Mar 14, 2012 (LBO) – The fall in the value of the Sri Lankan rupee following a snap devaluation last year has helped tea exporters improve profit margins and regain competitiveness, Finlays Colombo, a top exporter has said. Its chairman Kumar Jayasuriya said the firm had a difficult year in 2011 because of problems in key export markets like the Middle East and Japan.
But he said, the biggest challenge Finlays faced was in respect of the exchange rate with the rupee actually strengthening against the US dollar for much of 2011, while the currencies of competing countries, namely Kenya and India, depreciated substantially.
“Compounding the problem was the fact that currencies in most of the Middle Eastern countries to which we export, also depreciated which made our products significantly more expensive at the point of consumption,” Jayasuriya told shareholders in the company’s annual report.
The report said the strength of the rupee which prevailed up to October 2011 and the depreciation of the currencies of all the major tea importing countries caused a serious erosion of margins.
The depreciation of the rupee in November 2011 helped to mitigate the loss of margins and helped Sri Lankan t