Business
Sri Lanka’s Food Security after Cyclone Ditwah: Risk, Recovery, and Resilience
Cyclone Ditwah destroyed early-stage Maha season paddy, vegetables, and perennial crops, disrupting both current and upcoming harvests.Together, rising prices, lower production, and declining purchasing power are likely to intensify food insecurity and further undermine nutrition.Restoring transport links, supporting farmers to replant, protecting vulnerable households and strengthening climate-resilient farming are essential.
The year 2025 has been disastrous for Sri Lanka’s agriculture, especially after Cyclone Ditwah caused severe destruction through heavy rains, landslides, and crop damages in different agro-ecological zones. While the immediate physical devastation was evident in the destruction of houses and infrastructure, the deeper and far-reaching consequence are the hidden agricultural toll which will shape food availability and farm incomes well into 2026. The cyclone came when the Yala crop had been harvested and most of the Maha season crops were either just emerging or were still young at a stage of high vulnerability. Young plants either got buried or pulled out, field plants were submerged, and trees lost their fruits and flowers at an unusually high rate. All these disruptions affect paddy, vegetables, fruits, plantation crops and home gardens and cause a cascading shock which not only undermines the current production but also threatens future harvests, household nutrition and national food security.
The Hidden Agricultural Toll of Cyclone Ditwah
Cyclone Ditwah caused severe damage to early-stage Maha season crops—particularly paddy, vegetables, and other field crops—creating a shock with both immediate and long-term production impacts. Even perennial crops such as tea, rubber, coconut, fruit trees, and home garden crops, which are typically less affected by short seasonal fluctuations, are expected to have sustained varying levels of damage as well. The scale of these losses is largely because a significant portion of the affected area overlaps with Sri Lanka’s main crop-growing regions. Paddy cultivations were at their most vulnerable early stages such as seedling, transplanting, and early vegetative when the cyclone struck. Intense and prolonged rainfall has left large areas submerged or waterlogged, delaying planting cycles, reducing the cultivated area, and likely causing significant yield losses in the upcoming harvest.
Extensive losses occurred to vegetable and other field crop productions across both up-country and low-country regions. Many vegetable cultivations nearing harvests and in vegetative, flowering, or early fruiting stages, suffered severe damage due to flooding, prolonged waterlogging, and strong winds. Anecdotal reports from the Galkadapathana Village in Nuwara Eliya district, for instance, indicate some localised damage to vegetable cultivations under protective structures such as greenhouses as well.
According to the patterns seen during the 2017 floods and landslides, which were smaller than Cyclone Ditwah, similar or greater levels of damage for plantation crops like tea, rubber, and coconut, are highly likely. Strong winds and landslides can injure trees physically, which may lead to dropping of flowers and immature nuts, resulting in production declines in the following months.
Based on experiences from the 2017 floods and landslides, home gardens and mixed cropping systems, many of which had reached vegetative or early fruiting stages, are also likely to have been damaged, often buried under mud and sand, requiring extensive cleaning and replanting in most cases.
From Production Losses to Price Spikes: The Emerging Food Security Outlook
Using the 101kg annual consumption per capita in 2019 as a benchmark, the total national need for paddy approximates 4 million MT which includes seed paddy, processing losses, wastage and other requirements. The Maha season contributes roughly two-thirds of the rice production with the planting of approximately 800,000 hectares each year. However, the Disaster Management Centre (DMC) has reported that paddy has been sown on 563,950 hectares so far and most of this area has suffered due to the heavy rains. Hence, the production will be very low in 2026, causing food security implications unless immediate soil fertility restoration and replanting take place. Similarly, about 95,799 hectares of other field crops (OFC) and 13,463 hectares of vegetables which is about 64% of Maha 2024 OFC extent and 74% of Maha 2024 vegetable extent have sustained extensive damage.
