ENB NEWS 10 02 2008
ENB
All set for LG polls in B'caloa Party campaigns to begin this week
By Ananth Palakidnar
Arrangements to hold the local government polls in the Batticaloa district after nearly fourteen years are now in order with the political parties contesting the local polls
launching their campaigns this week, Assistant Commissioner of Elections, Batticaloa district T. Krishnananthalingam said.
Commenting on the situation with regard to the local polls in the Batticaloa district Krishnananthalingam told the Sunday Observer that 831 candidates from six
political parties including 22 independent candidates would contest the forthcoming local polls on March 10 in the Batticaloa district where 101 members will be
elected for nine local bodies including the Municipal Council of Batticaloa.
The last Mayor of Batticaloa, Chelian Perinpanayagam who was also a journalist was a former editorial staffer at ANCL's Thinakaran prior to his entry into politics.
He was assassinated by unknown gunmen in the late nineties and since then there was no Mayor elected for the Batticaloa Municipal Council, informed sources said.
According to Krishnananthalingam 285 polling stations would be set up and 4,200 staff would be engaged in election activities.
For the first time in nineteen years polling stations would be set up in Porathivupattu, Manmunai South West, Manmunai West and the Koralaipattu North areas.
These were uncleared areas earlier and they were liberated last year from the clutches of the LTTE by the Security Forces.
Krishnananthalingam also said that arrangements are under way for postal voting to be held on February 21 and all other arrangements will be in place before the
March 10 polls.
Security will be tightened and each candidate will get two policemen. The three-party coalition comprising the PLOTE, Eelam People's Democratic Party (EPDP)
and the Eelam People's Revolutionary Liberation Front (Naba) and Tamil Makal Viduthalai Puligal, the breakaway party from the LTTE along with the Sri Lanka
Muslim Congress (SLMC) are expected to have a tight contest in the forthcoming polls.
By Ananth Palakidnar
Arrangements to hold the local government polls in the Batticaloa district after nearly fourteen years are now in order with the political parties contesting the local polls
launching their campaigns this week, Assistant Commissioner of Elections, Batticaloa district T. Krishnananthalingam said.
Commenting on the situation with regard to the local polls in the Batticaloa district Krishnananthalingam told the Sunday Observer that 831 candidates from six
political parties including 22 independent candidates would contest the forthcoming local polls on March 10 in the Batticaloa district where 101 members will be
elected for nine local bodies including the Municipal Council of Batticaloa.
The last Mayor of Batticaloa, Chelian Perinpanayagam who was also a journalist was a former editorial staffer at ANCL's Thinakaran prior to his entry into politics.
He was assassinated by unknown gunmen in the late nineties and since then there was no Mayor elected for the Batticaloa Municipal Council, informed sources said.
According to Krishnananthalingam 285 polling stations would be set up and 4,200 staff would be engaged in election activities.
For the first time in nineteen years polling stations would be set up in Porathivupattu, Manmunai South West, Manmunai West and the Koralaipattu North areas.
These were uncleared areas earlier and they were liberated last year from the clutches of the LTTE by the Security Forces.
Krishnananthalingam also said that arrangements are under way for postal voting to be held on February 21 and all other arrangements will be in place before the
March 10 polls.
Security will be tightened and each candidate will get two policemen. The three-party coalition comprising the PLOTE, Eelam People's Democratic Party (EPDP)
and the Eelam People's Revolutionary Liberation Front (Naba) and Tamil Makal Viduthalai Puligal, the breakaway party from the LTTE along with the Sri Lanka
Muslim Congress (SLMC) are expected to have a tight contest in the forthcoming polls.
After the terror the battle for life begins
What emergency mechanisms are in operation to cope with terror attacks?
Kumudini Hettiarachchi & Dhananjani Silva report
Claymore mines rip apart three buses, one in Weli Oya, another in Madhu and the other in Buttala. A bomb on a bus in Dambulla. A suicide bomber triggers an
explosion at the Fort Railway Station. Tears and trauma and amidst the carnage children, women and men, dead or injured.How does a shattered country cope?
How hospitals cope
Most hospitals cope as best they can and do in difficult circumstances the maximum within their capability. Just two kilometres from the scene of the incident, the
Buttala District Hospital was able to give emergency treatment to around 60 victims with the resources available. Later 50 were transferred to the Moneragala Base
Hospital 14 km away, said Buttala District Medical Officer Dr. Premalal Abeysooriya.
A medical assistant carries a young survivor of a roadside bomb blast that tore through a civilian bus in the Welioya region Added Moneragala's Acting Medical Superintendent Dr. D.C. Priyanath that they coped with the situation as the 390-bed base hospital, with 72 doctors, 250 nurses
and four ambulances, was equipped and could cater to an emergency incident. "Most surgeries could also be performed here except specific operations such as
dental and orthopaedic," he said, explaining that following the Buttala incident, ambulances were called in from nearby hospitals, medical teams were rushed from
Colombo and Mahiyangana and those who required neurosurgical intervention transferred to the Colombo National Hospital.
A few small issues with regard to equipment when dealing with a disaster have already been notified to the authorities, he said. In a different part of the country, the Dambulla bomb blast saw in its wake 96 casualties being rushed to the Dambulla Base Hospital. "Twenty-five in critical
condition were transferred to the Matale and Kandy Hospitals while the rest were treated here," said Medical Superintendent Dr. Sudarshana Arambegedara.
The Dambulla Hospital is prepared to deal with an emergency and has the necessary resources, he said, adding that the moment they hear of an incident the
emergency preparedness plan is activated with a ward being cleared for such casualties.
"Different types of patients varying from critical to manageable are then treated on two different sides of the ward while patients with minor injuries are referred to the
Outpatients Department (OPD)," said Dr. Arambegedara, stressing that the hospital doesn't function as a single unit but as a cluster. "So we get support from Kandy,
Matale and Kurunegala Hospitals within minutes, be it staff or ambulances, if the need arises," he said. Dambulla Hospital was 90% successful in providing medical
treatment in the recent incident, he says with justifiable pride. Among other facilities it has three ambulances and an equipped operating theatre. Although the hospital
has only one surgeon, the MS does not see it as a problem because surgeons can be called in from nearby hospitals within 30 minutes while a patient is being
stabilized and prepared for surgery. The unavailability of neuro and ENT surgeons is also not an acute problem, he said, adding that such patients can be transferred
to Colombo via Kurunegala after two or three days.
A victim from the Dambulla bus blast being wheeled into Dambulla Hospital "We also had the support of the Blood Bank which operates from Colombo as they sent us 75 pints of blood in addition to the stocks we had in the hospital's blood
bank," he explained. Dr. Arambegedara said they have identified certain areas where they need assistance such as more emergency trolleys, patient trolleys and saline
stands and alerted the health authorities.
What of the ideal in an emergency situation?
All accidents or incidents are categorized into three, explains Dr. Anil Jasinghe, the Director of the Accident Service of the National Hospital, with years of
experience in facing different situations.
It would be a small one if there is a solitary casualty, but any number between 5-10 would be classified as 'limited mass casualty' and more than that as a 'mass
casualty incident', The Sunday Times learns.
