Sri Lanka’s tea exports have dropped to their lowest level in 23 years, official figures showed yesterday, hit by a fertilizer ban and Russia’s war against Ukraine.
Tea is the country’s biggest export commodity, bringing in about US$1.3 billion annually before the current economic downturn, the worst since independence in 1948.
However, a ban on fertilizer imports last year — introduced in a doomed effort to save foreign currency and avoid a debt default — hit growers hard, with production falling 18 percent year-on-year for the period from November last year to February.
Photo: AFP
Customs data showed that first-quarter exports this year correspondingly plunged to 63.7 million kilograms, down from 69.8 million kilograms in the first quarter of last year.
The tally was the lowest since the first quarter of 1999, when the country shipped out 60.3 million kilograms of tea.
Export earnings for the first quarter also declined, to US$287 million from US$338 million.
Tea brokering firm Asia Siyaka Commodities PLC blamed the drop on the agrochemical ban, which was portrayed by the government as a push to turn Sri Lankan farming 100 percent organic.
The ban was lifted by October last year following a backlash from the industry, but farmers were left unable to access imported fertilizer as the country simultaneously ran out of US dollars.
Industry officials added that about 10 percent of Sri Lanka’s tea exports had also been affected by Russia’s invasion of Ukraine. Both countries are top buyers of the country’s aromatic black tea.
The country of 22 million lacks enough foreign currency to finance even the most essential imports such as food, fuel and medicines. Dire shortages and galloping inflation have led to widespread protests calling for Sri Lankan President Gotabaya Rajapaksa to step down.
Sri Lanka plans to replace its “unrealistic” budget and is in talks with the World Bank to extend its support by US$300 million, Sri Lankan Minister of Finance Ali Sabry said yesterday.
The country, hit hard by COVID-19 and short of revenue after steep tax cuts by Rajapaksa’s government, has sought an emergency bailout from the IMF.
“The existing budget is unrealistic, given our challenges,” Sabry told parliament. “We will bring in a new budget that will seek to address core issues of low public revenue.”
Sabry said he wanted to increase tax revenue from 8.7 percent of GDP to 14 percent within the next two years.
Sri Lanka is within the next two weeks to appoint financial and legal advisers for a proposed restructure of its sovereign debt, Sabry said, adding that the government is eager to work with the IMF on structural reforms.
“This is the only way to put the economy on a sustainable footing,” Sabry added.
Additional reporting by Reuters
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in