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| Pramuka
crisis Palitha Gamage, President, Pramuka Stakeholders' Association, told reporters last week that the attitude of the Central Bank to hide behind technicalities and confidentiality, when everybody else is concerned in restructuring Pramuka is deplorable. K.C. Vignarajah, whom the Supreme Court has nominated to assist in Pramuka restructuring, took strong objection to some of the statements given to the press, recently by the Central Bank and said that they were factually incorrect. He told The Sunday Times FT that he was unaware about the four expressions of interest received by the Central Bank, when told of the offers. He said the Monetary Board is obliged to view these expressions in consultation with him, according to the Supreme Court order. Vignarajah pointed out that the Central Bank selecting a holiday - Poya on Wednesday, September 10 - as the closing date of receiving expressions of interest itself showed its disinterest in the restructuring. The Central Bank's Bank Supervision Division rejected charges made by the depositors and their lawyers that the Central Bank has violated judgments of the Appeal and Supreme Courts or that it was slowing down the process. Referring to allegations that Vignarajah was not consulted in perusing the restructuring proposals, she said: "… individual parties making proposals make them in confidence to the CBSL being the authority to receive such proposals and would not want their identities or the nature of their proposals revealed or discussed with anyone else." The bank has so far received four proposals, of which two parties have later said they were not interested. The other two parties are a foreign bank and a professional organization. The spokesperson said they were still willing to accept a proposal from the depositors' association. She said if the current proposals were, after scrutiny found to be not viable, then the only option left is liquidation which, if resorted to, could be done in the shortest time frame. Asked whether the Central Bank could guarantee the depositors that more than 50 percent of their deposits could be obtained after liquidations, she said "How much the depositors will receive, will depend on how much value is obtained from the available assets of the Pramuka Bank". Plantation
firms struggle with low prices, high costs Planters' Association of Ceylon (PA) chairman Rohan Fernando said RPCs were trying to reduce costs and improve quality to get better prices and lobby the government to refrain from forcing them to give wage hikes to workers. "High grown prices are the lowest in the last five years while costs have been escalating," Fernando said. "Estates have been incurring fairly big losses. So they are facing cash flow difficulties." Average prices for Ceylon tea have failed to exceed $2 per kg for the past 18 years, the PA said in a statement. "The full effects of increases in virtually all production inputs over the past one year, with higher labour costs being a notable contributor, are now reflected in the half year results of several companies," it said. Drawing attention to financial statements published over the last weekend of August, Planters' Association Secretary General Malin Goonetileke said: "While revenues have fallen due to the lower prices for high grown teas, the declines in profit growth have been much sharper, and in the case of loss-making companies, these losses have grown substantially." He cautioned that weekly market reports from tea brokers on the demand for a few selected categories of tea and good prices for a handful of high performing marks could mask the reality of low averages in real terms. A significant recent trend was that rupee price averages for high grown teas in the January - July period have remained static for the past three years, notching Rs. 134.29 in 2001, Rs. 131.70 in 2002 and Rs. 132.66 in 2003. Added to this, high grown production has also declined in the first half of this year due to excessive rains. Meanwhile,
cost of production (COP) at all elevations continues to appreciate.
Trade
gap narrows - Central Bank "This reduction, together with increased foreign exchange inflows due to the growth in tourism, port services, private transfers and capital account flows, strengthened the stability in the exchange rate and increased foreign exchange liquidity," it said in a statement. This enabled the Central Bank to purchase $201 million from the market during the first seven months of 2003. The cumulative export earnings during the first seven months of 2003 increased by 18 percent, in contrast to the drop of 15 percent in the comparable period in 2002. Similarly, cumulative imports increased by eight percent to $3,694 million over the same period as against a decrease of seven percent in 2002. In July, expenditure on imports, amounting to $616 million, increased by 13 percent, compared with imports amounting to $543 million in July, 2002. "This was the highest recorded import bill for a month so far in 2003," the Central Bank said. Export earnings in US dollar terms increased by 15 percent to $493 million in July, 2003 in contrast to a decline of five percent in July, 2002, with all major industrial subcategories and tea contributing to this growth.
Earnings from textile and garment exports increased by seven percent to $251 million in July, 2003 the highest recorded value for a month so far in 2003. Other industrial exports that supported the export growth were rubber-based products (33 percent), machinery, mechanical and electrical equipment (11 percent), crustaceans and molluscs and other fish products (28 percent), diamonds (13 percent), plastics and tableware (27 percent each ) and chemicals (34 percent). However, earnings from petroleum products fell by 28 percent and travel goods by 51 percent over July, 2002. |
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Dashing
coconuts, invoking the Gods 