What is categorised as disaster
If mass casualty incidents such as the one at the Fort Station are complicated with national ramifications it would be called a disaster like in the case of the
Katunayake aiport incident, says Dr. Jasinghe, explaining that usually 'disasters' occur mostly in urban areas because the population density is high but there could be
incidents like Kebithigollewa with a crowded bus being affected.
In the event of such incidents the primary concern would be to rescue the casualties from the scene and take them to the nearest hospital. "In Sri Lanka this is carried
out by civilians and they need to be commended for getting activated," he says, adding that the bulk of the casualties from the Fort blast was brought to hospital by
trishaw, van or bus.
Urging people living in rural areas to also inform the police and hospitals close to an incident site as soon as possible so that ambulances can be got to the scene, Dr.
Jasinghe said some of the small rural hospitals may not have the capacity such as surgical facilities or the manpower to deal with such emergencies. "Usually, in
advanced countries paramedics would carry out a 'casualty triage'," he said adding that in Sri Lanka small rural hospitals could be turned into triage hospitals and not
definitive care institutions.
First hour critical
A casualty triage means sorting out the casualties into 'critical', 'moderate to severe' and 'walking', The Sunday Times learns. Normally, the walking casualties who are
conscious and alert may be the ones demanding treatment and service even at the hospital. Therefore, it is important to identify the others who need immediate
attention and stabilize them.
Madhu blast victims being rushed to hospital "This is of paramount importance to save lives," says Dr. Jasinghe, underlining the fact that the first-hour after an incident is crucial. The strategy should be for the rural
cum triage hospital to then stabilize the critical casualties and transfer them to the major hospital nearest to it better geared to handle these casualties, while calling on
that hospital and also provincial health authorities for support in the form of ambulances and personnel.
Mobile units need of the hour
Urging the development of a different angle, Dr. Jasinghe calls for the setting up of mobile units within communities to respond to emergency situations and help
evacuate casualties. "They should be trained not only in evacuation but also rescue," he says, explaining that in Colombo there is the 110 service with five ambulances
and a rescue vehicle equipped to cut through wrecks, while Dehiwela-Mount Lavinia, Hikkaduwa and Batticaloa have an ambulance service on a smaller scale.
Tracing relatives of the victims
The Disaster Management Centre of Sri Lanka comes in mostly to trace the relatives of casualties, after they are brought to hospital, explained its Director-General
Gamini Hettiarachchi when contacted on their response to man-made disasters.
Explaining the structure, Mr. Hettiarachchi said a large Emergency Response Committee gets activated in Colombo as soon as there is a crisis, while in each district
there is a Coordinator and a few assistants to deal with such a situation who work closely with the relevant District Secretary.
When asked specifically about an emergency such as a bomb blast, he said that usually people around such a place would be those who will take the injured to the
nearest hospital. In nine districts around the country, a team from the security forces (army, navy or Air Force) has been seconded to assist the District Secretary
along with the civilian Coordinators, The Sunday Times understands.
Citing a few examples, Mr. Hettiarachchi said an Air Force team has been seconded to assist in Colombo, while in Amparai it is the Special Task Force, in Puttalam
it is the army and in Gampaha it is the navy."They are part of the Emergency Response Units in each district," he added.
In the wake of the tsunami many coastal villages have committees within them to alert the people about a disaster and also give first-aid, he said, stressing that these
committees could also act as the eyes of the village in protecting it.
Rapid Deployment Teams to the fore
In a major proactive development, a Rapid Deployment Team consisting mainly of a surgeon and other support staff along with essential supplies such as blood will
be airlifted to any rural hospital in case of an emergency, said Health Ministry Secretary Dr. Athula Kahandaliyanage.
The rosters have been made up with names of surgeons drawn from the National, Colombo South, Sri Jayewardenepura and Ragama Hospitals, The Sunday Times
learns.
If and when the need arises the Rapid Deployment Team will be rushed by helicopter to the rural hospital needing the skills and expertise, with the help of the Air
Force, Dr. Kahandaliyanage said.
Kumudini Hettiarachchi & Dhananjani Silva report
Claymore mines rip apart three buses, one in Weli Oya, another in Madhu and the other in Buttala. A bomb on a bus in Dambulla. A suicide bomber triggers an
explosion at the Fort Railway Station. Tears and trauma and amidst the carnage children, women and men, dead or injured.How does a shattered country cope?
How hospitals cope
Most hospitals cope as best they can and do in difficult circumstances the maximum within their capability. Just two kilometres from the scene of the incident, the
Buttala District Hospital was able to give emergency treatment to around 60 victims with the resources available. Later 50 were transferred to the Moneragala Base
Hospital 14 km away, said Buttala District Medical Officer Dr. Premalal Abeysooriya.
A medical assistant carries a young survivor of a roadside bomb blast that tore through a civilian bus in the Welioya region Added Moneragala's Acting Medical Superintendent Dr. D.C. Priyanath that they coped with the situation as the 390-bed base hospital, with 72 doctors, 250 nurses
and four ambulances, was equipped and could cater to an emergency incident. "Most surgeries could also be performed here except specific operations such as
dental and orthopaedic," he said, explaining that following the Buttala incident, ambulances were called in from nearby hospitals, medical teams were rushed from
Colombo and Mahiyangana and those who required neurosurgical intervention transferred to the Colombo National Hospital.
A few small issues with regard to equipment when dealing with a disaster have already been notified to the authorities, he said. In a different part of the country, the Dambulla bomb blast saw in its wake 96 casualties being rushed to the Dambulla Base Hospital. "Twenty-five in critical
condition were transferred to the Matale and Kandy Hospitals while the rest were treated here," said Medical Superintendent Dr. Sudarshana Arambegedara.
The Dambulla Hospital is prepared to deal with an emergency and has the necessary resources, he said, adding that the moment they hear of an incident the
emergency preparedness plan is activated with a ward being cleared for such casualties.
"Different types of patients varying from critical to manageable are then treated on two different sides of the ward while patients with minor injuries are referred to the
Outpatients Department (OPD)," said Dr. Arambegedara, stressing that the hospital doesn't function as a single unit but as a cluster. "So we get support from Kandy,
Matale and Kurunegala Hospitals within minutes, be it staff or ambulances, if the need arises," he said. Dambulla Hospital was 90% successful in providing medical
treatment in the recent incident, he says with justifiable pride. Among other facilities it has three ambulances and an equipped operating theatre. Although the hospital
has only one surgeon, the MS does not see it as a problem because surgeons can be called in from nearby hospitals within 30 minutes while a patient is being
stabilized and prepared for surgery. The unavailability of neuro and ENT surgeons is also not an acute problem, he said, adding that such patients can be transferred
to Colombo via Kurunegala after two or three days.
A victim from the Dambulla bus blast being wheeled into Dambulla Hospital "We also had the support of the Blood Bank which operates from Colombo as they sent us 75 pints of blood in addition to the stocks we had in the hospital's blood
bank," he explained. Dr. Arambegedara said they have identified certain areas where they need assistance such as more emergency trolleys, patient trolleys and saline
stands and alerted the health authorities.
What of the ideal in an emergency situation?
All accidents or incidents are categorized into three, explains Dr. Anil Jasinghe, the Director of the Accident Service of the National Hospital, with years of
experience in facing different situations.
