Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post

Latest topics

» Daily Stock Market Update
by Insights Equity Today at 5:17 pm

» AAIC HAS BECOME THE BEST...NOW
by hasitha@CSE Today at 3:16 pm

» BFN EGM - FEB - BROKERS SAY FOR SURE PRICE WILL MOVE ABOVE 19-59 PRIVATE PLACEMNT PRICE SLOWELY SLOWELY
by NP Today at 2:34 pm

» CTCE CTCE CTCE CTCE
by roshan1039 Today at 1:57 pm

» Any news from AMF?
by ruwan326 Today at 11:13 am

» ##FUN TOONS###
by ruwan326 Today at 11:11 am

» BFN WHY PRIVATE PLACEMENT PRICE IS 19.80
by ruwan326 Today at 11:05 am

» PLAYERS PICK OF THE DAY
by ruwan326 Today at 9:48 am

» CSE THIS WEEK
by ruwan326 Today at 8:50 am

» Don’t care if the markets are going up, down or sideways. Find opportunities to make money.
by ruwan326 Today at 8:48 am

» SRI LANKA @ 2020
by ruwan326 Yesterday at 12:37 pm

» Questionnaire on share market investor behaviour..!
by gayani2018 Yesterday at 8:52 am

» අනං## මනං ##
by ruwan326 Mon Jan 14, 2019 9:10 pm

» Daily Foreign Transactions
by heshan1997 Mon Jan 14, 2019 8:50 pm

» CROSSINGS TODAY
by ruwan326 Mon Jan 14, 2019 8:04 pm

» FOREIGN NEWS
by ruwan326 Mon Jan 14, 2019 8:02 pm

» Performance of the Market
by ruwan326 Mon Jan 14, 2019 7:57 pm

» CSE net foreign inflows expected to rise as investors 'Look East'
by kalu351 Mon Jan 14, 2019 5:09 pm

» intra day trading
by thu dam Mon Jan 14, 2019 12:51 pm

» January dividend history (2010 to 2019)
by ruwan326 Mon Jan 14, 2019 11:24 am

» BFN කොටස් හිමීයන්ගේ අති විශේශ සභාව පෙරවාරි යේ ..
by kalu351 Mon Jan 14, 2019 10:45 am

» some banking sector valuations, looks under valued?
by arjunaupendra Mon Jan 14, 2019 10:07 am

» Chicken Run
by roshan1039 Mon Jan 14, 2019 7:24 am

» CTCE SHARE TO WATCH
by roshan1039 Mon Jan 14, 2019 6:33 am

» what are the shares to buy for short term ?
by roshan1039 Mon Jan 14, 2019 6:30 am

» Hayleys controlled Amaya, Carbotels set price of Hunas Falls stake at Rs. 696.35 Mn
by Miss-Sangeetha Sun Jan 13, 2019 8:35 pm

» JKH News & Reports
by ruwan326 Sun Jan 13, 2019 7:17 am

» We need a complete analysis on mid term direction of the CSE
by Yahapalanaya Sat Jan 12, 2019 10:16 pm

» How to Choose a Stock
by ruwan326 Sat Jan 12, 2019 9:35 pm

» HOTEL RUN FROM MONDAY
by roshan1039 Sat Jan 12, 2019 7:43 pm

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Talk » Tea industry’s performance in 2018 and prospects for 2019

Tea industry’s performance in 2018 and prospects for 2019

Go down  Message [Page 1 of 1]

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Year 2018 began with a lot of optimism in the backdrop of an excellent year (2017) that was witnessed in terms of tea prices. The first quarter commenced on a high, with the quarterly auction average being recorded as the highest ever. However, as the year progressed, the Sri Lankan tea industry had to face numerous obstacles.

Consequent to banning of glyphosate by the Government of Sri Lanka, tea growers and large plantations, in particular, were forced to use alternative products for the control of weed growth, resulting in MCPA levels higher than permitted for exports to Japan.



