The cost of the crisis
Cup of milk tea to cost 100 rupees more in Sri...
ECONOMYNEXT – The price of a cup of milk tea in Sri Lanka shot up by 100 rupees on Sunday (20) after importers raised milk powder prices the previous day.
Media reports quoting All Island Canteen Owners Association President Asela Sampath said the price of a cup of milk tea was increased taking into consideration rising prices of essential commodities including sugar.
Milk tea — a mix of hot, strong tea with powdered milk and usually sugar — is a favourite beverage in Sri Lanka consumed by nearly all socioeconomic demographics.
The price of milk powder, an essential commodity in Sri Lanka, shot up by 250 rupees and 600 rupees per 400g and 1kg pack respectively on Saturday.
According to the Milk Powder Importers’ Association, a 400g pack will now be sold at 790 rupees while a 1kg pack will be sold at 1,945 rupees.
Milk powder is widely consumed in Sri Lanka in place of fresh milk and is recognised as an essential food item. However, the prevailing economic crisis had led to shortages in imported milk powder leading to long queues for the product, with importers demanding a price hike amid an artificially pegged foreign exchange regime.
The last milk powder price revision was in December 2021 — 400g by 60 rupees and 1kg by 150 rupees — but importers had persisted in their demand for a steeper increase claiming that it wasn’t enough.
Sri Lanka is currently going through one of the worst economic crises in its history and, though the currency has been floated, the prevailing dollar shortage continues to see queues across the island for essentials including fuel. (Colombo/Mar20/2022)
Sri Lanka fuel crisis to ease with India shipments, Jet fuel...
ECONOMYNEXT – Sri Lanka is expecting severe fuel shortages to ease with shipments from an Indian credit line beginning to come, Ceylon Petroleum Corporation Chairman Sumith Wijesinghe said, as the island nation reels from forex shortages triggered by money printing.
“From the Indian credit line, we get all the finished products, such as petrol, diesel and Jet fuel,” Wijesinghe said in a recorded statwment.
“We have already received jet fuel on the last 13 and 14. We received another diesel ship which will start unloading tomorrow.”
Wijesinghe said the public seems to be stocking up on fuel, while there is also a demand for generators with daily power cuts of up to 5 hours.
“The daily demand for diesel was 5,500 metric tonnes and 3,300 metric tonnes for petrol (before the crisis),” Wijesinghe said in a video statement.
“Now due to the excess buying we see in the country we have been issuing 7000-8000 MT of diesel and 4200-4500 MT of Petrol from CPC storage to the market in the past few days.”
In recent weeks Sri Lanka has been unable to unload ships which had brought oil to the country due to forex shortages with the central bank printing money to keep interest rates down.
The newly printed money has set off cascading credit, with a high budget deficit, triggering domestic demand and non-oil imports.
“There is a 92-octane petrol ship is unloading in Muthurajawela which will be completed tonight,” Wijesinghe said.
Another Jet-A1 ship and a diesel ship in Colombo port has started unloading and also there are two other diesels and a Jet-A1 Ship to unload in ports.”
Petroleum Minister Gamini Lokuge told reporters separately that there were delays in issuing fuel to the provinces due to unloading to the Muturajawela complex, which was not connected to the rail network.
Fuel distribution last week was also hit by a industrial action by tanker owners, after fuel prices were raised after the currency collapsed from 203 to 275 to the US dollar so far.
India is giving a 500 million dollar credit line for oil as forex shortages intensify. Another billion dollar credit for food and medicine was also signed.
Classical economists and analysts have urged legislators to change the governing law of the central bank to reduce its discretionary independence to print money and operate an intermediate regime, putting an end forex shortages, currency high inflation and social unrest. (Colombo/Mar19/2022)
Sri Lanka schedules power cuts over 3 hours for March 20
ECONOMYNEXT – Power cuts of 3 hours and 15 minutes for some areas in Sri Lanka in blocks, 1 hour and 15 minites for other areas were approved for Sunday March 20, the Public Utilities Commission Chairman Janaka Ratnayake said as a forex crisis creates power shortages in the dry season.
Areas ABCDEFGHIJKL will have a 2 hour power cut from 0900am to 0500pm and another 1 hour 15 minutes from 0500pm to 1000pm, on Sunday.
Areas PQRSTUVW will have power cuts of 1 hour and 15 minutes from 4.30pm to 9.30pm.
Download the power cut schedule for March 15 Sunday from 20-03-2022-Power-Interruption-Schedule-full
Sri Lanka is facing forex shortages due to money printed to keep interest rates low and the country has run out of reserves and the currency has been floated.
However the float has not yet taken place and the rupee has fallen from 203 to 275 to the dollar and prices are getting validated at that level. (Colombo/March 19/2022)
Milk powder prices in Sri Lanka spike again
ECONOMYNEXT – The price of milk powder, an essential commodity in Sri Lanka, shot up by 250 rupees and 600 rupees per 400g and 1kg pack respectively on Saturday (19), an industry source said.
A spokesperson for the Milk Powder Importers’ Association told EconomyNext that, following the price revision, a 400g pack will be sold at 790 rupees while a 1kg pack will be sold at 1,945 rupees.
Milk powder is widely consumed in Sri Lanka in place of fresh milk and is recognised as an essential food item. However, the prevailing economic crisis had led to shortages in imported milk powder leading to long queues for the product, with importers demanding a price hike amid an artificially pegged foreign exchange regime.
