News & market updates

IFC's South Asia director urged Sri Lanka to rebrand as a green, outward-looking, export-driven investment destination and fix policy predictability. IFC has about $270m in long-term Sri Lanka exposure and is pursuing opportunities in tourism, digital services, agribusiness, renewables, manufacturing, healthcare, ports and finance.

FAO assessed Cyclone Ditwah’s impacts and will work with the Sri Lankan government to support smallholder paddy and vegetable farmers and fishing communities, noting 25–30% of damaged paddy land could be replanted with immediate fertilizer and seed support.

ADB approved a $200 million loan for the Mahaweli Water Security Investment Program Stage 2 to complete North Central Province Canal works and boost water and food security in North Central Sri Lanka. The project will benefit over 35,600 farming households, irrigate about 14,912 ha of paddy and mobilize additional cofinancing.

Government says Sri Lanka has sufficient seed paddy to replant fields damaged by Cyclone Ditwah; of 106,293 hectares destroyed, about 95,000 hectares (90%) can be sowed again. Seed and damage compensation will be provided under the Yaya 500 program and agricultural officers will guide replanting.

US Under Secretary Allison Hooker said the US is ready to restart tariff negotiations with Sri Lanka and offered support for tourism, trade and maritime ties. The ADB and IPS warn a 20% US tariff could cut export earnings by $634m and threaten about 16,000 apparel jobs, slowing 2026 growth to ~3.3%.

ADB approved a $200m loan for the Mahaweli Water Security Investment Program Stage 2 to complete the North Central Province Canal, aiming to irrigate about 14,912 ha and benefit more than 35,600 farming households through improved irrigation, crop diversification and commercial agriculture support.

Akbar Brothers won the Overall Award for Net Foreign Exchange Earner and the Globally Outreached Sri Lankan Brand of the Year at the 27th Presidential Export Awards.

Sri Lanka's cabinet approved seeking a US$200m ADB loan for stage two of the Mahaweli Water Security Investment Program, a US$536.5m project to irrigate about 17,500 hectares and provide drinking water to around 175,000 families.

A Vietnamese trade delegation led by Deputy Minister Phan Thi Thang met Sri Lankan officials on 9 December to explore investments in agriculture (including coffee), aquaculture, logistics, textiles, pharmaceuticals and direct flights to support post-cyclone economic recovery.

The Ceylon Chamber coordinated Cyclone Ditwah relief with member companies including Aitken Spence, Central Finance, Union Assurance, Union Bank, Eastern Merchants and Wealthtrust, mobilising over 190 volunteer hours and handling 40,000+ emergency assistance requests to support the DMC’s emergency operations.

Lankem Agro launched three new fertilizer products—Vovo K Power, Wonder K and N-Shield Dual Urea—aimed at improving crop yields and sustainability, with N-Shield claiming up to 40% reduction in urea use. Vovo K Power is a high-potassium NPK 10:05:25 granular and Wonder K is a water-soluble foliar with boron and sulfur.

Vegetable demand in Sri Lanka's Nuwara Eliya district slumped after Cyclone Ditwah, with 1,421 hectares damaged and daily shipments falling to 72,000 kg from a normal 150,000 kg, causing initial price spikes then a collapse. Retail pola remained partly closed and tourism was down about 20%, reducing sales.

Cyclone Ditwah killed about 500,000 layer chickens, cutting Sri Lanka's daily egg output by around 30% to about 60,000. Retail egg prices rose to Rs 43–45, day‑old chick prices recovered, maize feed rose to Rs 200/kg and the government announced Rs 200,000 per farm compensation.

Cyclone Ditwah killed 35,000 cattle and 2,000 pigs in Sri Lanka and wiped out about 500,000 layer chicks and 1.4–1.5 million broiler chicks, the Department of Animal Husbandry and Health said. Officials added pig farms were only just recovering from African swine fever and many poultry losses were at larger farms, with unknown cottage-industry losses.

The 27th Presidential Export Awards Ceremony will be held Dec 11 at BMICH, presenting 107 awards (15 overall, 92 product/service) to recognise Sri Lanka’s top exporters. People’s Bank is platinum sponsor and the government says restoring exports after recent adverse weather is a high priority.

Cyclone Ditwah could push Sri Lanka’s rebuilding bill to as much as $7 billion and is expected to slow growth to about 3% in 2026 after killing 635 people and affecting roughly 10% of the population. The cyclone wrecked infrastructure and key crops, cutting tea output by 3–4 million kg in December and destroying some 575,000 hectares of paddy.

