Ceylon Today Editorial

Quo vadis tea?

27 January 2017

Sri Lanka's tea exports marginally increased by Rs 2.65 billion (1.46%) to Rs 184.7 billion, year on year (YoY) last year, Forbes & Walker (F&W) on its latest weekly tea report, said.

But in US dollar terms export earnings have had retreated. Whereas, tea exports fetched US$ 1.26 billion in 2015, but, on a YoY basis it has had depreciated by $ 0.03 billion (2.38%) to $ 1.23 billion by last year end.

Tea export volumes in the review period declined by 18.2 million kilos (5.93%) to 288.7 million kg. The decline in volumes may at least in part be due to the prolonged drought that gripped the country for the greater part of last year.

Sri Lanka tea production totalled 292.36M/kg, showing a decrease of 35.81M/kg (10.91%) vi-a-vis 328.17M/kg in 2015, data showed.

'This records the lowest production since 2009 when the total production declined to 288.8M/kg,' F&W said. The decline in tea in 2009 was due to a strike by plantation workers.

Complementing these developments, 'Sri Lanka tea exports last year totalled 288.7M/kg vis-à-vis 306.9M/kg in 2015, showing a decrease of 18.2M/kg (5.93%). This records the lowest export volume since 2002 where total exports declined to 287.2M/kg,' F&W said.

It may therefore be seen that the increase in the rupee export value of tea is not due to a price increase in tea in the global market or due to increased volumes, but due to the depreciation of the rupee against the dollar.

Data showed that the market rate of the dollar in interbank trading fell steeply by Rs 6.03 (4.18%) on a YoY basis, last year.

Over 40% of Sri Lanka's tea exports comprise the low, value added, tea in bulk form as opposed to the higher, value added teas such as 'tea in packets.' YoY, bulk tea exports on a percentage basis, volume wise, as a total percentage of exports, increased from 43.25% (132.75 kg) to 43.36% (125.2 million kg) last year.

On the positive side, exports of 'tea in packets,' increased from 43.25% (132.75 million kg) of total exports to 46.52% (134.32 million kg) last year. The average price difference between tea in bulk and tea in packets, in favour of the latter is Rs 41.74 (7.58%), with 'bulk' fetching a price of Rs 550.75 a kg, as opposed to 'packets' (Rs 592.49 a kg) last year.

'Tea in bulk' and 'tea in packets' comprised between 85% and 90% of total tea exports in the reference years, with this number in 2015 being 86.40% and last year (89.88%), respectively.

The balance 10% to 15% of teas is exported in a much higher value added form. For instance, the average price of a kg. of 'tea in bags' last year was Rs 1,191.55, 'instant tea' (Rs 1,215.98) and 'green tea' (Rs 1,508.73) respectively.

These prices are higher by 116.35% vis-à-vis 'tea in bags' versus 'bulk', 120.79% ('instant tea' vs. 'bulk') and 173.94% ('green tea' vs. 'bulk') respectively.

And, in relation to 'tea in packets', those prices were higher by 101.11% over 'tea in bags', 105.23% over 'instant tea' and 154.65% over green tea, respectively.

Sri Lanka's main export markets last year were Russia, Iran, Iraq and Turkey, in that order, respectively. Among the other major buyers of 'Ceylon' tea were UAE, Libya and Syria, F&W said. These have been Sri Lanka's major markets for a number of years. All of these markets are black tea drinkers. Those are also oil export economies, though the UAE, assisted by Dubai is also a large export services market. Further, with the exception of the UAE, Iran and Russia, the other importers are riddled by internal conflicts. It was only last year that Iran got over its sanctions problems, though Russia continues to be dogged by western sanctions following its annexation of the Crimea from Ukraine.

These are not markets that 'Ceylon Tea' can be 'happy' with, say, compared to, garments, which major markets are the 'rich' west. Meanwhile, 'green tea', the premium tea product, is essentially led by the Far East. But such tea exports, volume wise, comprised a mere 1.46% of total tea exports last year.