It would be a small one if there is a solitary casualty, but any number between 5-10 would be classified as 'limited mass casualty' and more than that as a 'mass
casualty incident', The Sunday Times learns.
What is categorised as disaster
If mass casualty incidents such as the one at the Fort Station are complicated with national ramifications it would be called a disaster like in the case of the
Katunayake aiport incident, says Dr. Jasinghe, explaining that usually 'disasters' occur mostly in urban areas because the population density is high but there could be
incidents like Kebithigollewa with a crowded bus being affected.
In the event of such incidents the primary concern would be to rescue the casualties from the scene and take them to the nearest hospital. "In Sri Lanka this is carried
out by civilians and they need to be commended for getting activated," he says, adding that the bulk of the casualties from the Fort blast was brought to hospital by
trishaw, van or bus.
Urging people living in rural areas to also inform the police and hospitals close to an incident site as soon as possible so that ambulances can be got to the scene, Dr.
Jasinghe said some of the small rural hospitals may not have the capacity such as surgical facilities or the manpower to deal with such emergencies. "Usually, in
advanced countries paramedics would carry out a 'casualty triage'," he said adding that in Sri Lanka small rural hospitals could be turned into triage hospitals and not
definitive care institutions.
First hour critical
A casualty triage means sorting out the casualties into 'critical', 'moderate to severe' and 'walking', The Sunday Times learns. Normally, the walking casualties who are
conscious and alert may be the ones demanding treatment and service even at the hospital. Therefore, it is important to identify the others who need immediate
attention and stabilize them.
Madhu blast victims being rushed to hospital "This is of paramount importance to save lives," says Dr. Jasinghe, underlining the fact that the first-hour after an incident is crucial. The strategy should be for the rural
cum triage hospital to then stabilize the critical casualties and transfer them to the major hospital nearest to it better geared to handle these casualties, while calling on
that hospital and also provincial health authorities for support in the form of ambulances and personnel.
Mobile units need of the hour
Urging the development of a different angle, Dr. Jasinghe calls for the setting up of mobile units within communities to respond to emergency situations and help
evacuate casualties. "They should be trained not only in evacuation but also rescue," he says, explaining that in Colombo there is the 110 service with five ambulances
and a rescue vehicle equipped to cut through wrecks, while Dehiwela-Mount Lavinia, Hikkaduwa and Batticaloa have an ambulance service on a smaller scale.
Tracing relatives of the victims
The Disaster Management Centre of Sri Lanka comes in mostly to trace the relatives of casualties, after they are brought to hospital, explained its Director-General
Gamini Hettiarachchi when contacted on their response to man-made disasters.
Explaining the structure, Mr. Hettiarachchi said a large Emergency Response Committee gets activated in Colombo as soon as there is a crisis, while in each district
there is a Coordinator and a few assistants to deal with such a situation who work closely with the relevant District Secretary.
When asked specifically about an emergency such as a bomb blast, he said that usually people around such a place would be those who will take the injured to the
nearest hospital. In nine districts around the country, a team from the security forces (army, navy or Air Force) has been seconded to assist the District Secretary
along with the civilian Coordinators, The Sunday Times understands.
Citing a few examples, Mr. Hettiarachchi said an Air Force team has been seconded to assist in Colombo, while in Amparai it is the Special Task Force, in Puttalam
it is the army and in Gampaha it is the navy."They are part of the Emergency Response Units in each district," he added.
In the wake of the tsunami many coastal villages have committees within them to alert the people about a disaster and also give first-aid, he said, stressing that these
committees could also act as the eyes of the village in protecting it.
Rapid Deployment Teams to the fore
In a major proactive development, a Rapid Deployment Team consisting mainly of a surgeon and other support staff along with essential supplies such as blood will
be airlifted to any rural hospital in case of an emergency, said Health Ministry Secretary Dr. Athula Kahandaliyanage.
The rosters have been made up with names of surgeons drawn from the National, Colombo South, Sri Jayewardenepura and Ragama Hospitals, The Sunday Times
learns.
If and when the need arises the Rapid Deployment Team will be rushed by helicopter to the rural hospital needing the skills and expertise, with the help of the Air
Force, Dr. Kahandaliyanage said.
Sun, 10 February 2008 4:12:07 LBO >> Law Price Politics 09 February 2008 17:21:10
Sri Lanka under pressure to de-politicize price index Feb 09, 2008 (LBO) – Pressure is mounting to de-politicize Sri Lanka's new price index, which the authorities are already using as a guide for monetary policy and
are pushing trade unions to accept for indexing wages. The new Colombo Consumer Price Index or CCPI (N) has come under fire for excluding alcohol in an attempt to understate inflation and also for not representing
the spending patterns of working class people.
Sri Lanka's Department of Census and Statistics claims that the new index is based on the international 'classification of individual consumption by purpose' or
COICOP.
But one of the eleven expenditure groups in the classification which contains alcohol and tobacco has been completely dropped from the basket. In Sri Lanka alcohol
and tobacco are taxed heavily and have tended to increase in price.
Technical Practice
At a recent seminar about the index, the highly respected former head of statistics of Sri Lanka's central bank, Anila Dias Bandaranaike, suggested that authorities
include dropped items in the index.
"It is very timely that the Statistics Department has revised the index to reflect the data from the latest consumer surveys," she said.
"But if we are following the COICOP classification we have to include all eleven expenditure groups in the index."
Responding to questions from the audience Sri Lanka's statistics officials said alcohol and tobacco had been dropped from the index because of a government policy
against the use of intoxicants known as 'matherter thither.'
The head of price indices at the statistics office, D C A Gunewardene said each country may have to make their own decision and the dropped category was small.
"There is a policy called 'matherter thither', so we did not include it," Gunewardene said.
"We replaced it with items from a more recent survey like cell phone charges and hotel charges. The answer that can be given is that when we decide on a market
basket we have to make decisions needed for each country."
Officials said the eleventh category may be included in a future revision.
"A view has now been presented that if we go technically according to the COICOP classification it [alcohol and tobacco] must be included, so when we next update
the index we will take note to consider it," director general of statistics Suranjana Vidyaratne said.
According to data released by the statistics office the category only accounted for 1.8 percent in a 2002 survey.
However, the major criticism of the index is that it is not suitable to index wages of blue collar workers as it does not represent their spending patterns.
The Centre for Povert Alleviation, a think tank, said last month that the International Labour Organization has specifically asked governments not to exclude goods
that may "not be legally available or may be considered socially undersirable" from a price index.
"...it is vital to remember that inflation hurts the poor first and foremost, and for this reason the shortcomings of the new index in reflecting the impacts on the poor
should not be taken lightly," CEPA said.
Hungry Numbers
The CCPI (N) index represents all households of Colombo. Economic analyst say richer people spend a smaller proportion of their income on food consumption
than poor people who spend a higher proportion of their income on food, prices of which are more volatile and increase faster.
In the old CCPI index food had a higher weightage as it was based on a sample of the bottom 40 percent of income earners in Colombo.
In countries such as the USA wages are indexed on CPI-W, an index representing the spending patterns of the bottom 32 percent of income earners.