The income of farmers from the affected areas will most likely reduce significantly because of crop destruction and planting delays. A substantial investment will be required to renew production capacity through soil fertility restoration, protective structure repairing, and replanting. For many smallholder farmers who are already struggling with lower profits, the increased costs of replanting may result in having to borrow funds, thereby reducing their ability to cope with future climate change shocks. Communities working in plantations like tea and rubber will also face income cuts owing to the destruction of estates and the disruption of the harvesting cycles which will subsequently impact their food security and general wellbeing.
The cyclone’s immediate effect was a dramatic rise in vegetable prices that were mainly due to a sudden shortage of supply. Among the affected vegetables were carrot, green chilli, cabbage, beans, tomato, and pumpkin, which in some markets have even experienced price increases of 100% to 350%. These price hikes make it much less affordable for low-income families to buy food and practically cut off their access to micronutrient-rich foods that are taken as a staple in a healthy diet. In fact, vulnerable groups, such as children under five, pregnant and lactating mothers, older persons, and people with disabilities will have an even harder time coping with malnutrition as their access to regular meals gets more limited. While price volatility is likely to persist for at least a few weeks until roads are cleared and supply flows stabilise, this short-term improvement may not fully offset the longer-term food supply challenges that are expected to emerge in 2026.
Nationally, food insecurity is likely to increase due to a reduction in domestic production, reduced farmer incomes, and higher consumer prices. With restricted access to fruits, vegetables, and other nutrient-dense foods, the population’s nutrition will likely worsen, particularly for poor and vulnerable households. More broadly, Sri Lanka’s increased reliance on imports such as onions, potatoes, pulses, fruits, and even rice is going to diminish its foreign exchange reserves and make it more susceptible to the fluctuation in the price of commodities around the world. Recovery and climate resilience development plans throughout the food system are urgently needed given the interconnectedness of the impacts caused by this cyclone through markets, agriculture, livelihoods, and nutrition.
The immediate priority is to restore the physical flow of food from producing areas to the main wholesale and retail markets to normalcy. It is important to consider clearing the up-country road network, improving access to transport corridors that link Nuwara Eliya, Badulla, and Kandy to the Dambulla and Colombo markets. Fast removal of debris, construction of temporary bridges, and emergency repairs on roads can significantly reduce market shortages and, consequently, stabilise prices in the country.
An immediate and precise support package for the agricultural sector is necessary to restore the Maha crop and to avoid further economic losses. Seed packs, tools, and fertilisers given as replacement will support farmers to immediately attend to their paddy fields and vegetable plots. Income loss is another cause for many farmers to struggle with replanting. Thus, grants and soft loans for replanting will be critical in preventing distress borrowing. Repairing collection points, storage areas, and damaged rural roads will not only improve the efficiency of transporting farms produce to markets but also reduce post-harvest losses during the recovery period.
It is necessary to safeguard the most vulnerable households during the time of price fluctuations. Poor families living in towns and plantations can be shielded from malnutrition with the help of temporary targeted food subsidies for essential vegetables and pulses. In addition, market monitoring should be reinforced to prevent skyrocketing prices, hoarding, and rent-seeking, which commonly exacerbate the impact of such crises.
The cyclone has shown that climate resilience in various agro-ecological zones is a pressing need. Climate-smart agricultural practices, such as the use of drip irrigation, protected cultivation, planting of climate-resilient varieties, and slope stabilisation, are most crucial to agriculture in high-risk upcountry regions. It is suggested that the district-level disaster preparedness plans should include better integration and early warning systems for landslides, flash floods, and severe storms. Investment in protected cultivation structures like polytunnels and similar approaches can reduce crop losses and maintain the market supply even in harsh weather conditions in areas that are prone to high rainfall or landslides.
By Manoj Thibbotuwawa and Chandula Idirisinghe
Business
Oil at $150 will trigger global recession, says boss of financial giant BlackRock
If the price of oil hits $150 a barrel it will trigger a global recession, the boss of US financial giant BlackRock has told the BBC.