These are among some of the matters that may need to be taken to consideration if 'tea export' is not to suffer the same fate as coffee.

Tea was Sri Lanka's number one foreign exchange (FX) earner at least till 1977. But, with the opening up of the economy and the diversification of the country's export basket, it has since been relegated to the fourth position.

Rupee conversions are based on the more popular, market determined FX instrument in interbank trading which was the 'spot', as at the last day of trading in 2015, whereas, as at end last year, it was the 'one week's forward price of the US dollar.

The 'spot' price closed in 2015 at Rs 144.22 to the dollar, while 'one week's forwards' closed last year at Rs 150.25 to the dollar, a Rs 6.03 (4.18%) YoY depreciation. 'Spot' trades are settled after two market days from the date of transaction. Normal markets, divorced of exchange controls, operate on 'spot.'

Daily News Editorial

Empowering the estate community

27 January 2017

Prime Minister Ranil Wickremesinghe has said that the government was planning to provide a seven perch land plot to each estate family. This is with a view to settling this community in the same estate environment they have been living for generations, performing their labour. The estate workers, sad to say, are still confined to their hovel like line rooms from the times of their colonial masters. More often than not, large families live in cramped conditions, confined to a few square feet, with nothing to call as garden space. Hence this indeed is a welcome move that would give these toiling workers some breathing space.

The Premier also said, steps are also underway to improve the education standards of the plantation youth and science teaching facilities would be upgraded to the students in the estate schools since they don't have access to science subjects. Addressing the fourth Ministerial Consultation of the Abu Dhabi Dialogue in Colombo the Premier said the government wants to motivate youth in the estate sector to move out from the estates and look for other jobs.

Premier Wickremesinghe is perhaps the first Lankan leader who spoke on the need for upward mobility of the estate youth by breaking out of their cloistered and drab existence. He may perhaps not have won many friends among the plantation sector politicians for his forthright views. These politicians have been able to hoodwink the estate community all these years primarily due to the ignorance and backwardness of their community. The estate community has long been taken for granted by these politicians who know very well that their humble brethren could be fooled easily with empty rhetoric. Any moves to enlighten them by imparting an education, no doubt would be frowned by these politicians. What they desire is to keep their minions in unenlightened darkness, lest they get wise to their crafty machinations.

The estate workers down the years have been an exploited lot, both by the British colonialists and the brown sahibs that took their place. They took good care to ensure that these pathetic souls remain tied to the estates and thus remain in perennial bondage. They feared any type of exposure to the outside world, lest this gave them “ideas”.

This was the same modus operandi pursued by plantation sector politicians of the post Independence era. Exploiting their ignorance and poverty, these politicians portrayed themselves as Messiahs who had come to deliver their community out of their predicament. In this way they were able to hold the estate community to ransom and what is more, as bargaining chips during national elections. The community was sold to the highest bidder, so to speak. These wretched souls were virtually kept in thrall of their political masters and what is interesting is they were ready to be the willing tools of the machinations of these politicians - all because they were uninitiated and kept in the dark.

The Messiahs of the Thottams of course thrived on the ignorance of this segment of our community who worked their hands raw day in day out to keep the wheels of the economy running. They exploited the workers to acquire ministerial office, under all regimes, always justifying their treacherous actions to ensuring the welfare of their community whereas in actual fact the power of office was used for self advancement and other indulgences, all at the expense of the ignorance of their charges.

It is time that the estate community were delivered out of their bondage and redeemed from their present status as supplicants. All the opportunities should be made available for their emancipation from the state of a backward and exploited community. They should be allowed to live with dignity and self respect, banishing altogether the public image of them as serfs and vassals. It is a fact that the estate community had all along lived in isolation, cut off from the mainstream activity. They have been living largely shunned and unsung quite in contrast to their contribution to the country's economy.

Only during an election that the estate community comes into the equation for their bloc vote sought by the main political parties. This fact is exploited by the estate politicians for personnel gain. Little or no efforts have been made to uplift their lives by these politicians who dish out the votes for lucrative returns. Hence the estate workers have been condemned to live like pawns of the politicians.