The CCPI (N) only has a 46.7 percent weight on food. The old CCPI index which had a 1951 base year had a 68.3 percent weight in food.
Ironically, half a century later the bottom 40 percent of income earners were still spending 60 percent on food, according to a 2002 survey, lending weight to criticism
that the new index was unfair to blue collar workers.
The poorest 10 percent (income decile) still spent 68.7 percent of their income on food, the second income decile spent 66.2 percent on food, the third and fourth
spent 61 percent.
Ironically, the poorest people also spent more on alcohol and tobacco, running up to 4 percent.
However, Gunewardene pointed out that the current practice of indexing wages at the rate of two rupees per index point was not scientific and a better method will
have to be found if salaries were to be properly linked to inflation.
Indexing
Indexing of contracts became widespread after the United States abandoned the gold standard after World War II and the Federal Reserve started to create high
rates of inflation by unrestrained printing of money.
Some market participants first attempted to write contracts in gold, but the US government struck down such deals through legal action.
At one time American citizens were also banned from holding gold through tough legal tender laws as the government ruthlessly appropriated private property through
central bank generated inflation taxation.
However, market participants then moved on to writing contracts with price indexes and interest rates to protect themselves against inflation.
The US and other governments then countered by manipulating indices to understate inflation.
Critics say governments in countries with central banks are constantly trying to understate inflation in a bid to continue to print money and keep low interest rates for
longer periods.
Some of the most notorious methods of understating inflation were proposed by a commission headed by the economist Michael Boskin which claimed in 1996 that
US inflation was overstated by more than one percent a year.
This was endorsed by then Fed chairman Alan Greenspan, who is now blamed for firing the sub-prime bubble by pushing interest rates as low as one percent.
The commission promised billions in savings for the government in payments linked to price indices such as pensions and sought a congressional rubber stamp.
The US Congress refused to endorse it but the Bureau of Labour Statistics which compiles price indexes later incorporated most of the proposals, leading to the
scrapping of fixed baskets and incorporating other questionable practices.
Understating Inflation
The current sub-prime bubble in the US has renewed the debate over understating inflation particularly the harmful effects it has on monetary policy.
Understating inflation goes beyond defrauding wage earners and pensioners and can also create asset price bubbles like the current sub-prime crises which is creating
havoc in the real economy.
US Congressmen Ron Paul who is on a house committee on monetary policy is one of the few people who had openly taken on Fed chairman Ben Bernanke for
money printing and understating inflation.
"Everybody casually accepts that inflation is a price problem," he told Bernanke in a House finance committee hearing.
"But the prices that go up are one of the consequences of inflation. Inflation causes mal-investment, it causes excessive debt and it causes financial bubbles that we
have to deal with.
"Of course we can reassure ourselves and say the CPI is going at a 2.6 percent rate.
"But if you go back to the old method of calculating the CPI, closer to what the average person is suffering … it is going at over a 10 percent rate," ," Paul said while
Bernanke listened silently.
"Inflation is a monetary phenomenon; it comes from the Federal Reserve System," he said.
When the Federal Reserve created inflation and debased the currency the 'middle class was injured, the poor hurt" and there was a transfer of wealth to the wealthy,
Paul said.
Sri Lanka however still uses a fixed-weight basket on its index though it is going to be revised more frequently. Though frequent revisions is also a technique of
understating inflation critics say it is not as bad as the methods used in the United States.
But Sri Lanka has already scrapped a country-wide index (the Sri Lanka Consumer Price Index or SLCPI) after it showed 26.2 percent inflation in November 2007.
Critics point out that in all countries authorities only claim an upward bias in inflation and try to revise indices down, while no one says an index shows low inflation
and tries to revise it upwards.
are pushing trade unions to accept for indexing wages. The new Colombo Consumer Price Index or CCPI (N) has come under fire for excluding alcohol in an attempt to understate inflation and also for not representing
the spending patterns of working class people.
Sri Lanka's Department of Census and Statistics claims that the new index is based on the international 'classification of individual consumption by purpose' or
COICOP.
But one of the eleven expenditure groups in the classification which contains alcohol and tobacco has been completely dropped from the basket. In Sri Lanka alcohol
and tobacco are taxed heavily and have tended to increase in price.
Technical Practice
At a recent seminar about the index, the highly respected former head of statistics of Sri Lanka's central bank, Anila Dias Bandaranaike, suggested that authorities
include dropped items in the index.
"It is very timely that the Statistics Department has revised the index to reflect the data from the latest consumer surveys," she said.
"But if we are following the COICOP classification we have to include all eleven expenditure groups in the index."
Responding to questions from the audience Sri Lanka's statistics officials said alcohol and tobacco had been dropped from the index because of a government policy
against the use of intoxicants known as 'matherter thither.'
The head of price indices at the statistics office, D C A Gunewardene said each country may have to make their own decision and the dropped category was small.
"There is a policy called 'matherter thither', so we did not include it," Gunewardene said.
"We replaced it with items from a more recent survey like cell phone charges and hotel charges. The answer that can be given is that when we decide on a market
basket we have to make decisions needed for each country."
Officials said the eleventh category may be included in a future revision.
"A view has now been presented that if we go technically according to the COICOP classification it [alcohol and tobacco] must be included, so when we next update
the index we will take note to consider it," director general of statistics Suranjana Vidyaratne said.
According to data released by the statistics office the category only accounted for 1.8 percent in a 2002 survey.
However, the major criticism of the index is that it is not suitable to index wages of blue collar workers as it does not represent their spending patterns.
The Centre for Povert Alleviation, a think tank, said last month that the International Labour Organization has specifically asked governments not to exclude goods
that may "not be legally available or may be considered socially undersirable" from a price index.
"...it is vital to remember that inflation hurts the poor first and foremost, and for this reason the shortcomings of the new index in reflecting the impacts on the poor
should not be taken lightly," CEPA said.
Hungry Numbers
The CCPI (N) index represents all households of Colombo. Economic analyst say richer people spend a smaller proportion of their income on food consumption
than poor people who spend a higher proportion of their income on food, prices of which are more volatile and increase faster.
In the old CCPI index food had a higher weightage as it was based on a sample of the bottom 40 percent of income earners in Colombo.
In countries such as the USA wages are indexed on CPI-W, an index representing the spending patterns of the bottom 32 percent of income earners.
The CCPI (N) only has a 46.7 percent weight on food. The old CCPI index which had a 1951 base year had a 68.3 percent weight in food.
Ironically, half a century later the bottom 40 percent of income earners were still spending 60 percent on food, according to a 2002 survey, lending weight to criticism
that the new index was unfair to blue collar workers.
The poorest 10 percent (income decile) still spent 68.7 percent of their income on food, the second income decile spent 66.2 percent on food, the third and fourth
spent 61 percent.
Ironically, the poorest people also spent more on alcohol and tobacco, running up to 4 percent.
However, Gunewardene pointed out that the current practice of indexing wages at the rate of two rupees per index point was not scientific and a better method will
have to be found if salaries were to be properly linked to inflation.
Indexing
Indexing of contracts became widespread after the United States abandoned the gold standard after World War II and the Federal Reserve started to create high
rates of inflation by unrestrained printing of money.