The last milk powder price revision was in December 2021 — 400g by 60 rupees and 1kg by 150 rupees — but importers had persisted in their demand for a steeper increase claiming that it wasn’t enough.
Sri Lanka is currently going through one of the worst economic crises in its history and, though the currency has been floated, the prevailing dollar shortage continues to see queues across the island for essentials including fuel. (Colombo/Mar19/2022)
Paper shortages force schools in Sri Lanka’s western province to postpone...
ECONOMYNEXT – A paper shortage in cash-strapped Sri Lanka has led to final term tests for grades 9, 10 and 11 in Western province schools being postponed until after the April holidays, with tests for grades 6, 7 and 8 to be held at the school level.
Western province Provincial Director of Education Priyantha Srilal Nonis writing to zonal directors of education on Friday (18) said third party printers are finding it difficult to print school exam papers due to shortages and price increases in paper and other materials.
Sri Lanka is going through one of the worst economic crises in the country’s history, with a sever dollar shortage leading to shortages in many imports including paper.
Final term tests for grades 9, 10 and 11 would therefore have to be postponed to the next school term, and amended timetables will be provided, Nonis said.
For grades 6, 7 and 8, schools in the western province that can hold exams based on the provincial department-issued question papers can go ahead with the existing timetable, and soft copies of the papers have already been sent to the zonal education office. However, schools that are unable to do so must come up with their own question papers and timetables.
Criticising the decision, Sri Lanka including Ceylon Teachers’ Union (CTU) general secretary Joseph Stalin told reporters on Friday that children have had to pay the price for what he said was the government’s economic mismanagement.
“There are no text books either. The books should’ve been printed before January. They haven’t done their job,” he said. (Colombo/Mar19/2022)
Sri Lanka shares up from 1-wk low in thin trade
ECONOMYNEXT – Sri Lanka stock gained on Friday (18) due to some bargain hunting for the first time in five straight session as negative sentiments over economic uncertainties worsened after the currency depreciation, brokers said.
The main All Share Price Index (ASPI) gained 1.28 percent or 131.28 points to close at 10,35.83, recovering from its lowest since March 9.
Analysts said they see a slow down in the decline and that bargain hunters were entering the market.
“But the volumes are low and still the market expects further slowdown,” a market analyst said.
“Corporate and other taxes are expected to rise with Sri Lanka going to IMF. So the index will further come down.”
Sri Lanka has decided to seek IMF assistance to face the economic and debt crisis.
The market turnover was 1.4 billion rupees, around a quarter of this year’s average daily turnover of 5.5 billion rupees.
Analysts predict some investors to move into fixed assets with the return on risk free government bonds expected to move above 13 percent and while 5-year maturities expected to rise above 15-percent.
Sri Lanka’s rupee has fallen over 40 percent since the devaluation on Tuesday (08).
All commodity prices in Sri Lanka are on the rise due to the currency fall. Currency dealers expect more depreciation in the coming days.
S&P SL20 of the most liquid stocks up 1.82 percent or 64.05 points to 3,588.11 points.
Rising oil prices, policy rate hikes, a slowing economy, and shortage of dollars, fuel, and cooking gas along with extended power cuts continues to dampen the sentiment.
The market has lost 10.5 percent so far in March after falling 11 percent in the previous month. Overall the market has lost 15.3 percent so far this year after being one of the world’s best stock markets with an 80 percent return last year.
Foreign investors bought a net 65.9 million rupees worth of shares. So far this year, the market has witnessed a total foreign outflow of 2.4 billion rupees.
Market heavyweight John Keells, Expolanka and LOLC pushed the main index up on Friday.
Shares in John Keells rose 3.1 percent to close at 156.60 rupees a share while the Market heavyweight Expolanka closed up 3.4 percent at 259.50 rupees a share.
LOLC Holdings gained 3.4 percent to close at 801.75 rupees a share. (Colombo/March18/2022)
No conditions for Indian loan, SL has to pay back in...
Marxist youth in Sri Lanka protest outside president’s office, attempt break-in
ECONOMYNEXT – Marxist youth affiliated with the opposition Janatha Vimukthi Peramuna (JVP) protested the government’s handling of Sri Lanka’s worsening economic crisis on Friday (18) outside the president’s office, culminating in some protestors attempting a break-in.
The JVP-affiliated Socialist Youth Union (SYU) marched from the Maradana Technical Junction to the Presidential Secretariat in Colombo Friday morning, carrying placards and shouting slogans against the ruling Sri Lanka Podujana Peramuna (SLPP), President Gotabaya Rajapaksa and others.
Sri Lanka is going through one of the worst economic crises in the country’s history as a severe dollar shortage has led to daily power outages and long queues for essentials including fuel. The protestors also demanded the cancellation of a power deal with a US energy company and a deal with India to manage a decades-old oil tank farm in the Eastern district of Trincomalee.
Reports said a group of protestors had broken into the presidential secretariat causing a commotion. However, the situation seemed to have been brought under control by mid afternoon by which time the protest had ended.
Organiser Eranga Gunasekera could be heard calling to the youths connected to different political parties to join the SYU.
“The youth of the SLPP who have gotten the boot can come join the JVP. The youth that want to get the boot can stay with SJB.”
On Tuesday (15), the main opposition Samagi Jana Balavegaya (SJB) led a protest march that saw thousands of party supporters gathered outside the presidential secretariat in a similar expression of apparent anger towards the government. (Colombo/Mar18/2022)