UNDP reports Cyclone Ditwah inundated 1.1 million hectares (20% of Sri Lanka) and triggered 1,200 landslides, flooding about 720,000 buildings and impacting over 16,000 km of roads, 278 km of railway and 480 bridges. UNDP warned Sri Lanka cannot shoulder more debt for rebuilding and called for international financing.

Cyclone Ditwah destroyed early-stage Maha-season crops, leaving paddy sown on 563,950 ha (vs ~800,000 ha typical) and damaging about 95,799 ha of field crops and 13,463 ha of vegetables. The losses have driven vegetable price spikes (100–350% in some markets) and threaten food security, farmer incomes, and higher import needs into 2026.

Sri Lanka's Export Development Board will host the country's largest-ever B2B pavilion (510 sq m, 61 companies) at Gulfood 2026 in Dubai to showcase coconut products, processed foods, spices, tea and other F&B items. The EDB aims to increase MEASA food exports by US$20–30m by 2027.

Cyclone Ditwah fully destroyed 108,000 ha of rice paddies and thousands of hectares of other crops across Sri Lanka; the government will compensate Rs150,000/ha for rice, maize and other field crops and Rs200,000/ha for vegetables.

Moody’s says cyclone Ditwah will stymie Sri Lanka’s post-default fiscal consolidation as the government faces additional spending to repair widespread infrastructure damage. The storm severely hit roads, bridges, rail and power, disrupting supply chains and hitting tourism, agriculture and manufacturing.

Colombo Tea Traders’ Association reports Sri Lanka tea production Jan–Oct 2025 at 220,972,295 kg, up 3,318,755 kg versus Jan–Oct 2024. The association says harvesting, manufacturing and exports are continuing despite Cyclone Ditwah, with Colombo Tea Auctions rescheduled to late December and transport routes being reopened.

Government issued Budget Circular No.08/2025 setting a wide Ditwah relief package including Rs.25,000 cleaning grants, housing aid up to Rs.5,000,000, crop/livestock compensation and SME/fishing support. Treasury will seek Rs.50bn supplementary for 2025, Rs.500bn for 2026 and has requested $200m SDRs from the IMF.

IFC South Asia director Imad Fakhoury urged Sri Lanka to swiftly implement the Secured Transactions Act and key elements of the Economic Transformation Act to mobilise private capital and support a push toward 7% annual GDP growth. He highlighted renewable energy, logistics, export industries, digital services, specialised manufacturing, agribusiness and tourism as priority sectors and said about $11bn will be needed by 2030 for climate commitments.

The EDB now expects 2025 export earnings of $17–17.5bn, short of the $18.2bn target, and is aiming for $20bn in 2026 while launching a National Export Development Plan targeting $36bn by 2030. The plan (to be presented Jan 2026) prioritises diversification into ICT/BPM, logistics, electronics, food & beverages and spices, plus tariff reform, a National Single Window and FTA reviews.

The Sri Lanka–Russia Business Council held its 22nd AGM highlighting export opportunities in tea, rubber, spices and fisheries and renewed focus on promoting tourism with Russia remaining a top inbound market. The Council also flagged plans on trade settlement, SME access, tech transfer, renewables, logistics and education.

President Anura Kumara Dissanayake announced a Rs.72.2 billion relief package over 25 days for Cyclone Ditwah victims, including Rs.25,000 cleaning grants, Rs.50,000 kitchen grants, monthly housing payments, per-hectare farm/livestock/fishing grants and compensation up to Rs.5,000,000.

President Anura Kumara Dissanayake said the government will seek a Rs500 billion supplementary estimate for Cyclone Ditwah spending in 2026 and a Rs50 billion supplementary for 2025. The government plans about Rs72 billion for 2025 recovery and increased compensation for households and farmers.

Trade Ministry Secretary K.A. Vimalenthirarajah said Sri Lanka will introduce a comprehensive national tariff policy by mid-2026 to replace decades of patchwork tariffs and move to a predictable, facilitative regime. The reform aims to boost export competitiveness, expand FTAs and speed trade facilitation (Single Window).

President Anura Kumara Dissanayake instructed officials to promptly begin compensation payments to farmers who lost crops and livestock to Cyclone Ditwah and ordered immediate restoration of the irrigation network. He also reviewed industrial sector damage and received recovery and relief plans for affected industrialists.