Some market participants first attempted to write contracts in gold, but the US government struck down such deals through legal action.
At one time American citizens were also banned from holding gold through tough legal tender laws as the government ruthlessly appropriated private property through
central bank generated inflation taxation.
However, market participants then moved on to writing contracts with price indexes and interest rates to protect themselves against inflation.
The US and other governments then countered by manipulating indices to understate inflation.
Critics say governments in countries with central banks are constantly trying to understate inflation in a bid to continue to print money and keep low interest rates for
longer periods.
Some of the most notorious methods of understating inflation were proposed by a commission headed by the economist Michael Boskin which claimed in 1996 that
US inflation was overstated by more than one percent a year.
This was endorsed by then Fed chairman Alan Greenspan, who is now blamed for firing the sub-prime bubble by pushing interest rates as low as one percent.
The commission promised billions in savings for the government in payments linked to price indices such as pensions and sought a congressional rubber stamp.
The US Congress refused to endorse it but the Bureau of Labour Statistics which compiles price indexes later incorporated most of the proposals, leading to the
scrapping of fixed baskets and incorporating other questionable practices.
Understating Inflation
The current sub-prime bubble in the US has renewed the debate over understating inflation particularly the harmful effects it has on monetary policy.
Understating inflation goes beyond defrauding wage earners and pensioners and can also create asset price bubbles like the current sub-prime crises which is creating
havoc in the real economy.
US Congressmen Ron Paul who is on a house committee on monetary policy is one of the few people who had openly taken on Fed chairman Ben Bernanke for
money printing and understating inflation.
"Everybody casually accepts that inflation is a price problem," he told Bernanke in a House finance committee hearing.
"But the prices that go up are one of the consequences of inflation. Inflation causes mal-investment, it causes excessive debt and it causes financial bubbles that we
have to deal with.
"Of course we can reassure ourselves and say the CPI is going at a 2.6 percent rate.
"But if you go back to the old method of calculating the CPI, closer to what the average person is suffering … it is going at over a 10 percent rate," ," Paul said while
Bernanke listened silently.
"Inflation is a monetary phenomenon; it comes from the Federal Reserve System," he said.
When the Federal Reserve created inflation and debased the currency the 'middle class was injured, the poor hurt" and there was a transfer of wealth to the wealthy,
Paul said.
Sri Lanka however still uses a fixed-weight basket on its index though it is going to be revised more frequently. Though frequent revisions is also a technique of
understating inflation critics say it is not as bad as the methods used in the United States.
But Sri Lanka has already scrapped a country-wide index (the Sri Lanka Consumer Price Index or SLCPI) after it showed 26.2 percent inflation in November 2007.
Critics point out that in all countries authorities only claim an upward bias in inflation and try to revise indices down, while no one says an index shows low inflation
and tries to revise it upwards.
Shooting near Kotahena church
A man was shot dead opposite St. Lucia’s church in Kotahena a short while ago. His wife was injured in the incident.
SR04346.1483 February 7, 2008 55 EM-lines (582 words) SRI LANKA Church Tries To Empower Farmers Facing Threats To Their Livelihood ANURADHAPURA, Sri Lanka (UCAN) -- The Church has established a farmers' union in central Sri Lanka to help farmers weather the rising price of fertilizer and
falling price of their crops. Oblate Bishop Norbert Andradi of Anuradhapura called a meeting to discuss the longstanding problems for farmers in his diocese. Thirty farmers and members of the diocesan laity commission attended the meeting, held Jan. 15 at the catechetical center in Anuradhapura, about 200 kilometers
north of Colombo. Culturally, Anuradhapura is the cradle of Buddhism on the island, dotted with remnants of an ancient kingdom that developed an innovative irrigation system. But
today, as the meeting discussed, farmers in this major rice-producing area are staggering under the high cost of fertilizer, fuel and labor, combined with irregular water
supply from the state. Meanwhile, the farmers are receiving lower prices for their products. Many are in debt to landlords and some have committed suicide. The situation drives young
people to leave family farms and seek work in the cities. Bishop Andradi discussed farming problems with the participants. Together they identified the need for a farming union, suitable crop storage facilities, water-
preservation methods, organic fertilizer production and the introduction of new varieties of seeds. Participants also called for laity commission representatives to
discuss problems and support the farmers in person by visiting them on their farms. Artificial fertilizers cost a lot and damage the land, Bishop Andradi said, so farmers "should be given incentives to produce organic fertilizers here, without depending
on imported agro-chemicals and fertilizers." Years ago Sri Lanka was self-sufficient in rice production, but today the rice paddies produce less due to overuse of artificial fertilizers and pesticides, according to
one of the farmers. The meeting discussed the farmers' union the Church formed a few years earlier with a priest as president. This lacked good guidance and closed. "Due to political interference among farmers, they were divided," recalled D.W. Sarath Jayasekara, 51, from Christ the King Parish in Hingurakgoda. Participants criticized the role middlemen play. They pointed out that wealthy rice-mill owners purchase rice at low prices during harvest season, then store it until the
price of rice goes up. They also discussed flooding in November that caused widespread damage to standing rice crops and vegetables. The retail price of rice went up 50 percent in the
cities, and basic foodstuffs also registered double-digit percentage increases. "The scale of the change is mind-boggling," said Lio Brion, 57, a farmer and member of Sethsaviya, the social-service organization of Anuradhapura diocese. "On the
plus side, Sethsaviya introduced organic farming without any chemicals or ingredients other than compost manure," Brion told UCA News. "When we use chemicals,
we spoil the beautiful creation of God." Farmer D.A. Kumarasirige, 36, told the meeting, "An irregular water supply and irregularities in manure distribution cause many difficulties." A.P. Jude Vass, 44, from Madawachchiya parish added that all the land is in the hands of rich landowners, so poor farmers have to pay high rent. "When the owners
need it, we have to return the land, and it is a big disadvantage for the poor," he continued. "The owners of the land, not we the farmers, decide what to cultivate and
where." As another farmer pointed out, farming brings good fortune and continues a rich tradition inherited from ages past. But today farmers are unable to enjoy this good
fortune. As a consequence, they are increasingly reluctant to work in the paddy fields, and they look for jobs in the city.
A man was shot dead opposite St. Lucia’s church in Kotahena a short while ago. His wife was injured in the incident.