Larry Fink, who leads the world’s largest asset manager, said if Iran “remains a threat” and oil prices stay high it will have “profound implications” for the world economy.
In a wide-ranging exclusive interview, he also denied there was an AI bubble, although he said the new technology meant too many people were pursuing university degrees and not enough doing technical training.
BlackRock is a financial colossus, controlling assets worth $14 trillion (£10.5tn), and is one of the biggest investors in many of the world’s largest companies.
Its size and spread gives Fink – who is one of the eight co-founders of the business, which started in 1988 – a unique insight into the health of the global economy.
The conflict in the Middle East has triggered wild moves on financial markets as people try to assess what will happen to energy costs.
For Fink, it is too early to determine the ultimate scale and outcome of the conflict, but he believes it will be one of two extreme scenarios.
In one, if the conflict is settled and Iran becomes a country that can be accepted again by the international community then the price of oil could fall back to below where it stood before the war.
But if not, he says, then there could be “years of above $100, closer to $150 oil, which has profound implications in the economy” and an outcome of “a probably stark and steep recession”.
The surge in energy costs has led to some in the UK to argue that it should be focusing more on producing its own oil and gas.
On Tuesday, industry body Offshore Energies UK said that without more domestic production, the country risks becoming reliant on imports “at a time of rising global instability”.
Fink says countries need to be pragmatic about their energy mix by using all sources available to them, but providing cheap energy is key to driving growth and raising living standards.
“Rising energy prices is a very regressive tax. It affects the poor more than the wealthy.”
While the UK already has some solar and wind power and hydrocarbons, if oil prices were to rise to $150 for three or four years, “you would have so many countries moving so rapidly towards solar and maybe even wind”.
Countries should not depend on just one source, he says.
“Use what you have unquestionably, but also aggressively move towards alternative sources too.”
Some analysts have suggested that there are some echoes of the run-up to the 2007-08 financial crisis in the markets at the moment.
Energy prices are surging and some have flagged signs of cracks in the financial system. BlackRock itself is one of several firms to have limited withdrawals by nervous investors from private credit funds.
But Fink is adamant there is no chance of a repeat of the financial trauma seen in 2007-08, when several banks around the world collapsed or had to be rescued, as he believes financial institutions today are more secure.
“I don’t see any similarities at all,” he says. “Zero.”
The issues affecting some funds account for a small fraction of the overall market and investment from institutions remains strong, he says.
Fink also rejects suggestions that the surge in investment in AI, which has seen billions of dollars invested in the new technology, has been overblown.
“I do not believe we have a bubble at all,” he says.
“Could we have one or two failures in AI? Sure, that I’m fine with.”
Last year, BlackRock was part of a consortium that bought one of the world’s largest data centre providers, Aligned Data Centres, in a $40bn deal.
“I believe there’s a race for technology dominance. I believe that if we do not invest more, China wins. I believe it’s mandatory that we are aggressively building out our AI capabilities.”
The biggest issue he feels that is hindering the expansion of AI in the US and Europe is the cost of energy.
While China is investing hugely in solar and nuclear power, in Europe “I just see a lot of talk and no action”, he says, while in the US “as much as we are energy independent, we better start focusing on solar… because we need to have cheap, inexpensive power to move into AI”.
Earlier this week, in his annual letter to shareholders, Fink said the boom in artificial intelligence risked widening inequality, with only a small number of firms and investors seeing the benefits.
However, speaking to the BBC, he emphasised AI was going to create an “enormous amount of jobs”.
He said that in his letter he had written about how many jobs would be created “related to electricians and welders and plumbers”.
In contrast, there might not be as much demand for some office jobs as AI evolves and this could lead to a rethink about what roles are needed as “society is changing and evolving”.
“We really put judgement on so many jobs and so many people who probably should not have gone into banking or media or law, [who] probably should have been a great worker with their hands, and we need to now rebalance that approach,” he says.
In the US, he says, after World War Two “we built the foundation of education, and we said to all the young people, go to college, go to college, go to college. And we probably overdid it”.