The Government's plans to uplift the lives of this community who are inextricably linked to the country's economy should therefore be appreciated. The estate workers, particularly the youth, should be made to think out of the box. There certainly are talented, industrious material in the estates who have fallen by the wayside due to lack of opportunity. We hardly hear of doctors or engineers being produced by the estates, unlike their counterparts in the North. The government's measures to provide the necessary wherewithal to the estate community to stand up on their feet, it is hoped, would come to fruition, undoing the shackles that has placed them in bondage all these years.

The Island Editorial

Kos kola kolam* of thoththa baba govt.

27 January 2017

 

Co-Cabinet Spokesman, Dr. Rajitha Senaratne addressing the media on Wednesday, tore into a high-up in the Agricultural Department for suggesting that the public eat croton and kos kola (jak leaves) as food substitutes; he said if he had been the Minister of Agriculture he would have got that official to consume kos kola without recommending it to others. We believe that before shoving kos kola down anyone else’s throat, the government ministers, Senaratne included, should partake of it in sufficient quantities if they think they can ‘fool all the people all the time’.

Senaratne had the audacity to claim that Prime Minister Ranil Wickremesinghe had attended a recent tyre factory launching ceremony in Horana without any knowledge of the background of its owner! And, in the same breath, he added, on being questioned by a journalist, that the PM had got to know the businessman for what he really was—a frontman for the Rajapaksas—only on the morning of the day of the ceremony and a no-show at the event would have amounted to an act of discourtesy! He blamed some ministers for having misled the PM, but refused to name them. He seems to have taken people for suckers.

One is intrigued. Even if the PM had been informed of the track record of the entrepreneur concerned only one hour before the event at issue, he should have decided against attending it and told the public the reason for his decision.

It is hard to believe that the PM had been in the dark about the background of the Horana investor, who had been accused by his own government of having purchased shares of foreign hotels for the former ruling clan. President Maithripala Sirisena, also, claims from time to time, that he is not aware of certain issues. Are we to gather from the Cabinet Spokesman’s tall stories about the Horana factory that we are being ruled by a bunch of thoththa babas or babes in arms?

The dental surgeon turned Health Minister, pretending that what he was telling the media was the ‘tooth’, the whole ‘tooth’ and nothing but the ‘tooth’, went on to claim the Horana entrepreneur was investing the Rajapaksas’ money in his factory. If so, it is a blatant act of money laundering. Why hasn’t the FCID arrested him? Who is shielding him? The ministers who ‘misled the PM’ on behalf of Rajapaksas’ ‘frontman’ must also be arrested for aiding and abetting the crime!

Asked by a journalist why Arjun Aloysius of Perpetual Treasuries fame had not been arrested for the Central Bank bond scams, Senaratne gave a yanne-koheda-malle-pol (totally irrelevant) answer. Aloysius had been a friend of Namal Rajapaksa, Senaratne claimed. If so, then that is all the more reason why the incumbent regime antipathetic towards the Rajapaksas should have him arrested forthwith. Does the government think the masses are as stupid as kos kola-eating goats to buy into its cock-and-bull stories?

If there are corrupt elements in the garb of ministers as Senaratne has told the media then the entire Cabinet must be made to pay for that. Sprint legend, Usain Bolt, will lose one of his Olympic gold medals because a team mate in Jamaica’s gold winning quartet has tested positive for a banned substance. That is what collective responsibility is all about.

How can the government call itself a yahapalana administration while having corrupt ministers within its ranks?

If the thoththa baba regime has no answers to media queries and/or lacks ministers to defend it in a convincing manner, it had better cancel the weekly post-Cabinet briefings without letting its spokesmen make facetious remarks and cut pathetic figures in the process besides wasting journalists’ valuable time.

Even the rib-ticklingly hilarious Charlie Chaplin shows have more gravitas and send across more meaningful messages than kos kola kolam aka the Sirisena-Wickremesinghe government’s media briefings.

* Kolam is a form of non-ritualistic folk theatre in Sri Lanka.