As the year unfolded, purchases from Japan declined due to purchases/shipments being made only following prior testing for chemical residue levels. This brought about a market – unrelated to quality – with greater emphasis on the MCPA levels and its suitability for the Japanese market. 

In and around May, US sanctions on Iran were imposed which had a cascading impact on Auction prices in Colombo, particularly for the Low Grown (Tippy) teas. There was some optimism for tea prices to turn around towards June/July following the strengthening of oil prices and the weakening of the Sri Lankan Rupee. However, this too did not work out to be a reality following the weak economies in most Middle Eastern countries and Russia, resulting in currencies in the importer countries also depreciating against the US Dollar. 

During the second half of 2018, there was ample evidence of global production increasing significantly, primarily due to increased production in the African region. These increases did not reflect too adversely on Colombo Auction prices, as most of the increase comprised of CTC teas.

After much deliberation, stakeholders were successful in negotiating with the Government of Sri Lanka to remove the glyphosate ban through a Special Gazette dated 11 July 2018, a welcome relief to the industry. However, the modalities have taken a considerable period of time for these shipments to be available for the plantations on a regulated basis.

Commencing around September 2018, the Sri Lankan Rupee began to show a significant devaluation against the US Dollar, which possibly to some extent made Sri Lankan tea prices attractive to importers. Since then, we have seen reasonable momentum although the current Auction price levels are below the corresponding sales of last year by approximately Rs. 50 or $ 0.27 per kg. Cumulative Colombo Auction average up to the penultimate sale stood at Rs. 619.11 compared to Rs. 582.17 in 2017, a variance of Rs. 37 per kg.  A synopsis of the tea industry’s performance during the year 2018 is set out below.


Cont....http://www.ft.lk/agriculture/Tea-industry-s-performance-in-2018-and-prospects-for-2019/31-669246

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Plantation sector might rise up again.......... Q4 results and 2019 policies on the way............ Idea Idea Idea

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Sri Lanka’s tea output seen recovering to 300mn kg in 2018

Dec 23, 2018 


Sri Lanka's tea production is likely to be around 300 million kilos in 2018, Forbes & Walker Tea Brokers said in a report.

The latest tea production statistics available for the month of October totals 29.6 million kilos, an increase of 3.8 million kilos or 14 percent from a year ago.

“Sri Lanka is likely to achieve the 300 million kilo mark, a reasonable recovery from the disastrous second and third quarters,” the brokers said.

The estimate considered that production up to October totals 251 million kilos and assumed production in November/December would remain static around the 2017 figures  and said it was notwithstanding the labour unrest on plantations and curtailment of tea production in December. 

But auction average prices were much lower than those in 2017 although they had begun to recover. 

​​​​​​​https://economynext.com/Sri_Lanka%E2%80%99s_tea_output_seen_recovering_to_300mn_kg_in_2018-3-12977-9.html

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Glyphosate back: Plantations would take 10 yrs to recover
December 23, 2018
​​​​​​​


One bad decision has impacted an entire tea industry’s future that experts opine could take nearly a decade to overcome the over-growth of weeds on Sri Lankan plantations.

Weedicide, Glyphosate that was banned in the country for the past three years, has been brought back following the lifting of the ban in May this year but plantation companies believe it would take about 10 years to return the estates to normalcy.

Hayleys Plantations MD Roshan Rajadurai told the Business Times that the plantations would take about 10 years to return to its earlier state as the reduction in the weeds that are overgrown would take a gradual process to take effect.

Since the previous week Glyphosate has been imported and each Regional Plantation Company (RPC) provided with 2000 litres of the weedicide.

Mr. Rajadurai explained that about 1.5 litres of Glyphosate is required for each hectare of plantations land to wipe out the weeds.

His company alone manages 35,000 hectares of plantation land and they believe that returning the estates to normalcy would take them quite some time since weeds cannot be wiped out overnight.

Glyphosate today is imported by the Ceylon Petroleum Corporation (CPC) which was previously carried out by a number of private companies and which was then freely available in the open market. However, today due to the ongoing ban on the use of the pesticide which would be permitted only for rubber and tea sectors, authorities believe that they need to regulate the import of the product.