“We need to balance that out, and we need to be proud that… a career can be just as strong in these fields of plumbing and electricians.”
(BBC)
Business
Mahindra ldeal Finance’s Rs 1 Bn debut debenture issue oversubscribed on day 1
Mahindra Ideal Finance Limited (MIFL) has announced the successful conclusion of its debut Rs 1 Billion debenture issue, which was oversubscribed on the first day of opening, marking a significant capital market milestone for one of Sri Lanka’s fastest-growing licensed Non-Banking Financial Institutions.
The Issue comprised up to Ten Million (10,000,000) Tier 2, Listed, Rated, Unsecured, Subordinated, Redeemable Debentures at a par value of LKR 100 per Debenture, raising up to Sri Lanka Rupees One Thousand Million (LKR 1,000,000,000), with a five-year tenure maturing in 2031.
Commenting on the outcome, MIFL Managing Director/CEO, Mufaddal Choonia said the proceeds of the Company’s inaugural debenture issue will be deployed to strengthen lending capacity across its core business segments, including vehicle leasing, gold loans, SME loans, and business loans.
“The success of our first debenture issue is testament of our performance so far and speaks of the confidence that investors have placed in our future growth story. The strong market response is also the best validation we can secure from the investor community on the strong fundamentals that underpin our business. We will honor that trust by deploying these funds to further provide accessible credit to enrich the lives of our customers and for the communities we serve.”
The capital raise also strengthens the Company’s Tier 2 capital base in compliance with the Central Bank of Sri Lanka’s Capital Adequacy Requirements.
The Debentures were offered in two structures — Type A, at a fixed rate of 12.00% per annum payable annually, and Type B, at a floating rate of the 364-Day Treasury Bill rate plus 3.50% per annum payable semi-annually.
The Issue carried a credit rating of A (lka) from Fitch Ratings Lanka Limited, with MIFL holding an entity rating of AA-(lka) with a Stable Outlook. The Issue was managed by NDB Investment Bank Limited, with Bank of Ceylon serving as Joint Placement Agent. (MIFL)
Business
SEC and CSE strengthen role of auditors of Watchlist Companies
The Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) jointly organized an awareness session recently, for auditors of companies which are currently on the CSE Watchlist. The session focused on enhancing awareness of enforcement actions and timelines, reducing prolonged Watchlist durations, and fostering a more coordinated regulatory approach among regulators, auditors, and listed companies.
Addressing the session, the Chairman of the SEC, Senior Prof. D.B.P.H. Dissabandara highlighted the core professional virtues of an auditor drawing from his own career beginnings, “At the heart of every auditor’s role lies three virtues: integrity, objectivity and confidentiality.” He reminded the gathering, that while an auditor may formally be recognized as a supplementary service provider under the SEC Act, their true value runs far deeper. Every time a listed company submits its financial statements, it is the auditor’s opinion that gives investors the confidence to trust those numbers. In that sense, auditors are not just ticking a regulatory box, they are the ones holding the line on transparency.

Senior Prof. D.B.P.H.
Dissabandara
Further, Professor Dissabandara drew attention to the current Watchlist situation, noting that while the inclusion of certain companies on the Watchlist is an appropriate regulatory measure, their prolonged presence on the Watchlist may send adverse signals to investors. He called for a structured connected approach involving auditors and listed company management to ensure incremental progress towards resolving Watchlist triggers, particularly those arising from going concern issues and the non-submission of financial statements.
The Head of Listed Entity Compliance at the CSE, Kassapa Weerasekara delivered a presentation focused on enforcement actions that can lead to securities being transferred to the watchlist. Weerasekara reminded the gathering “If companies take the right steps and obtain independent verification on the resolution of all matters giving rise to Modified Opinion and Emphasis of Matter on Going Concern, their securities can be fully reinstated.” He closed by emphasizing that the process is designed to give companies a fair and structured opportunity to correct course.
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