility, such as offering discounts or extending credit terms, to help offset cost increases.

By adopting these strategic adjustments, Sri Lanka’s export industry can mitigate the immediate impact of the tariff while laying the foundation for long-term trade resilience.

( Ambassador Kananathan was Sri Lanka”s former High Commissioner to Kenya and with concurrent accreditation to 23 African countries as well as Sri Lanka’s Permanent representative to UNEP and UN Habitat)

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Three Sinha Industries wins award for excellence at SLIA

Published

14 hours ago

on

2025/04/6

By

Managing Director Manjula Ariyakumara receiving the award

Three Sinha Industries Pvt. Ltd. has been recognised with the Award of Excellence at the Sri Lanka Institute of Architects (SLIA) Annual Product Awards, held recently in Colombo. The award was presented for the company’s high-quality, fire-resistant doors, which are made using locally sourced materials and designed to meet the highest safety standards. The award ceremony was held recently in Colombo, and Managing Director Manjula Ariyakumara accepted the award on behalf of the company, marking yet another milestone in Three Sinha’s journey of excellence.

From its establishment as a small-scale business, Three Sinha has grown into a trusted name in Sri Lanka’s construction industry. The company has built a strong reputation for its commitment to quality, innovation, and reliability, earning both local and international recognition. Over the years, it has received several certifications for maintaining top-tier quality standards. Three Sinha has also received many other local and international awards.

Three Sinha Industries offers a diverse range of products and services, including roller doors, shutters, and fire-resistant doors that provide enhanced safety and durability. The company also specialises in aluminum fabrications, sensor doors, and automatic barriers, ensuring a comprehensive suite of solutions for the construction sector. Embracing sustainability, Three Sinha has expanded into green energy solutions, offering three types of solar PV electricity systems: on-grid, off-grid, and hybrid. Additionally, its subsidiary, IKLO Industries, focuses on pre-fabricated and pre-engineered steel buildings, incorporating advanced technology to meet modern construction demands. IKLO has also ventured into the agricultural sector by introducing tractor trailers tailored for farming needs. Moreover, the company manufactures high-quality diesel tanks that meet the standards of both the Ceylon Petroleum Corporation and the Indian Oil Corporation.

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