In this respect, regulating its import could be convenient if delivered through the CPC and stocks would be issued only twice a year as per the requirements of the plantations.

One of the severe impacts of the ban on Glyphosate was the loss of the Japanese market which maintains strict conditions in the import of Ceylon Tea. Due to the use of the alternative pesticides by the industry in the absence of Glyphosate it caused high residue levels of these weedicides being found in Ceylon Tea exported to Japan. As a result Japan banned the product and it’s now exported after careful laboratory tests to ensure that they do not contain residue levels above the norm stated by the importing country.

http://www.sundaytimes.lk/181223/business-times/glyphosate-back-plantations-would-take-10-yrs-to-recover-326072.html

easthetic


Equity Analytic
Equity Analytic
Thanks Ruwan when heart gets dictating terms over  brain when it comes to national policy decisions real effect would be hard to digest for quite a few years.

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@easthetic wrote:Thanks Ruwan when heart gets dictating terms over  brain when it comes to national policy decisions real effect would be hard to digest for quite a few years.
Lets make it right 2020 by sending fresh politicians to make this country a better one Wink

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Indian tea may benefit from Sri Lanka wage hike, Vietnam problems
25.12.2018


Indian tea is expected to benefit from the wage hike in Sri Lankan plantations and residue (pesticide) problems in Vietnam, traders said.

Domestic tea production during 2018 is expected to stay more or less the same as last year despite lower rainfall, while exports are expected to marginally increase.

India is the second-largest producer of tea in the world and contributes 26% to the global production.


MK Jokai Agri Plantations Vice President Parimal Shah said tea production is estimated to be marginally lower at about 1,300 million kilograms (mkg), against 1,322 mkg in 2017. According to the State-run Tea Board data, India’s tea production for January-October 2018 stands at 1,117.6 mkg, against 1,127.2 mkg from the year before. 

South Indian tea production for the first 10 months of 2018 stands at 187.6 mkg, against 197.3 mkg in 2017. North Indian tea production for the first 10 months of 2018 was 929.98 mkg, against 929.85 mkg of the same period last year.

Shah said, on the price front, it has been a modest year with nothing spectacular. “Movement of tea was a bit erratic due to the sanction problems in Iran and the prices were low. But, once it became clear that India could export to Iran, tea prices have picked up sharply. Wage hike across plantations is a big concern for the organised sector.” 

He added that the share of wages come to 60-65% of the total production cost for organised players of tea plantations.

Average auction prices for the first 11 months of 2018 was 138.20 per kg, against 132.79 per kg in 2017.

The expected wage hike in Sri Lankan plantations is estimated to help South Indian orthodox production, according to Global Tea Brokers President Sriram Narayanaswamy.

“We have seen good demand for South Indian orthodox tea with problems seen in Vietnam and Indonesia. An increase in Sri Lankan tea production cost could help South Indian tea, and more producers have been seen moving to orthodox from CTC (crush, tear, curl),” he said.

Sriram adds that the export of CTC tea to Egypt and Pakistan was also higher this year.

India exports the CTC tea variety mainly to Egypt, Pakistan, and the UK, and the premium orthodox variety to Iraq, Iran, and Russia. 



http://www.ft.lk/front-page/Indian-tea-may-benefit-from-Sri-Lanka-wage-hike--Vietnam-problems/44-669527

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Navin assures equitable solution to plantation wage crisis
27 December 2018



Plantation Industries Minister Navin Dissa-nayake has reassured to provide an equitable and a long-term solution to the ongoing estate worker strike. 

“We are now discussing with both trade unions and the Employers Federation of Ceylon (EFC). There needs to be a long-term sustainable strategy to this issue. Collectively, we hope to reach an equitable solution very soon,” the Minister told journalists on Tuesday.


Plantation Industries Minister Navin Dissanayake
Acknowledging that this issue is very subtle as more than one million people are depending on this industry, he said it was important to consider the concerns of worker and employer with a long term equitable solution. 

