Connect with us


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



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.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


SL’s hard default status impacts CSE negatively



By Hiran H. Senewiratne

The CSE slipped in the first hour of trading yesterday after opening over 2.0 per cent up due to SJB lawmaker Dr Harsha de Silva informing that Sri Lanka has now become a hard default country with the failure to pay loans raised from other countries, stock market analysts said.

Sri Lanka’s impending default on US $12.6 billion of overseas bonds is flashing a warning sign to investors in other developing nations. Besides surging inflation is set to take a painful toll. The current petrol crisis has driven the CSE to negative territory, analysts said.

Following the previous day’s momentum, the market opened the day gaining over 2.28 per cent or 192.88 points. Amid those developments, the All- Share Price Index slipped 0.39 per cent or 40.44 points and S and P SL20 went down by 7.76 points. Turnover stood at Rs 3.5 billion without a crossing.

In the retail market top seven companies that mainly contributed to the turnover were; Expolanka Holdings Rs 1.1 billion (8.86 million shares traded), Browns Investments Rs 585 million (66.7 million shares traded), LOLC Finance Rs 527 million (49.5 million shares traded), Softlogic Life Insurance Rs 169 million (2.3 million shares traded), Softlogic Holdings Rs 145 million (16.3 million shares traded), LOLC Holdings Rs 116 million (210,000 shares traded) and Lanka IOC Rs 87.1 million (21 million shares traded). During the day 268 million share volumes changed hands in 33659 transactions.

The country’s manufacturing and services sectors suffered a sharp dip in April as per the Purchasing Managers Index (PMI) compiled by the Central Bank.

The manufacturing PMI decreased by 21.4 points as against March whilst the Services PMI was down by 7.5 points. CBSL said the Manufacturing PMI declined significantly in April 2022, following the seasonal pattern and indicating a contraction in manufacturing activities on a month-on-month basis. This would impact the manufacturing and services sector counters in the stock market, analysts said

Sri Lanka’s commercial banks quoted Rs 364 for the dollar against telegraphic transfers yesterday while the Central Bank set a daily guidance rate for interbank spot trade for Rs 359.65 plus or minus Rs 2.50.

Banks could quote Rs 2.50 plus or minus under the new direction and the rate is set below the market rates. The kerb rate has also eased after spiking last week.

Continue Reading


ComBank’s ‘Anagi’ partners with insurance companies to offer affordable insurance to female customers



The Commercial Bank of Ceylon has announced it has partnered with several insurance companies to offer special Life and General insurance products with unmatched low premium rates exclusively for women customers, under the Bank’s ‘Anagi Women’s Banking’ portfolio.

Extending the scope of the Bank’s services to support this segment, the insurance cover comprises of Life insurance, Business insurance, and Home insurance options, the Bank said.

Besides the special premium rates that apply, the insurance can be obtained via an extremely simplified process, and can be extended to the spouses of women customers. The Bank said the scheme is expected to promote financial inclusion, one of the primary objectives of the Anagi Women’s Banking portfolio, through insurance protection.

The policy value of the Life insurance cover provided under this scheme ranges from Rs 1 million to Rs 5 million and covers eventualities of ‘natural and accidental death’ of the life assured during the policy period.

Under this Life insurance facility, a female customer of Commercial Bank between the age of 18 and 45 can sign up for a Rs 1 million policy by just paying an annual premium of Rs 1,100. The spouse can obtain the same policy for Rs 1,500. Women between ages 46 and 65 can opt for the same sum assured with an annual premium of Rs 2,200, if the policy is taken for themselves, or Rs 2,750, if the policy is taken to cover the spouse. The cover can be purchased at multiples of the unit rates of Rs 1,100 or Rs 2,200.

Quoting the 2020 report of the Insurance Regulatory Commission of Sri Lanka (IRCSL), the Bank said these are incredibly affordable life insurance policies for women, considering that the average sum assured in Sri Lanka is only Rs 1.4 million for which long term insurance policyholders pay an average annual premium of Rs 28,655.

