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Sri Lanka tea earnings hit record high

COLOMBO: Sri Lanka’s tea production and export earnings hit a record high in 2008 due to high world prices prior to the global recession and strong demand, its tea board said on Thursday.

Production reached 318.5 million kgs, surpassing the previous record of 317.2 million kgs in 2005. Earnings from tea exports also hit a record high of $1.22 billion rupees from $1.02 billion in 2007, Sri Lanka Tea Board officials said. Tea is one of Sri Lanka’s main foreign currency revenue earners, after garment exports and remittances.

“This is mainly due to better tea prices prevailing in the world market, coupled with increased demand for Sri Lankan tea up to September last year,” Lalith Hettiarachchi, chairman of the Tea Board, told Reuters.

The industry is expected to slow down in 2009, hit by reduced demand from the global downturn, a lack of fertilizer use and high labour costs, Hettiarachchi told Reuters in December.

The $32 billion economy should produce at least 300 million kgs in 2009 but revenue could be less than $1 billion, he said. Tea output in December fell 34.9 percent to 19.19 million kgs from 29.46 million kgs a year earlier, tea board data showed. “After tea prices plummeted due to global recession in September, we asked the producers to cut production and produce only quality tea leaves,” Hettiarachchi said.

The board had expected a maximum of $1.5 billion in export revenue from tea this year, but later said it would not be possible due to the global price dip. Sri Lanka’s tea exports to the Middle East and Russia, which buy 75 percent of its total production, have increasingly slowed due to the recession.

However, low-interest loans and fertiliser subsidies for tea farmers given as part of a $141 million government economic stimulus package, is expected to boost Sri Lanka’s number one agricultural product. reuters

Pakistan needs to eliminate its terror outfits: civil war in Sri Lanka and political uncertainty in Bangladesh and Nepal: US

Washington (IANS): Unless Pakistan takes sustained, concrete, meaningful steps to allay Indian concerns about Islamabad's support to anti-Indian militant groups, efforts to improve relations between the two countries could unravel, the US has warned.

"This is the case particularly in light of the November 2008 terrorist attack in Mumbai," US intelligence agencies told the Congress Thursday noting the attack has convinced New Delhi that such attacks are a part of Pakistan's new strategy to undercut India's emerging international stature.

"The attack has convinced many Indians that Pakistani military leaders, in an effort to undercut India's emerging international stature, now favour a strategy of allowing Pakistan-based groups to attack targets that symbolise New Delhi's growing prominence on the global stage or that could undermine India's prominence by provoking religious violence in the country."

"In the absence of a military response against Islamabad, the Indian public will look for visible signs that Pakistan is actively working to punish those involved and eliminate its domestic terrorist organizations," the director of national intelligence (DNI), Admiral Dennis Blair, said in his annual threat assessment report.
"Pakistan-based groups could carry out additional attacks against India and run the risk of provoking an India-Pakistan conflict," added the report representing the findings of all 16 US intelligence agencies.

"In addition, India, which has endured a series of major terrorist attacks without major military response since 2003, is under domestic pressure to make rapid and significant improvements in its counter-terrorism capabilities."

Thus "determined efforts by Indian and Pakistani leaders to improve relations through the so-called Composite Dialogue over the last four years could unravel unless Islamabad takes sustained, concrete, meaningful steps to allay Indian concerns about Islamabad's support to anti-Indian militant groups," the report said.

"On the global stage, Indian leaders will continue to follow an independent course characterised by economic and political pragmatism, the report said noting, "New Delhi will not automatically support Indian-Pakistan Relations."

Within South Asia, one of the world's least integrated regions, India will strive to manage tensions with Pakistan, trans-national terrorism, and spillover from instability in small neighbouring states.

Like China, India's expanding economy will lead New Delhi to pursue new trade partners, gain access to vital energy markets, and generate the other resources required to sustain rapid economic growth, the report said. To sustain rapid growth, Indian governments also must maintain the political support for economic reforms needed to drive the expanding economy.

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