“We need to reflect on both sides. On one hand it is important to consider from the humane side in providing them with Rs. 1,000 daily wage, but on the other hand we need to think how economically viable that decision is for the 22 plantation companies providing over 500,000 employment. While there is a humane aspect to this matter, we also need to evaluate how these companies would operate in a sustainable manner in the longer run,” the Minister stressed. 

The Collective Agreement discussions dragged for over three months with no breakthrough and the worker strike has been ongoing for almost a month with the industry’s losses topping over Rs. 2 billion.


http://www.ft.lk/front-page/Navin-assures-equitable-solution-to-plantation-wage-crisis/44-669614

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Plantations ring in New Year with ray of hope
1 January 2019​​​​​​​




  • Trade unions express willingness to consider alternative options offered by RPCs on Collective Agreement but remain steadfast on Rs.1000 per day goal 
  • Conclusion of new deal top priority of EFC for 2019
  • Navin pledges to become directly involved to provide equitable solution
  • Industry’s losses top Rs. 2 billion due to one month worker strike



The dawn of the New Year brings hopes of an end to the protracted wage stand-off in the plantation sector, with estate trade unions indicating that they are willing to consider alternative options put forward by the Regional Planation Companies (RPCs) to achieve their demand of Rs. 1000 a day. 

“Despite refusing to move away from the Rs. 1000 basic wage, trade unions have shown their willingness for some flexibility to consider the three offers made by plantation companies. We believe this is a very positive reaction from them after four months of discussions,” a top official of the Employer’s Federation of Ceylon told Daily FT on condition of anonymity.

The EFC and the three main plantation trade unions; Ceylon Workers Congress (CWC), Lanka Jathika Estate Workers’ Union (LJEWU) and the Joint Plantation Trade Union Centre (JPTUC) had met once to discuss  on the Collective Agreement, which has been dragging on for four months.

Members of the CWC who represents the majority of estate workers continued their strike for a month, demanding a 100% hike in basic wage to Rs. 1000 per day, whereas the industry has offered a 20% increase to Rs. 600 per day.

He said the EFC has conveyed to the union workers impossibility of RPCs meeting the Rs. 1000 basic wage requirement as it was not economically practical.

“We have categorically mentioned during discussions that it was not feasible for the plantation companies to commit to a Rs. 1000 basic wage. Some of the proposals by the PA had been considered beyond their capacity to maintain themselves. It is a huge commitment by the RPCs to keep faith in their workers’ productivity and contribution. They have taken a great risk because once they sign the agreement all RPCs are bound by the law to adhere,” he pointed out.

The PA insisted that with attendance and productivity incentives and price share supplement, the daily wage will be Rs. 940 per day, and if 22 kilos are plucked per day, the workers stand to get Rs. 1055 per day which is higher than unions demand. Even at the lower pay level of Rs. 940 per day, the annual wage bill for the industry will be a staggering Rs. 27 billion, apart from Rs. 16 billion in gratuity.

“Concluding the Collective Agreement negotiations is on the top of the priority list of EFC for this year. We hope to meet and discuss with the three main trade unions and arrive at a common understanding on this matter which has cost everybody in the industry,” the EFC official added.

The industry pointed out that strike action comes at a time when the industry is tipped to miss the $ 1.6 billion export target for 2018, and production is likely to be 40 million kilos less.

“We are fast losing our world market share as a result of the continued strike. We will end up missing the usual export target of $1.5 billion, and fall below 300 million kilograms to about 280 million kilograms this year. Whatever negotiation or correction we will make now, it will still impact all our future endeavours negatively,” stakeholders of the industry said.

Reassuming duties as Plantation Industries Minister Navin Dissanayake also pledged to reach an equitable solution to the ongoing worker strike, which is causing a massive economic cost and damage to the Ceylon Tea brand internationally.

“I hope to get involved directly to find an equitable solution to the ongoing worker strike. I am planning to discuss with MPs Thondaman and Thigambaran as well as the EFC to put an end to this dragging issue,” the Minister stated.