SR04346.1483 February 7, 2008 55 EM-lines (582 words) SRI LANKA Church Tries To Empower Farmers Facing Threats To Their Livelihood ANURADHAPURA, Sri Lanka (UCAN) -- The Church has established a farmers' union in central Sri Lanka to help farmers weather the rising price of fertilizer and
falling price of their crops. Oblate Bishop Norbert Andradi of Anuradhapura called a meeting to discuss the longstanding problems for farmers in his diocese. Thirty farmers and members of the diocesan laity commission attended the meeting, held Jan. 15 at the catechetical center in Anuradhapura, about 200 kilometers
north of Colombo. Culturally, Anuradhapura is the cradle of Buddhism on the island, dotted with remnants of an ancient kingdom that developed an innovative irrigation system. But
today, as the meeting discussed, farmers in this major rice-producing area are staggering under the high cost of fertilizer, fuel and labor, combined with irregular water
supply from the state. Meanwhile, the farmers are receiving lower prices for their products. Many are in debt to landlords and some have committed suicide. The situation drives young
people to leave family farms and seek work in the cities. Bishop Andradi discussed farming problems with the participants. Together they identified the need for a farming union, suitable crop storage facilities, water-
preservation methods, organic fertilizer production and the introduction of new varieties of seeds. Participants also called for laity commission representatives to
discuss problems and support the farmers in person by visiting them on their farms. Artificial fertilizers cost a lot and damage the land, Bishop Andradi said, so farmers "should be given incentives to produce organic fertilizers here, without depending
on imported agro-chemicals and fertilizers." Years ago Sri Lanka was self-sufficient in rice production, but today the rice paddies produce less due to overuse of artificial fertilizers and pesticides, according to
one of the farmers. The meeting discussed the farmers' union the Church formed a few years earlier with a priest as president. This lacked good guidance and closed. "Due to political interference among farmers, they were divided," recalled D.W. Sarath Jayasekara, 51, from Christ the King Parish in Hingurakgoda. Participants criticized the role middlemen play. They pointed out that wealthy rice-mill owners purchase rice at low prices during harvest season, then store it until the
price of rice goes up. They also discussed flooding in November that caused widespread damage to standing rice crops and vegetables. The retail price of rice went up 50 percent in the
cities, and basic foodstuffs also registered double-digit percentage increases. "The scale of the change is mind-boggling," said Lio Brion, 57, a farmer and member of Sethsaviya, the social-service organization of Anuradhapura diocese. "On the
plus side, Sethsaviya introduced organic farming without any chemicals or ingredients other than compost manure," Brion told UCA News. "When we use chemicals,
we spoil the beautiful creation of God." Farmer D.A. Kumarasirige, 36, told the meeting, "An irregular water supply and irregularities in manure distribution cause many difficulties." A.P. Jude Vass, 44, from Madawachchiya parish added that all the land is in the hands of rich landowners, so poor farmers have to pay high rent. "When the owners
need it, we have to return the land, and it is a big disadvantage for the poor," he continued. "The owners of the land, not we the farmers, decide what to cultivate and
where." As another farmer pointed out, farming brings good fortune and continues a rich tradition inherited from ages past. But today farmers are unable to enjoy this good
fortune. As a consequence, they are increasingly reluctant to work in the paddy fields, and they look for jobs in the city.
Farmer villages to produce more milk
by Cyril Wimalasurendre
KANDY: With a view to raising the income of the local milk producer, the Central Provincial Council has established twenty (20) 'Milk Farmer Villages', Chief
Minister Sarath Ekanayake said.
This project has boosted the production of fresh milk enabling the farmer to enhance his income.
He was speaking at a media briefing on the Policy Statement, of Central Provincial Council for the year 2008, by the Provincial Governor Tikiri Kobbekaduwa.
He said that the target of the Provincial Council was to achieve the status of excellence by the year 2015.
The administration and the development plans of the Central Provincial Council have been streamlined with this in mind, he said.
The capital investment for the year 2008, inclusive of foreign aid has risen to Rs. 4,872 million. The funds are to be utilized in a productive manner for which the
necessary strategies have been finalised, the Chief Minister said.
The ministries and the officials of the respective departments and authorities have been directed that their performance should comply with the Provincial Council’s
aim and ambition, he said.
The Provincial Council was capable of increasing the collection of revenue in the year 2007 by 28 per cent compared to the previous year.
KANDY: With a view to raising the income of the local milk producer, the Central Provincial Council has established twenty (20) 'Milk Farmer Villages', Chief
Minister Sarath Ekanayake said.
This project has boosted the production of fresh milk enabling the farmer to enhance his income.
He was speaking at a media briefing on the Policy Statement, of Central Provincial Council for the year 2008, by the Provincial Governor Tikiri Kobbekaduwa.
He said that the target of the Provincial Council was to achieve the status of excellence by the year 2015.
The administration and the development plans of the Central Provincial Council have been streamlined with this in mind, he said.
The capital investment for the year 2008, inclusive of foreign aid has risen to Rs. 4,872 million. The funds are to be utilized in a productive manner for which the
necessary strategies have been finalised, the Chief Minister said.
The ministries and the officials of the respective departments and authorities have been directed that their performance should comply with the Provincial Council’s
aim and ambition, he said.
The Provincial Council was capable of increasing the collection of revenue in the year 2007 by 28 per cent compared to the previous year.
Expat workers remitted US$ 2.8 mn last year
Keheliyaby Wijitha Nakkawita and Lakshmi de Silva Minister of Foreign Employment Promotion and Welfare Keheliya Rambukwella told Parliament yesterday (8) that Sri Lankans employed abroad had remitted 2.8
million US Dollars during the last year (2007).
He said the number of women who go to work in the Middle East had reduced from 63 to 51 percentage wise. The government was planning to reduce the number
still further to 30 per cent.
The Minister said there were 1.5 million people who were working abroad and during the last year foreign employment grew by 14 percent while their earnings
increased by 19 per cent.
Standards of living of a large percentage of the population had improved and foreign employment had also contributed to a growth in the country's foreign exchange
earnings.
The Minister, who was answering a question about foreign employment, said he had visited a number of countries and a new programme was being prepared to send
people for employment to Israel and Poland. Agreements have been signed with those countries while the Japanese government also had agreed to employ Sri
Lankans.
million US Dollars during the last year (2007).
He said the number of women who go to work in the Middle East had reduced from 63 to 51 percentage wise. The government was planning to reduce the number
still further to 30 per cent.
The Minister said there were 1.5 million people who were working abroad and during the last year foreign employment grew by 14 percent while their earnings
increased by 19 per cent.
Standards of living of a large percentage of the population had improved and foreign employment had also contributed to a growth in the country's foreign exchange
earnings.
The Minister, who was answering a question about foreign employment, said he had visited a number of countries and a new programme was being prepared to send
people for employment to Israel and Poland. Agreements have been signed with those countries while the Japanese government also had agreed to employ Sri
Lankans.
Tigers attack SLA Claymore team in Ma'nalaa'ru
[TamilNet, Friday, 08 February 2008, 20:20 GMT]
An SLA Claymore team that infiltrated into Vedivaiththa Kallu area in Ma'nalaa'ru (Weli Oya) Friday noon was attacked by the Liberation Tigers. The SLA team
withdrew, leaving behind three Claymore mines, detonators and batteries. There were no LTTE casualties in the skirmish, reported at 12:15 p.m. in Ma'nalaa'ru.
withdrew, leaving behind three Claymore mines, detonators and batteries. There were no LTTE casualties in the skirmish, reported at 12:15 p.m. in Ma'nalaa'ru.
22 SLA killed in Paalaikkuzhi fighting - LTTE
[TamilNet, Friday, 08 February 2008, 18:12 GMT]
Liberation Tigers Operations Command in Mannaar Friday said at least 22 Sri Lanka Army soldiers were killed in two separate counter-attacks in Paalaikkuzhi,
thwarting a fresh drive by the SLA in its attempt to move towards Adampan. More than 11 SLA soldiers were killed in direct combat which lasted for almost 8
hours. Later, the Tigers launched another attack on the SLA troops that had pulled back, killing 11 more soldiers in sniper fire in no-man area. Meanwhile, Sri Lanka
Air Force helicopter landed at least six times to airlift the wounded soldiers.
