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Govt. urged to reconsider spices import move

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The Spices and Allied Products Producers’ and Traders’ Associ-ation (SAPPTA) yesterday called on the Government to reconsider its decision to import spices for re-export, warning of potentially detrimental consequences for the local industry and economy. 

“The move could undermine the local spice industry, impacting numerous farmers, exporters, and stakeholders in the value chain,” SAPPTA President Christopher Fernando told the Daily FT.

He argued that the decision, made by the Cabinet on 11 June, to import selected spices for reprocessing and re-export, could have significant negative effects on the local agricultural market.   “We request the Government to reconsider this matter, as it poses a significant threat to a large number of farmers and exporters. The Cabinet decision could harm the entire value chain and the overall economy,” he added. 

He said the re-export scheme has raised significant concerns within the association regarding its impact on the quality of imported products and its implications for local growers. 

“The ‘price control’ mechanism inherent in the TIEP scheme allows certain companies to import substandard spices, re-package them and export them at lower prices. This practice not only threatens the livelihoods of our farmers but also poses a risk to the integrity of our domestic market with inferior quality products,” he stressed.

The Cabinet decision was made following a meeting on 18 March, where the Finance, Economic Stabilisation and National Policies Ministry Secretary instructed a review of the Import and Export Control Regulations No. 3 of 2024. Key recommendations approved include: 1) Providing an opportunity to import selected spices for reprocessing and re-export to businesses approved by the Board of Investment under the procedure for the import and processing of selected spices and re-export the same in the form of oil extraction, oleoresin and residue; and 2) Issuance of Import and Export (Control) Regulations under the provisions of the Import and Export (Control) Act No. 1 of 1969 for the above purpose.

Fernando cited past examples where relaxed import restrictions on turmeric and ginger led to local farmers ceasing cultivation, which increased demand and foreign exchange spending on imports. “Similarly, the past relaxation of import restrictions on pepper resulted in foreign pepper being mixed with local produce, causing high levels of chemical residues and damaging Sri Lanka’s reputation. Although the Government eventually halted these imports, the damage was already done,” he claimed. SAPPTA noted that the current favourable prices for pepper could be adversely affected by the new policy, significantly impacting small growers and exporters. 

He also expressed concerns that since BOI companies in the spice sector are not located in regulated trade zones, these imports could end up in the local market, negatively affecting local growers and exporters. 

Fernando pointed out that the Sri Lanka Tea Board (SLTB) has rightly rejected similar appeals for tea imports to protect the industry and the ‘Ceylon Tea’ brand. 

SAPPTA acknowledged the President’s efforts to support and encourage the agricultural sector, but Fernando stressed the industry’s deep concern about the recent Cabinet decision. 

He also highlighted issues in the rubber industry, where the import of centrifuge latex by BOI companies caused fluctuations in local prices, leading farmers to abandon rubber cultivation. 

Fernando warned that the spice industry might follow a similar path, resulting in increased reliance on imports and more foreign exchange leaving the country. 

Against this backdrop, SAPPTA urged Agriculture and Plantation Industries Minister Mahinda Amaraweera to engage with the association and other stakeholders before making any decisions on this matter.

“Our association represents the collective voice of the spices industry and can provide valuable insights and expertise in formulating trade policies that promote transparency, inclusivity and equitable outcomes for all stakeholders involved. Thus, relevant authority’s prompt response to our concerns and addressing this critical issue is crucial for well-being of our farmers and exporters,” he added.

During the first five months, Sri Lanka earned $ 112.93 million by exporting spices and essential oils. However, it decreased by 24.58% year-on-year (YoY) due to the poor performance in exports of cloves (-83.04 %). Clove exports to India decreased by nearly 100% in May 2024 compared to may 2023.

Source – DailyFT

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Economy

540 modern sanitation facilities to be established in Fuel stations

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The Government has launched a national-level initiative to install modern sanitation facilities at fuel stations across the country under the “Clean Sri Lanka” programme. 

An MoU was signed between the Presidential Task Force on Clean Sri Lanka, the Ministry of Energy and the island’s four major fuel providers: Ceylon Petroleum Corporation (CPC), Lanka IOC PLC (LIOC), Sinopec Energy Lanka (Pvt) Ltd and RM Parks (Pvt) Ltd.