The Collective Agreement discussions dragged for over four months with no breakthrough and the worker strike has been ongoing for almost a month with industry’s loss topping over Rs. 2 billion.

http://www.ft.lk/top-story/Plantations-ring-in--New-Year-with-ray-of-hope/26-669927

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Sri Lankan tea auction prices fall in 2018 from record high

Jan 04, 2019 

Sri Lankan tea auction average prices fell in 2018 from record highs the year before, including in US dollar terms, brokers said. 

The January - December 2018 cumulative average of 581.91 rupees a kilo, was a decrease of 36.23 rupees from the 618.14 rupees in 2017 which was the highest ever average recorded for a calendar year, Forbes & Walker Tea Brokers said. 

“Both the month and cumulative averages show a greater decrease in US dollar terms compared to the corresponding period of 2017, with the Sri Lankan rupee depreciating sharply particularly in the last four months of 2018,” they said. 

The cumulative average in US dollar terms in January - December 2018 was 3.59 a kilo, down 52 US cents from the 4.11 dollars of January - December 2017. 

The average price for low grown teas, which account for the bulk of the crop and are grown mainly by small farmers, fell by 36.61 rupees to 600.79 rupees a kilo for the January - December 2018 period from the year before.

https://economynext.com/Sri_Lankan_tea_auction_prices_fall_in_2018_from_record_high-3-13055-9.html

ruwan326

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Plantation workers’ wage issue : Talks on Collective Agreement to resume
06 Jan 2019

The Plantation Workers’ Unions and the Employers’ Federation of Ceylon (EFC) will meet early next week in Colombo to resume negotiations on the Collective Agreement (CA) that lapsed last October and the wage hike demand of workers, which brought operations in many estates across the country to a grinding halt.

A Collective Agreement on the wage of workers is signed every two years between plantation unions and Regional Plantation Companies (RPCs).

According to a senior official of the EFC, the meeting is due to be held among the representatives of the Ceylon Workers Congress, the Lanka Jathika Estate Workers Unions and the Joint Plantation Trade Union Confederation.

“The EFC is confident that all parties will be able to reach a solution to the issue soon,” EFC Director General Kanishka Weerasinghe said.

The tug-of-war over the Rs. 1,000 daily wage hike demand between plantation workers unions and plantation companies has been persisting for the past three months culminating in workers taking to the streets urging authorities to meet their demand.

However, there is a silver lining for the long drawn out battle, as workers have softened their stance and have agreed to reach an agreement on the basic wage of workers. Plantation workers, according to EFC sources, have shown interest in reaching an agreement considering offers by companies. However, the nitty-gritty of the offers are to be made known as no party to the agreement was willing to comment.

Weerasinghe said there is progress in the negotiations, however, both parties will have to make compromises if a viable solution is to be reached.

Ceylon Workers Congress (CWC) Trade Union Advisor Muthusivalingam said the CWC is hopeful of a positive outcome at the next negotiation with a win-win solution to both parties.

“Workers got back to work despite their demand being turned down on several occasions. We have been asking for a reasonable wage increase, considering the high cost of living,” he said.

“We have held discussions with all stakeholders but failed to reach an agreement. However, trade unions are confident that their demand will be met,” Muthusivalingam said.

Employers’ Federation of Ceylon (EFC) Plantation Services Group Chairman Roshan Rajadurai said the demand for a Rs. 1,000 wage increase cannot be met in the backdrop of the dip in global tea prices. RPCs have been insisting on a sustainable wage increase model to sustain the industry.

A spokesman for the Planters’ Association of Ceylon (PA), the umbrella organisation for the 22 Regional Plantation Companies, told the media that the RPCs are unable to meet the expectations of the workers until there is improvement in global tea prices. PA officials said RPCs had offered the best package for workers whose take home salary when added up with all incentives comes up to Rs. 940. Doubling the basic wage from the current Rs. 500 to Rs. 1,000 is unaffordable to RPCs who are facing problems from many fronts, they said. 

http://sundayobserver.lk/2019/01/06/business/plantation-workers%E2%80%99-wage-issue-talks-collective-agreement-resume

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum