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Colombo tea prices spiral as Covid-19 lockdowns depress global producers



by Steve A. Morrell

Brokers agreed in their weekly market reports that tea production at 21.9 million kilos for September 2020 was more or less on par with the corresponding month of the previous year (2019).

However, performance year-on-year indicated dismal results with Asia Siyaka Tea Brokers saying comparative results in cumulative perspective reflected a minus variance deficit of 31.8 million kilos.

Production at the end of 2019 was 300.1 million kilos. The deficit performance by end September 2019, cumulatively at 201.1 million kilos, was an indicator that the minus variance would continue with production remaining at that level. Production at end September 2019 was 232.9 million kilos.

Attributed to the production deficit results was the severe drought in the first quarter of 2020, which retarded growth. The drought cut across all elevations, but particularly impacted on low growns, which set back production.

However, prices remained at competitive levels. Cumulatively, up to October 14, 2020, the net sales average (NSA) was Rs. 645.03 per kilo. The 2019 average over the same period was Rs. 513.47 per kilo.

The price table of John Keells Tea Market Report showed a steady increase in prices over the months in 2020. Low growns recorded the highest levels at Rs. 674.25 per kilo thereby contributing substantially to the upward trend in the price table.

The report also said flowery grades prices were high. For low growns, FBOPF recorded Rs. 2,800 per kilo while Op 1 fetched Rs. 3,100. per kilo.

The reasons attributed for the price increases in Colombo were shortages in producing countries in the backdrop of global corona lockdowns. India was singled out for its traumatic market conditions because of the pandemic sweeping the world.

The Uva quality season made a difference in Colombo. Though this year, the season was short-lived, it did contribute its share to the price table.

The Forbes & Walker Tea Market report said CTC (Cut Twist Curl) production at end September 2020 recorded marginal decrease of 0.1 million kilos. However, prices at Rs. 569.95 per kilo were better than the Rs. 420.25 fetched in 2019.

Although, the Covid-19 resulted in a global economic crisis, tea production continued to sustain economic activity in Sri Lanka without interruption. Tea was produced, sales and auctions were carried out and the produce was shipped out as routine.

Brokers attributed the sustained forward movement of the industry to the plantations and the tea smallholders, who continued normal production.

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Cabinet approves rationalization of VAT exemptions and abolition of SVAT System




The Cabinet of Ministers granted concurrence to the resolution forwarded by the Minister of Finance, Economic Stabilization and National Policies to remove most of the releases from Value Added Tax (VAT), further retaining releases that ease the pressure on low – income families to secure the fundamental sectors of the economy as well as the releases for sectors such as education, health and agriculture, as well as to revise the provisions applicable for the Value Added Tax (VAT) act so that the Simplified Value Added Tax (SVAT) methodology can be canceled with effect from 01.01.2024 by introducing a more formal methodology for repaying the Value Added Tax (VAT) and to instruct the Legal Draftsman to prepare a draft bill for the purpose.

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Venora Lanka Power Panels to set up assembly plant in Australia



Sagara Gunawardene

By Hiran H.Senewiratne

Sri Lanka- based, export- oriented manufacturer, Venora Lanka Power Panels (Pvt) Ltd, with a state of the art electric panel factory at the Export Processing Zone, Biyagama, will set up an assembly plant in Australia.

“Once we set up the electric panel assembly plant in Australia, we will export all our panels from Sri Lanka and that plant will do 30 percent value addition to the product to supply that market, the company’s chairman/ Managing Director, engineer Sagara Gunawardena told The Island Financial Review.

Gunawardena said that the company is a value- addition assembly plant and he would be investing AUS $ 2 million for the project to be set up in Melbourne and hire 100 engineers and other professionals. He explained that the venture has enormous potential.

Venora Lanka provides power panels to mega projects in Sri Lanka and exports to Bangladesh, Maldives, Kenya, Ethiopia, Seychelles and Myanmar. Panel assembling is strictly in compliance with IEC 61439 standards, it was explained.

Gunawardena added: ‘I firmly believe that, being a truly customer focused organization, every employee and every process in the organization has to be aligned behind delighting customers. Therefore, at a time when the country is facing a major dollar crisis, my company would be aiming at bringing dollars into the country, while providing employment for local professionals, especially engineers.

‘At Venora Lanka we do not try to change customers’ mindsets. Instead, we take time to understand what they really want and focus our brand on delivering that. Venora is values- driven first and cost- driven second – creating a unique brand proposition.

‘Since the US dollar rate has come down, it is our concern that importers and suppliers do not change their prices, which is really affecting the manufacturing sector.

Company sources added: ‘The company has several wings of operation, such as local and overseas projects, switch board assembling, telecommunication infrastructure installations, earthing, lighting and surge protection, incorporating world renowned brands.

‘Venora Lanka Power Panels is the first Sri Lankan company to receive the licence, in accordance with the UK Trade Mark Act 1994, to use the trade mark “Best Enterprise”. It won a global award at the event, ‘Golden Awards for Quality and Business Prestige’, held in Geneva, Switzerland, in 2015.

‘Within a short span of time, with the perfect blend of progressive thinking and expertise, Venora Group has expanded to consist of, Venora International Projects, Venora Telecom, Venora Industrial Solutions and Venora Lanka Power Panels (BOI approved). Further, Venora has established its overseas presence through Venora Engineering Kenya and Venora Engineering Myanmar.’

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Share market moves into positive territory; indices up



By Hiran H. Senewiratne

CSE trading got off to a positive note yesterday but during the last session of the day the momentum slowed. However, the market is now moving towards positive territory following the Central Bank announcement of a downward trend in interest rates, market analysts said.

Amid those developments the market witnesses improvements in both indices and in the turnover.

The All- Share Price Index up by 12.8 points and S and P SL 20 rose by 6.97 points. Turnover stood at Rs 710 million with one crossing. The crossing was reported in JKH which crossed 430,000 shares to the tune of Rs 60.2 million; its shares traded at Rs 140.

In the retail market top seven companies that mainly contributed to the turnover were; JKH Rs 212 million (1.5 million shares traded), Access Engineering Rs 44.7 million ( three million shares traded), Lanka IOC Rs 34.5 million (264,000 shares traded), Browns Investments Rs 28.6 million (5.3 million shares traded), LOLC Finance Rs 23.8 million (4.7 million shares traded), Capital Alliance Rs 22.9 million (615,000 shares traded) and First Capital Holdings Rs 19.2 million (574,000 shares traded). During the day the 31.4 million shares volumes changed hands in 9000 transactions.

Yesterday, the Central Bank’s US dollar buying rate was Rs 285.16 and the selling rate Rs 298.85.

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