Under the three-year programme, 540 modern public sanitation facilities will be established at selected fuel stations islandwide. 

By the end of 2025, at least 100 of these facilities are expected to be operational, providing clean and user-friendly amenities to travellers across the country.

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Economy

World Bank Group announces $1 Billion Support Package for Sri Lanka

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The World Bank Group today announced a major initiative to support job creation and unlock private sector growth in Sri Lanka, backed by more than $1 billion in financing over three years. The package targets sectors with high potential for employment and investment—energy, agriculture, tourism, and regional development.

The initiative aims to expand economic opportunity, strengthen local industry, and attract private capital to support long-term growth. It was announced after a meeting in Sri Lanka between President Anura Kumara Dissanayake and World Bank Group President Ajay Banga—marking the first visit by a Bank President in two decades and signaling a renewed commitment to the country’s economic recovery and future.

“This support from the World Bank Group is an investment in the people of Sri Lanka,” said President of Sri Lanka Anura Kumara Dissanayake. “It will help create jobs, support small businesses, and open up new opportunities across the country. We are committed to ensuring this partnership delivers real change for our communities.”

World Bank Group President Ajay Banga highlighted the importance of acting now to build on Sri Lanka’s progress.

“This is a moment of opportunity for Sri Lanka,” said World Bank Group President Ajay Banga. “With progress underway to stabilize the economy and restart growth, core elements for job creation are in place. Now is the time to accelerate reforms and create the conditions for private enterprise to thrive—particularly in sectors that can create jobs at scale.

The World Bank estimates that nearly one million young people will enter Sri Lanka’s workforce over the next decade, yet only about 300,000 jobs are projected to be created over the same period.

The new financing directly targets this gap—mobilizing public and private investment to create more and better jobs. The immediate sectors targeted in the $1 billion package includes:

Energy ($185 million): Supporting new solar and wind generation equivalent to 1 gigawatt of capacity, aimed at lowering electricity costs for families and businesses. The project is expected to mobilize over $800 million in private investment and includes $40 million in guarantees.

Agriculture ($100 million): Helping farmers and agribusinesses adopt new technologies, access markets, and attract private capital. The program will benefit more than 380,000 people—including 8,000 agri-food producers—and is expected to leverage $17 million in private financing.

Tourism ($200 million): Expanding the sector by protecting natural and cultural assets, creating jobs, and ensuring benefits flow to local communities.

Regional Development ($200 million): Investing in infrastructure, local industries, and job creation in historically underserved areas—including the Northern and Eastern Provinces.

This integrated approach—bringing together the World Bank’s financing, knowledge, and private sector tools—is a concrete example of the institution’s unique ability to support economic growth and job creation at every stage. It reflects the Bank’s focus on supporting job-generating sectors and enabling private investment.

The World Bank Group has been a trusted partner to Sri Lanka for more than 70 years, with current investments exceeding $2.2 billion. Today’s announcement deepens that partnership—focused on enabling opportunity, expanding private sector growth, and supporting the country’s path to a more resilient and inclusive economy.

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Economy

World Bank Group president to visit Sri Lanka after 20 years

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Ajay Banga is visiting Sri Lanka, marking the first presidential visit to the country by a World Bank Group president in nearly 20 years.  The visit comes at a critical moment, as Sri Lanka continues its path toward economic recovery and seeks to build a more resilient, inclusive, and private sector-led future.

The visit follows an invitation from President Anura Kumara Dissanayake, extended during a congratulatory call between the two leaders shortly after his appointment last November.

Mr. Banga’s trip reflects the strong and enduring partnership between the World Bank Group and Sri Lanka, which spans more than 70 years. His visit will focus on supporting job creation, boosting private investment, and driving an inclusive and sustainable economic recovery for the country.

While in Sri Lanka, Mr. Banga will meet with President Dissanayake, Prime Minister Harini Amarasuriya, and senior government and private sector leaders. These discussions will center on how Sri Lanka can overcome current challenges and seize new opportunities as it continues to recover economically and socially.

The World Bank Group currently supports Sri Lanka through a portfolio of projects worth $2.2 billion, including both public and private sector investments. Recent World Bank reports have noted Sri Lanka’s progress but also stressed the importance of tackling poverty and maintaining reform momentum to ensure long-term success.

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