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Gulf war hits Ceylon tea exports Prices of Ceylon
tea, Sri Lanka's main export commodity, plunged at the Colombo auctions
last week while exports of fruits and vegetables to the Middle East
were disrupted following the outbreak of hostilities against Iraq
as the government braced itself to meet the shock of the war on
the economy. The market
for low grown teas, much in demand in the Middle East, crashed at
Tuesday's auction with about half the catalogues remaining unsold
as buyers held off owing to uncertainty created by the war against
Iraq. "The situation
is pretty bad," said Hasitha de Alwis, acting director general
of the Sri Lanka Tea Board. The worst hit
were small leaf grades, which fell by as much as Rs. 15 per kg. "The market
has crashed and it is likely to fall further," said Herman
Gunaratne, a private tea factory owner who makes black tea from
green leaf supplied by small holders. He warned that
the crisis could create social problems in southern villages, where
low grown teas are cultivated mainly by small holders who now produce
over half the island's crop. De Alwis said
buyers were holding off as they believed the market could fall further. The government
had offered support to the industry to buy and store unsold teas
until the crisis was over. "We addressed
the problems of small holders who are suppliers of green leaf -
if not it will become a social problem with the New Year coming
up," de Alwis said. The Tea Board
had recommended that growers rest the bushes for a month without
plucking and to start pruning in May when the rains start. "So if they could rest at least one-third of the acreage then there'll be a proportional drop in production and supplies into the auction will go down during this difficult period. In May they can start pruning, wait for 45 days to start plucking again by which time we expect the war to stop and reconstruction to start," de Alwis said. "Then from July we'll get much better quality after pruning and a bigger harvest." The government
has also promised relief to green leaf supplier on the basis of
the acreage rested. Anil Cooke,
senior vice president of Asia Siyaka Commodities, said buyers in
the Gulf were being cautious as "no one wants goods on the
water and arriving at certain ports. People say why take a risk
in the first week of the war." However, he
said demand would revive once the situation was clearer as consuming
countries did need tea. "Many
buyers chose to remain quiet and watch the situation. Those who
were operating were able to get teas cheaper. Teas in Colombo now
would look very attractive to buyers overseas," Cooke said. Demand revived
towards the end of Tuesday's low grown sale as brokers lowered prices "We spoke
with the sellers and took a lower position and sold the teas about
Rs 15-20 lower than in the morning," Cooke said. "As a
result the number of unsold teas fell significantly compared with
the morning. People who were watching have started bidding now." A spokesman for Greenlanka, agents for the Evergreen container line, said all shipments to the Iraqi port of Umm Qasr had ceased with the onset of hostilities. "We're
not going to Umm Qasr which had good tea volumes under the UN oil-for-food
programme," he said. "Otherwise our weekly services are
still going to Dubai and Bandar Abbas." Brokers John
Keells said the outbreak of war in Iraq had a "huge negative
impact" on the auction. Forbes and
Walker said the total sale average for the March 19 sale declared
at Rs.143.79 was a substantial Rs. 18.31 or 11.29 percent lower
when compared with the Rs. 162.10 average returned at the corresponding
sale of 2002. Shipping industry
officials said the war had had no major impact yet. Dilrukshan
Tillekeratne, of the Sri Lanka Association of Vessel Operators,
reported a drop in volumes to the Gulf and the upper Gulf and a
slight drop in CIS cargo moving via Iran. "For Gulf
cargo and cargo transhipped through the Gulf there is an increase
in war risk surcharge to $79 per 20-foor container from $54 charged
previously for Gulf cargo before the war started," he said. However, he
warned that if the war intensified and the Suez Canal closed then
surcharges and costs would be higher as ships went round the Cape. He said there might be a possible benefit to Colombo Port war if container lines decide to suspend direct calls to Gulf ports and tranship cargo through Colombo. "Most of
the transshipment cargo that used to go to the Gulf can be dropped
here if the Sri Lanka Ports Authority gives incentives to the lines,"
he said Ceylon Association
of Ships' Agents chairman Rohan Perera said the lines have not changed
their trading patterns yet. "However,
if the war is prolonged and we find that boxes can't go to the Gulf
then the SLPA could offer incentives like a longer free storage
period to attract cargo for transhipment to the Gulf," he said. He also pointed
out that the 1991 Gulf war did not disrupt shipping. Chairman of
the Sri Lanka Bureau of Foreign Employment Susantha Fernando said
they were monitoring the situation but that there was no immediate
concern over Sri Lankan migrant workers in the Gulf. "We're
watching Kuwait very carefully which we felt was the most vulnerable,"
he said on Friday. "We're getting twice daily reports from
our envoy. The situation is quiet. No one is leaving their homes.
