Central Bank Governor, Ajith Nivard Cabraal last Wednesday intervened to try to solve the crisis which has engulfed the country’s tea exporters who are reeling under the Russian rouble crisis. Russia is a destination to which 22% of Sri Lanka’s tea exports are shipped.
Governor Cabraal has directed Assistant Governor Lankatilleke to officially write to all commercial banks to relax the 90-day limit which is imposed for exporters to get their payments from Russian buyers, without which the credit that has been extended to the exporters would be deemed as a non performing loan.
Cabraal has also proposed that tea exporters transact with the Russian importers in Yuan as Sri Lanka has registered the Yuan as a medium of currency for the transactions for trade with Russia. Responding to a question from the exporters as to whether Sri Lanka could export tea in exchange for Russian crude oil, Governor Cabraal has told them that it is not feasible as the Sulphur content of the Russian crude was excessive for the Sapugaskanda refinery.
This is a sequel to a delegation from the Tea Exporters’ Association (TEA) meeting Governor Cabraal at the Head Office to iron out the crisis which has erupted due to the Russian rouble crisis. The TEA delegation comprised Chairman Rohan Fernando, who is also Chairman of HVA Exports (Pvt) Ltd, Akbar Brothers Ltd Director Huzaifa Akbarally, Imperial Tea Exporters Managing Director Jayantha Karunaratne, Euroscan Exports (Pvt) Ltd Chairman Anslem Perera (who is also the incumbent Chairman of the Colombo Tea Traders’ Association), Heritage Teas Chairman Jaliya Devendra and Uni World Tea (Pvt) Ltd Chairman Sanjaya Herath. Also in attendance at the meeting were Sri Lanka Tea Board Chairperson Janaki Kuruppu, Secretary General of the Tea Secretariat Ranjith Abeykoon and Assistant Governor of the Central Bank S. Lankatilleke.
“We are having a series of meetings with the Central Bank Governor, the Sri Lanka Tea Board and the Ministry of Plantation Industries with the view of consistently resolving the crisis by reviewing and resolving issues where the impact would be minimal,” Fernando told Ceylon FT yesterday.
Fernando also said that the Association’s members are also talking to the Russian supermarkets and traders to keep the market steady.
Sri Lanka’s tea exports to Russia were 50 million kilos worth US $ 240 million out of the total exports of US $ 1.5 billion as of 2013. Total tea exports from January up to October 2014 was 38 million kilos, down from the 42 million kilos for the corresponding period a year ago, Secretary General of the Tea Secretariat Ranjith Abeykoon told Ceylon FT.
Tea is the biggest commodity that Russia imports from Sri Lanka while tea has accounted for US$ 240 million of the US$ 250 million in export revenues from Russia and all other exports have yielded a mere US $ 10 million, Abeykoon remarked. (Ceylon Today)