Fighting raged from 9:00 a.m. till 3:30 when SLA attempted to advance through Paalaikkuzhi. Sustaining heavy casualties, the SLA hastedly abandoned the operation
leaving behind military hardware at 3:30 p.m. Assault rifles, rounds and holsters were seized by the LTTE.
Tigers also mounted another attack on the withdrawing SLA soldiers in which 11 more soldiers were gunned down in no-man area between 3:30 p.m. and 6:00 p.m.
The SLA was mounting close range mortar attacks to enable their troops to locate their dead bodies.
Tiger casualties were minimum, no cadre was killed in two days fighting in Mannaar, according to the LTTE Operations Command.
In the meantime, SLA was forced to abandon another attempt to advance in Pa'ndivirichchaan on Friday after two hours of intense fighting from 1:30 p.m.
Four-hundred PK-LMG rounds, four RPG shells, and hundreds of various other rounds with holsters were seized by the Tigers from the SLA troops in
Pa'ndivirichchaan.
The SLA had advanced into LTTE territory in Pa'ndivirichchaan Thursday afternoon following a two-hour clash. But, the SLA was pulled back when LTTE
formations mounted a counter-attack that lasted for 15 minutes on Thursday. Three RPG shells, Two-hundred-and-thirty PK-LMG rounds and four-hundred AK
rounds were seized by the Tigers. The SLA was pushed back at 2:30 p.m.
Another fighting was reported at Vi'laaththikku'lam on Thursday between 4:30 and 5:30 p.m. The SLA has suffered casualties at Vi'laaththikku'lam, the Tigers said
adding exact casualty figures were not available.
thwarting a fresh drive by the SLA in its attempt to move towards Adampan. More than 11 SLA soldiers were killed in direct combat which lasted for almost 8
hours. Later, the Tigers launched another attack on the SLA troops that had pulled back, killing 11 more soldiers in sniper fire in no-man area. Meanwhile, Sri Lanka
Air Force helicopter landed at least six times to airlift the wounded soldiers.
Fighting raged from 9:00 a.m. till 3:30 when SLA attempted to advance through Paalaikkuzhi. Sustaining heavy casualties, the SLA hastedly abandoned the operation
leaving behind military hardware at 3:30 p.m. Assault rifles, rounds and holsters were seized by the LTTE.
Tigers also mounted another attack on the withdrawing SLA soldiers in which 11 more soldiers were gunned down in no-man area between 3:30 p.m. and 6:00 p.m.
The SLA was mounting close range mortar attacks to enable their troops to locate their dead bodies.
Tiger casualties were minimum, no cadre was killed in two days fighting in Mannaar, according to the LTTE Operations Command.
In the meantime, SLA was forced to abandon another attempt to advance in Pa'ndivirichchaan on Friday after two hours of intense fighting from 1:30 p.m.
Four-hundred PK-LMG rounds, four RPG shells, and hundreds of various other rounds with holsters were seized by the Tigers from the SLA troops in
Pa'ndivirichchaan.
The SLA had advanced into LTTE territory in Pa'ndivirichchaan Thursday afternoon following a two-hour clash. But, the SLA was pulled back when LTTE
formations mounted a counter-attack that lasted for 15 minutes on Thursday. Three RPG shells, Two-hundred-and-thirty PK-LMG rounds and four-hundred AK
rounds were seized by the Tigers. The SLA was pushed back at 2:30 p.m.
Another fighting was reported at Vi'laaththikku'lam on Thursday between 4:30 and 5:30 p.m. The SLA has suffered casualties at Vi'laaththikku'lam, the Tigers said
adding exact casualty figures were not available.
Indian delegation to visit Sri Lanka next week
INDIA: A high level Indian business delegation led by Minister of State for Commerce Jairam Ramesh, will visit Sri Lanka next week to give a boost to trade and
investment between both countries.
“The Minister of State for Commerce, Jairam Ramesh is leading a high-powered investment delegation for discussions with the Sri Lankan Government on investment
opportunities for Indian companies here,” a senior Sri Lankan official said.
Representatives from Indian textile, IT and infrastructure companies, including Reliance, L&T, Mahindra and Mahindra, Aditya Birla Group, Indo-Rama, Vardhman,
Arvind Mills, IOC, Quatrro, Virtusa and others would also accompany the delegation.
Among other engagements, they will have detailed discussions with Investment Promotion Minister Navin Dissanayake and Sri Lankan Board of Investment (BOI)
officials.
This would be the third SAARC country to be visited by Jairam Ramesh after Bangladesh and the Maldives, in pursuit of closer economic ties between India and its
neighbours.
The Indian Minister is also expected to call on other Ministers to review the implementation of the India-Sri Lanka Free Trade Agreement that came into force in
March 2000, the official said. PTI
INDIA: A high level Indian business delegation led by Minister of State for Commerce Jairam Ramesh, will visit Sri Lanka next week to give a boost to trade and
investment between both countries.
“The Minister of State for Commerce, Jairam Ramesh is leading a high-powered investment delegation for discussions with the Sri Lankan Government on investment
opportunities for Indian companies here,” a senior Sri Lankan official said.
Representatives from Indian textile, IT and infrastructure companies, including Reliance, L&T, Mahindra and Mahindra, Aditya Birla Group, Indo-Rama, Vardhman,
Arvind Mills, IOC, Quatrro, Virtusa and others would also accompany the delegation.
Among other engagements, they will have detailed discussions with Investment Promotion Minister Navin Dissanayake and Sri Lankan Board of Investment (BOI)
officials.
This would be the third SAARC country to be visited by Jairam Ramesh after Bangladesh and the Maldives, in pursuit of closer economic ties between India and its
neighbours.
The Indian Minister is also expected to call on other Ministers to review the implementation of the India-Sri Lanka Free Trade Agreement that came into force in
March 2000, the official said. PTI
Ceylon Tea now a billion dollar industry
Sri Lanka tea became a billion dollar industry in 2007 for the first time in its history earning USD 1.026 billion during the year, up 16% from the previous record of
USD 883 million earned from tea exports in 2006, Asia Siyaka, one of the country’s leading tea brokers said in its annual tea report for 2007.
The brokers noted that what they called the year’s "currency achievements" had been possible in the backdrop of a decline in volumes shipped as tea exports last
year had broken a five-year trend with export quantities diping to 311 million kg from 327 million kg in 2006 which was the best ever year for tea exports.
Last year’s shortfall was due to a drop in production in the country.
However this lag was more than caught up with 2007 FOB value of tea at USD 3.29 per kilo up substantially from the USD 2.70 figure of 2006 and the record USD
2.85 per kg attained in 1998 which was a boom year for tea.
"The other positive feature of this year’s exports performance was the 42% value addition achieved," the report said recalling it was as far back as 1997 when a
higher figure of 45% had been attained.
An industry spokesman noted that since 2002 tea export earnings had grown 80% in rupee terms from 63.1 billion to 112.8 billion.
