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The Friedrich Naumann Foundation to Host an Online Dialogue on Tea

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Representing Ceylon Tea, Dilmah CEO to address on ideas and actions for the tea industry

Bringing to light the challenges faced by tea producers in India and Sri Lanka, the South Asia office of the Friedrich Naumann Foundation (FNF) has organised an Online Business Dialogue under the topic: RESTART ASIAN ECONOMIES: Ideas and Actions for the Tea Industry on 15th March 2021.

Tea is the most consumed beverage in the world, second only to water. With such large-scale use, the production of tea is dominated by a few countries. South Asia as a region is fortunate to produce high quality tea. India, Sri Lanka are among the top 5 exporters of tea in the world. There are thousands of varieties of tea and scientists believe that drinking tea has health benefits attached to it. This perception has also been a factor giving rise to tea consumption in certain parts of the world. Clinical benefits that tea can enhance immunity which can help to fight diseases.

India has produced approx. 1.2 million tonnes of tea, Sri Lanka has produced approx. 300,000 tonnes of tea.

In the year 2020, India saw a decline of 18% in its tea exports. The primary reason behind India’s shortfall in the exports was the strict lockdown which led to skiffing off of overgrown leaves across tea estates. “It resulted in an average year-on-year crop loss of 10% which, in turn, affected exports of good quality tea by around 18%” according to Mr Atul Asthana, MD and CEO, Goodricke Group. This has resulted in India losing its market in countries like Iran, Russia and even Pakistan. Pakistan is the largest importer of tea, importing tea worth over 570 million US $. In 2020, Kenya has become the main exporter of tea to Pakistan.

In Sri Lanka, the tea exports showed a decline of approx. 16% in 2020 when comparing this with 2019 for the period Jan-Jun. However, exports to China increased in 2019, with the youth in China taking a liking for Sri Lankan black tea and this trend continued in 2020. Sri Lanka also introduced the online auctions to tea in 2020.

Distinguished resource persons from the tea industry will discuss solutions and ideas to RESTART their economies and their own personal experiences of how they addressed the challenges posed by COVID-19. This interaction will allow for exchange of ideas, challenges faced by the entrepreneurs and their solutions as well as the role of the government during these trying times.

Tea has become synonymous with South Asians and with abundant tea production, South Asia is both a producer and a consumer of tea. It produces high quality tea and exports its tea across the globe. Whereby countries like India, Sri Lanka and Bangladesh are among the top producers of tea in the world, tea production in Nepal has not been scaled up to realise its potential.

The programme will discuss the challenges and opportunities faced by entrepreneurs in the tea industry especially during COVID and solutions. What are the lessons learnt during COVID. The programme will also discuss future prospects of the tea industry in a changing global environment.

The panelists for the programme are eminent entrepreneurs, not just from the tea industy but also actively engaged in social enterprise. Rudra Chatterjee, from India, Rudra Chatterjee is the Managing Director of Luxmi Tea, founded in 1912, is one of the world’s finest producers of tea, making 30 million kg of tea from 25 estates in India and in Rwanda. Makaibari, acquired by Luxmi in 2013, produces some of the most famous teas in the world. Rudra is an adjunct faculty at IMI and is a guest faculty in IIM Calcutta. He writes op-ed columns for The Statesman and is a guest columnist for The Telegraph. He is a TEDx speaker and was awarded the young entrepreneur award by Chief Minister of West Bengal in 2018.

Rudra served as the President of Indian Chamber of Commerce (2018-19), and is currently serving as the Chairman-Eastern Region of FICCI.

Dilhan C. Fernando, the CEO of Dilmah Tea, is also the Director of the Dilmah School of Tea – the first international school of tea. Driving innovation in tea, Dilhan has taken tea beyond a cup with Dilmah in tea mixology and gastronomy; from pioneering tea inspired dining concepts to hosting global competitions such as, the “Tea Inspiration for the 21st Century” culinary competition, he has challenged Tea Aficionados from around the world to reimagine tea as an ingredient for morning, afternoon and evening. In addition, he also manages the humanitarian and environmental outcomes of Dilmah and is the Chairman of the United Nations Global Compact in Sri Lanka, a corporate sustainability initiative by the UN.