There have been no air raid sirens for the last two days." He said it
was "very unlikely" that there would be major evacuation
problems and if there were, the government would seek the help of
international aid agencies like the Red Cross to bring migrant workers
to safety. There was no
immediate danger to workers in Jordan and Saudi Arabia, the other
two countries bordering Iraq. Ceylinco tops advertising spending rankings Ceylinco Consolidated,
the conglomerate that has interests in property, banking and insurance,
has emerged as the company that spends the most on advertising,
according to a recent survey. The study by
Survey Research Lanka, a market research agency, gave Ceylinco,
whose subsidiary is Seylan Bank, a ranking of 100 in its index of
company advertising expenditure. The second
highest spender was the local unit of the Unilever food and personal
care products multinational, which was given a ranking of 92. Its
products in the local market include familiar brand names like Sunlight,
Signal and Lux. Next came Ceylon Biscuits, manufacturers of Munchee, with a ranking of 43, followed by MTN Networks, the Dialog mobile phone operator whose aggressive full-page advertising has given the firm a high profile. It was ranked 37 on the index. The milk foods multinational Nestle, got a similar rank on the index and was followed by Glaxo Smith Kline, whose best known product locally is perhaps Panadol. Others in the index are the two lotteries boards, Elephant House soft drinks maker Ceylon Cold Stores, Bank of Ceylon and Commercial Bank, Hemas, which markets cosmetics, Clogard toothpaste and Baby Sheramy products, AGH Organisation Ltd, manufacturers of Maliban biscuits, mobile phone operator Celltel and Proctor and Gamble which sells Pantene shampoo, Vicks vapour rub, and detergents. By Quintus
Perera Although under
the terms of the proposed liquidation small investors who deposited
small sums of money - below Rs 5,000 - are to be paid first, the
co-operative society members believe they might not be paid as their
monies have been deposited in a lump sum. Their members are mainly
farmers with deposits of Rs. 2,500 - Rs. 5,000. Their case would
be taken up on April 3 along with the other cases that would resume
hearing. Already, there
are four cases being argued in the Appeal Court against the decision
of the Central Bank to liquidate the Pramuka Savings and Development
Bank Ltd. Meanwhile, despite Pramuka banking operations being suspended
by the Central Bank on October 25, 2002, the employees have been
paid their salaries every month. The monthly
salary bill is around Rs. 4 million and the amount of money spent
on salaries alone so far would be around Rs. 20 million as it is
reported that March salaries were paid on March 26. Some depositors
indicated that they would be contemplating another court case as
they felt that if the salaries of the employees were paid, it would
only be fair that the interest of the deposits that mature should
be paid until Pramuka is actually liquidated. When the Pramuka Bank depositors' cases resumed hearing on Thursday in the Appeal Court, Trial Judge, K. Sripavan inquired from the respondents (Monetary Board) what they were doing between the date of suspension of the activities of the Pramuka Bank on October 25, 2002 and the date the licence to operate was cancelled on December 17, 2002 as various options were available to them to act. He made the
comment during the submissions on behalf of the first respondent
by Additional Solicitor General, Saleem Marsoof, PC. Meanwhile,
the Western Provincial Council is probing the circumstances under
which the Western Province Road Development Authority happened to
deposit its money in Pramuka Bank. The present chairman and the
accountant were questioned on the matter. PLOTE said to be re-broadcasting Sun TV A former Tamil
militant group is surreptitiously downloading the South Indian TV
channel Sun TV and re-broadcasting it in the Vavuniya area, a new
all-island media habits survey has revealed. The study by
Survey Research Lanka, market research agency, has found that, according
to its respondents, watching television has become more popular
than listening to the radio and that the Indian state TV channel
Duradarshan was being watched regularly in the north and east. The bi-annual
media habits survey was done in January-February 2003 in all nine
provinces in what the company said is the first all-island media
habits survey since the Eelam war started. The survey
covered 6,000 respondents over 12 years who read newspapers, listen
to the radio and watch television. It found that
80 percent of respondents have TV sets and that watching television
was now more popular than listening to the radio. Among the interesting
findings is that some viewers in Vavuniya were fans of Sun TV. The South Indian
TV channel was ranked fourth in terms of reach among viewers in
the north and east, with MTV/Shakthi TV topping the list with over
46 percent, followed by Channel Eye (26.67 percent), Duradarshan
(23.27 percent) and Sun TV (11.70 percent). Sources in
Vavuniya said the former militant group PLOTE was downloading the
Sun TV broadcast with a satellite dish antenna and re-broadcasting
it in the Vavuniya area and charging viewers in areas where they
hold sway a monthly rental. David Peiris, RPC in new relationship By Thushara
Matthias "Enough
is enough," David Peiris, chairman of David Peiris Motor Company
Ltd, said in a recent interview. "We are going to see where
we can have synergies and support each other." The two companies,
Richard Peiris and Co Ltd (RPC) and David Peiris Motor Company have
finally decided to put an end to all the hostilities between them
and foster a healthy relationship. The move comes
after David's brother Ian, stepped down from his post of managing
director of RPC after the latter and other family members lost control
of the conglomerate which made a name for itself with its rubber
products. The family
lost control of RPC to Dr. Sena Yaddehige who has now taken over
its management. Henry Peiris who is the cousin of David and Ian,
remains as the chairman of the group. "Now that
we have broken the ice, we have to see how we can work together,"
Henry Peiris said. David Peiris
was a director of RPC and in 1978 set up the motor company as subsidiary
of the RPC group. In a management
buyout in 1994 David Peiris bought the motor businesses of Richard
Peiris Motor Company Ltd and created David Pieris Motor Company.
He said this was because of problems between the senior management
of the two companies. Recently the
two companies together hosted Horizon 2003, a sports festival, as
an inaugural effort to rekindle the healthy relationship between
the two firms. David Peiris
said there are several ways to interact and help both businesses
to grow. For instance, David Pieris Motor Company, with its branches
in Tanzania and overseas contacts, could promote RPC. It could also
buy the necessary rubber and plastic products and furniture and
interior décor items from RPC while RPC could buy their vehicles
from David Pieris Motor Company. RPC was formed by Percy Peiris, father of Ian and David, Percy's brother Richard and two friends. Richard's son Henry subsequently became RPC chairman. |
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