Sri Lanka's Agalawatte Plantations to expand oil palm cultivation

COLOMBO (EconomyNext) – Sri Lanka's Agalawatte Plantations said it will expand its oil palm business, profits from which helped reduce the impact of losses in its rubber and tea estates.

The firm, part of the Mackwoods Group, made a loss of 190 million rupees in 2014 compared with a profit of 14 million the year before with sales dropping by 8.3 percent to just over two billion rupees.

“Being predominantly a rubber company, the company's total turnover dropped year-on-year notwithstanding turnover gains recorded by tea and oil palm,” Agalawatte Plantations chairman Chris Nonis said.

The company has been affected by the slump in commodity prices along with other regional plantations companies.

Nonis said the company's investment in oil palm is continuing to bear results, with oil palm making a contribution to the company's bottom line of 137.5 million rupees, up 10.5 percent from 124.4 million the year before.

Its attributable share of profit of its joint venture palm oil mill increased to 54.9 million rupees in 2014 from 40.3 million in 2013.

“Given the proven success of diversifying into oil palm, the company is in the process of consolidating and expansion of its oil palm hectarage,” Nonis told shareholders in the company’s annual report.

However, he noted that the company’s efforts have been hampered by constraints in importing of seed material.

“It is hoped that the importation process will be streamlined without delay, so that the planting programmes can be completed as planned.”

The report said oil palm continued to perform well in 2014 making the only positive contribution to the bottom line of the three major crops.

Oil palm production dropped 7.2 percent in 2014 from the year before.

But good prices offered for fresh fruit bunches by the JV palm oil mill, which increased by 12.7 percent, enabled the improvement in oil palm profitability, the report said.

Sri Lanka tea auction prices continue slide

COLOMBO (EconomyNext) - Sri Lanka tea prices fell for fifth straight month at the Colombo auctions in May with low grown varieties dropping the most compared with last year, brokers said.

The auction average for the month of May 2015 fell 17 percent to 396.55 rupees a kilo from a year ago, with the average also down in US dollar terms, Forbes & Walker Brokers said.

Prices fell in all three elevations at which tea is grown. The industry has been hit by problems in key markets like Russia and the Middle East.

The High Grown average fell by 52.53 rupees to 364.58 rupees a kilo and Medium Growns fell by 65.68 rupees to 355.74 rupees.

Low Grown teass, which make up the bulk of the crop, fell the most – down by 93.93 rupees to 422.41 rupees a kilo in May 2015 from a year ago.

Sri Lanka tourist arrival up 26-pct in May

COLOMBO (EconomyNext) - Sri Lanka's tourist arrivals rose 26 percent from a year earlier to 113,529 in May 2015, driven by blistering growth from China and India, data from the state tourist promotion agency showed. 

In the five months to May, arrivals rose 14.5 percent to 714.584. South Asian visitors rose 28 percent to 33,141 with Indian arrivals up 38.2 percent to 31,764. 

In the five months to May Indian visitors were up 26.8 percent to 119,593. Visitors from Maldives were up 11 percent to 6,705, from Bangladesh up 17.9 percent to 1,013. But Pakistani tourists were down 8.1 percent to 2,586. South Asian visitors rose 18 percent to 172,255. 

East Asian visitors were up 33.1 percent to 23,710 with Chinese tourists growing a blistering 71 percent to 12,173. China is now the second largest source of tourists to Sri Lanka after India at 79,098 visitors in the first five months, up 80 percent from a year earlier. Japanese visitors rose 1.7 percent to 2,319 and Malaysian visitors rose 23.7 percent to 2,147. 

Western European arrivals rose 25 percent to 24,497 with UK tourists up 15 percent to 7,954 and Germany up 41 percent to 6,265.

Litro has no plans to increase gas prices; says no shortage

Sri Lanka’s Litro Gas Lanka, the largest importer and supplier of Liquid Petroleum Gas (LPG) in the island, says that there will be no immediate price revision by the company and there is no gas shortage in Sri Lanka.

"There are no plans to increase the price of gas in the immediate future," Shalila Moonasinghe, chairman, Litro Gas Lanka said.

"Although the opposition is trying to show an artificial shortage, there is no shortage of gas, but this is scaring some people and they are buying and storing gas."

Sri Lanka’s new administration reduced, the price of a 12.5 kilogram gas cylinder by 300 rupees to 1,590 rupees in January 2015, as a promise to voters.

However there was speculation that there will be a shortage of gas, since the companies do not like to sell gas for a lower price.

Litro Gas Lanka import 200,000 tons of gas annually and expects a growth of 15 – 20 percent by end 2015.

The company has 31 distributors island wide with over 4,000 dealer points.

The company says it is scheduled to sign a new contract with a European supplier following the end of a contract with Oman Trading International on 31 May 2015.

"The company made a loss of one billion rupees in the past two years due irregularities in a contract with Oman Trading International signed under the previous regime," Moonasinghe said.

"This contract was signed in 2011 initially and was renewed without following the proper tender procedure and we are now investigating this and also plan on conducting an audit soon."
-LBO