Dilhan currently chairs the Biodiversity Sri Lanka Platform which was pioneered by Dilmah Conservation together with the Ceylon Chamber of Commerce and IUCN (International Union for Conservation of Nature).

 

 



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Cinnamon Air resumes daily scheduled flights in Paradise

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Cinnamon Air, Sri Lanka’s premier domestic airline, has resumed daily scheduled flights after a temporary suspension during the COVID-19 pandemic. The airline is the only domestic carrier in Sri Lanka offering daily scheduled flights and the only such airline to operate flights from the Bandaranaike International Airport (BIA) with a dedicated passenger terminal and aircraft maintenance facility.

As the airline resumes its daily scheduled flight operation from 15th December 2022, the entire Cessna 208 fleet of Cinnamon Air will operate to destinations such as Sigiriya, Castlereagh, Trincomalee, Batticaloa (serving Pasikudah), Koggala and Weerawila from (BIA) and Water’s Edge Colombo. The daily scheduled flights were temporarily halted during the pandemic due to the sharp decline in tourist arrivals (the key source of demand for the airline) to the country.

However, while strictly adhering to health and safety protocols, the charter flight service continued without disruption. During this period of reduced demand, Cinnamon Air geared itself to better serve its customers through streamlining operations by relocating to a new state-of-the-art aircraft maintenance facility (hangar) at BIA, which is in close proximity to its passenger terminal. As visitor arrivals improve, the airline is expected to be the preferred choice for safe and convenient mode of travel for tourists to swiftly reach popular destinations within the island.

Regarding the resumption of the scheduled flight operation, Sean Dwight, the Chief Executive Officer of Cinnamon Air, commented, “We have been a premier mode of transportation to many individuals visiting Sri Lanka, enabling them to reach popular destinations throughout Sri Lanka in a hassle-free manner at a fraction of the travel time.

To ensure smooth connectivity with our flights, without long transit times, we have synchronized our flight times with the arrival and departure times of Sri Lankan Airlines and other major international airlines. He continued, “as the tourism industry in Sri Lanka is regaining its volumes, we are poised to add value to foreign travelers’ experience in Sri Lanka through our scheduled flights which, in turn, will enhance the image of the country as an upmarket tourist destination. In fact, our passengers consider us as an attraction in addition to being a mode of travel due to the unique experience of taking off and landing on water as well as the breathtaking aerial views of Sri Lanka. Further, in order to ensure that our travelers have a safe and enjoyable travel experience, we have health and safety protocols in place, on board as well as prior to boarding the flight”.

Cinnamon Air (www.cinnamonair.com), owned and operated by Saffron Aviation (Pvt) Limited, is a joint venture between Sri Lanka’s largest listed conglomerate, John Keells Holdings PLC, MMBL Leisure Holdings (a part of the Mercantile Merchant Bank Group) and Phoenix Ventures (parent of the Brandix Group). In addition to scheduled flights, Cinnamon Air also offers charter services to and between all Airports and Water Aerodromes in Sri Lanka. Furthermore, all Cinnamon Air scheduled flights operate in codeshare with Sri Lankan Airlines, consequent to which they are also available for sale throughout the Sri Lankan Airlines network and all Travel Agents around the world via Global Distribution Systems, under a “UL” designated flight number.

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Earnings from merchandise exports decline for first time since March

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External Sector Performance – October 2022

Earnings from merchandise exports declined in October 2022, on a year-on-year basis, for the first time since March 2022, mainly due to lower earnings from garments exports. The decline in import expenditure continued in October 2022, (y-o-y), for the eighth consecutive month, despite recording an increase, compared to September 2022.

The merchandise trade deficit recorded a notable contraction in October 2022, compared to the previous year. Meanwhile, the workers’ remittances steadied and earnings from tourism improved in October 2022, whereby earnings from tourism crossed over USD 1 bn during January-October 2022, while workers’ remittances reached about USD 3 bn during January-October 2022. Foreign investment in the government securities market and the Colombo Stock Exchange (CSE) recorded a marginal net inflow during October 2022. The Central Bank continued to provide forex requirement to finance essential imports, exhausting the liquid level of gross official reserves. Meanwhile, the weighted average spot exchange rate in the interbank market remained around Rs. 363 per US dollar during the month .

Merchandise Trade Balance and Terms of Trade

Trade Balance: The deficit in the merchandise trade account narrowed to US dollars 285 million in October 2022, compared to the deficit of US dollars 502 million recorded in October 2021, despite it widened compared to September 2022. The cumulative deficit in the trade account during January-October 2022 recorded at US dollars 4,389 million, declined from US dollars 6,501 million recorded over the same period in 2021. The major contributory factors for the decline in the cumulative trade deficit are shown in Figure 1.

Terms of Trade: Terms of trade, i.e., the ratio of the price of exports to the price of imports, deteriorated by 4.0 per cent in October 2022, compared to October 2021, as the increase in import prices surpassed the increase in export prices.

Performance of Merchandise Exports1

Overall exports: Earnings from merchandise exports declined by 11.9 per cent in October 2022, over October 2021, to US dollars 1,051 million for the first time since March 2022. Meanwhile, export earnings in October 2022 recorded a decline for the second time on month-on-month basis. A decline in earnings was observed in industrial and agricultural exports, driven by lower demand mainly for garment exports due to increased global inflation conditions, while a marginal increase was recorded in mineral exports. Cumulative export earnings during January-October 2022 increased by 8.9 per cent over the same period in the last year to US dollars 11,032 million, which was mainly driven by the improvements in industrial exports.

Industrial exports: Earnings from the export of industrial goods declined in October 2022 by 13.4 per cent, compared to October 2021, mainly due to the decline in the exports of garments by 12.9 per cent, food, beverages, and tobacco by 51.3 per cent (primarily, miscellaneous food preparations) and transport equipment by 60.7 per cent (due to the base effect of exporting cruise ships in October 2021). Exports of garments to most of the major markets recorded a decline (the USA, the EU and the UK). Further, earnings from exports of petroleum products that comprise bunkering and aviation fuel also declined due to lower export volumes despite a notable increase in average export prices in line with higher global fuel prices.

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CSE’s net foreign inflows cross Rs 20 billion mark

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By Hiran H. Senewiratne

The CSE remained bearish yesterday with net foreign inflows year to date crossing more than the Rs 20 billion mark, while both indices began the fresh week positively, stock market analysts said.

Amid those developments the stock market was positive throughout the day, because China has expressed its interest in debt restructuring for Sri Lanka. It has invited the IMF delegation to begin a discussion, market analysts said.

Both indices showed an upward trend. The All- Share Price Index was up by 72.7 points and S and P SL 20 up by 43.6 points.

Turnover stood at Rs 3.1 billion with two crossings; those crossings were reported in Expo Lanka Holdings, which crossed 2.3 million shares to the tune of Rs 403 million and its shares traded at Rs 205 and John Keels Holdings 2.9 million shares crossed to the tune of RS 427 million with its shares trading at Rs 147.

In the retail market top five companies that contributed to the turnover were; Browns Investments Rs 626 million, Expo Lanka Rs 289 million, Dialog Rs 169 million, Lanka IOC Rs 142 million and LOLC Holdings Rs 118 million.

It is said that high net worth and institutional investor participation was noted in Expo Lanka Holdings.

Mixed interest was noted in Lanka IOC, Aitken Spence and JKH, while retail interest noted in Brown Investments, LOLC Finance and SMB Leasing.

The transport sector was the top contributor to the market turnover on account of Expo Lanka holdings.

During the day 149.5 million share volumes changed hands in 23000 transactions.

Yesterday, the US dollar parity rate was Rs 371.75.

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