Commercial Bank’s female customers who become life insurance policyholders under this scheme are also entitled to value added services such as access to free fitness classes conducted by leading online fitness provider Fitzky, and a 15% discount on consultations at any ‘My Dentist’ clinic, the largest dental clinic chain in Sri Lanka.

In addition to the life cover, business women can also benefit from a Business Insurance under ‘Anagi.’ It offers protection against fire or lightning, explosions, malicious or aircraft damages, a series of natural disasters, burglary, acts of terrorism and commotions among other incidents. The policy covers losses to buildings including permanent fixtures, fittings, machinery, stocks, cash, and personal property of the policyholder and the cost of workmen’s compensation, hospitalisation, loss of rent, removal of debris, architect’s, surveyor’s, and engineer’s fees due to damage or accidents, and damage to service lines, to name a few. It also includes Personal Accident cover for employers and employees in the event of death or permanent disability, as well as legal liability cover.

Continue Reading


LOLC General Insurance named Best General Insurance Company of the Year



Ushan Goonawardane, Chief Strategy Manager, LOLC General Insurance accepting the award in Kolkata, India from Sudhin Roy Chowdhury, a Jury Member.

The 3rd Emerging Asia Insurance Awards 2021, recognized LOLC General Insurance PLC as the ‘Best General Insurance Company of the Year’ amongst the top Insurance companies nominated from South-East Asia. The evaluations were done by PricewaterhouseCoopers (PwC), the multinational professional service network and the event was held ceremonially on the 30th of April 2022 in Kolkata, India.

The Indian Chamber of Commerce (ICC) initiated the Emerging Asia Insurance Awards to acknowledge, honour and to recognise the efforts made by the emerging Asian Insurance companies while creating a platform for them to discuss their common challenges and its ramifications effecting the Insurance sector.

PwC performed the groundwork for the awarding body in reviewing and assessing the applicant profiles. The selection of awards comprised of several criteria and PwC has evaluated the audited financial data (for the last three financial years) of the applicants. Performance on Technical Reserve to Net Premium Ratio, Combined Ratio, Top Line Growth, Shareholder Capital, Number of complaints received, Claim Settlement Ratio and Investment on Training were assessed in gauging the winners.

LOLC General Insurance PLC is a subsidiary of LOLC Holdings PLC, which is one of Sri Lanka’s largest and most diversified conglomerates with operations in 20 countries in Asia and Africa. LOLC General Insurance PLC is currently one of the fastest growing Insurance companies in Sri Lanka and owns 45% of Serendib Micro Insurance PLC in Cambodia. The company has evolved into one of the country’s leading insurance providers of today, in a relatively short period of time.

During the last few years the company continuously streamlined their processes and achieved greater coordination between different units of the company to implement a customer centric approach. The organisation is committed to continuously improve its overall processes, efficiency and relationships to serve the customers better.

During 2021, LOLC General Insurance recorded a premium income growth of 19.2% which was the highest growth recorded by a mid/large sized company in the General Insurance industry and reported paid claims to the tune of Rs. 2.5 billion. LOLC General Insurance has always maintained an undisputed and unsurpassed reputation for speedy settlement of claims. The amount of money provided in lieu of claim reimbursements during the last financial year itself, reflects the company’s commitment to timely claim settlements.

Commenting on the remarkable achievement Chief Executive Officer of LOLC General Insurance, Mr. Kithsiri Gunawardena said “It’s indeed an honour to be adjudged by PwC as the Best General Insurance Company of the Year at the Emerging Asia Insurance Awards 2021 organized by the Indian Chamber of Commerce. Winning the award among Pan-Asian giants this year is all the more precious to us due to all the challenges faced globally as well as within our island nation. I wish to take this opportunity to thank our untiring staff who are key in the success of the organisation and of course our invaluable customers who we strive to give the best service at all times. We will continue to provide innovative risk solutions and create value to our customers, employees and stakeholders!”

LOLC General Insurance aims to help the customers understand and to manage the risks they face, be it individual, family or business. The company works hard to offer the customers a range of products and services coupled with expert support. The solutions assure protection against numerous risks and support all classes of products in the General Insurance space. The organization is supported by Swiss Re, one of the largest reinsurers in the world.

Continue Reading