In dollar terms last year’s export earnings were up USD 119 million from the previous year, he said crediting all stakeholders in the industry – smallholders,
plantations, manufacturers and exporters – for these results.
Akbar Brothers Group again emerged the largest tea exporter in 2007 with exports totaling 38 million kg and, according to published statistics, the group had also
ranked as the largest marketer of packeted teas totaling 18 million kg.
Akbar was the top player in the tea bag segment too continuing to retain the top position with an export volume of 4 million kg of tea bags.
The Stassen group, with an export volume of 23 million kg was the second largest tea exporter in the country last year followed by Jafferjee Brothers with an export
volume of 17 million kg, the CTM group and Unilever.
Asia Siyaka noted that despite the 5% decline year-on-year of total tea exports, tea bag exports were up 16% to 22 million kg last year, the highest ever exported in
easy-to-brew bags which are becoming increasingly popular in consumer countries.
The previous record for tea bag exports was 19 million kg in 2006.
"The main destination for tea bag exports was Russia/CIS which improved its direct off-take of 4.3 million kg to 5.8 million kg, a major achievement,’’ the report
said.
While tea bags gained, packeted tea exports declined 7% to 74 million kg with Russia/CIS (13.7 million kg), UAE (11.7 million kg) and Syria (9.4 million kg) being
the main destinations. However, packeted tea exports to these countries were marginally lower than in the previous year.
Libya was an exception with exports rising sharply by 74% to 8.9 million of tead in packets from 5.1 million kg in 2006.
Asia Siyaka said that there had been an increase in instant tea exports by 43% to 1.4 million kg from one million kg the previous year although green tea shipments
were relatively flat, down marginally to 3.4 million kg from 3.5 million kg the previous year.
Russia/CIS continued to be the biggest market followed by the UAE which is the major tea distribution centre in the Middle East with Iran, where the tea trade had
been newly liberalized, in the third place with direct imports up to 32 million kg from 28 million kg the previous year.
Looking at the outlook for this year, Asia Siyaka was bullish on market prospects with local and global factors making 2008 "a year full of opportunity and some
uncertainty."
The brokers were confident that low grown teas with whole and semi leaf grades from other elevations will enjoy good marketing conditions this year.
"Price levels set in 2007 should hold, other than during the high producing period of the second quarter when we could see comparatively lower prices if a production
surge does take place," the report said.
With the country’s main tea export markets in the Middle East/North Africa (53%) and Russia/CIS (23%) expected to enjoy relative economic stability with strong
oil prices, the prospects for Sri Lanka tea looks good in a year where recession had been projected.
"Tea is a part of the basic food basket for many families in these countries and liberalization of tea markets such as Iran, Libya and Iraq will add demand," the report
said.
"Even Russia who has its sights on early entry into the WTO in 2008 has been compelled to reduce its import duties to the advantage of the producer nations."
Sri Lanka which is the largest supplier of tea to this market has been granted duty free access for bulk tea shipments.
Asia Siyaka said that problems in Kenya will definitely have an impact on global supply during the first quarter of this year with long-term implications unfolding in the
second and third quarters.
Sri Lanka tea became a billion dollar industry in 2007 for the first time in its history earning USD 1.026 billion during the year, up 16% from the previous record of
USD 883 million earned from tea exports in 2006, Asia Siyaka, one of the country’s leading tea brokers said in its annual tea report for 2007.
The brokers noted that what they called the year’s "currency achievements" had been possible in the backdrop of a decline in volumes shipped as tea exports last
year had broken a five-year trend with export quantities diping to 311 million kg from 327 million kg in 2006 which was the best ever year for tea exports.
Last year’s shortfall was due to a drop in production in the country.
However this lag was more than caught up with 2007 FOB value of tea at USD 3.29 per kilo up substantially from the USD 2.70 figure of 2006 and the record USD
2.85 per kg attained in 1998 which was a boom year for tea.
"The other positive feature of this year’s exports performance was the 42% value addition achieved," the report said recalling it was as far back as 1997 when a
higher figure of 45% had been attained.
An industry spokesman noted that since 2002 tea export earnings had grown 80% in rupee terms from 63.1 billion to 112.8 billion.
In dollar terms last year’s export earnings were up USD 119 million from the previous year, he said crediting all stakeholders in the industry – smallholders,
plantations, manufacturers and exporters – for these results.
Akbar Brothers Group again emerged the largest tea exporter in 2007 with exports totaling 38 million kg and, according to published statistics, the group had also
ranked as the largest marketer of packeted teas totaling 18 million kg.
Akbar was the top player in the tea bag segment too continuing to retain the top position with an export volume of 4 million kg of tea bags.
The Stassen group, with an export volume of 23 million kg was the second largest tea exporter in the country last year followed by Jafferjee Brothers with an export
volume of 17 million kg, the CTM group and Unilever.
Asia Siyaka noted that despite the 5% decline year-on-year of total tea exports, tea bag exports were up 16% to 22 million kg last year, the highest ever exported in
easy-to-brew bags which are becoming increasingly popular in consumer countries.
The previous record for tea bag exports was 19 million kg in 2006.
"The main destination for tea bag exports was Russia/CIS which improved its direct off-take of 4.3 million kg to 5.8 million kg, a major achievement,’’ the report
said.
While tea bags gained, packeted tea exports declined 7% to 74 million kg with Russia/CIS (13.7 million kg), UAE (11.7 million kg) and Syria (9.4 million kg) being
the main destinations. However, packeted tea exports to these countries were marginally lower than in the previous year.
Libya was an exception with exports rising sharply by 74% to 8.9 million of tead in packets from 5.1 million kg in 2006.
Asia Siyaka said that there had been an increase in instant tea exports by 43% to 1.4 million kg from one million kg the previous year although green tea shipments
were relatively flat, down marginally to 3.4 million kg from 3.5 million kg the previous year.
Russia/CIS continued to be the biggest market followed by the UAE which is the major tea distribution centre in the Middle East with Iran, where the tea trade had
been newly liberalized, in the third place with direct imports up to 32 million kg from 28 million kg the previous year.
Looking at the outlook for this year, Asia Siyaka was bullish on market prospects with local and global factors making 2008 "a year full of opportunity and some
uncertainty."
The brokers were confident that low grown teas with whole and semi leaf grades from other elevations will enjoy good marketing conditions this year.
"Price levels set in 2007 should hold, other than during the high producing period of the second quarter when we could see comparatively lower prices if a production
surge does take place," the report said.
With the country’s main tea export markets in the Middle East/North Africa (53%) and Russia/CIS (23%) expected to enjoy relative economic stability with strong
oil prices, the prospects for Sri Lanka tea looks good in a year where recession had been projected.
"Tea is a part of the basic food basket for many families in these countries and liberalization of tea markets such as Iran, Libya and Iraq will add demand," the report
said.
"Even Russia who has its sights on early entry into the WTO in 2008 has been compelled to reduce its import duties to the advantage of the producer nations."
Sri Lanka which is the largest supplier of tea to this market has been granted duty free access for bulk tea shipments.
Asia Siyaka said that problems in Kenya will definitely have an impact on global supply during the first quarter of this year with long-term implications unfolding in the
second and third quarters.
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