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High cost of living: A not-so-happy New Year

09 Apr 2022

  • Consumer goods unaffordable to many: NMCRP
  • People don’t have the means to celebrate Avurudu
  • Prices of avurudu sweets leave a bitter taste
  • CAA to launch programme to prevent stockpiling and price gouging
By Maneesha Dullewe With the ever-escalating cost of living and economic instability, Sri Lanka, which has been beset by shortages of food and other essentials, is also slated to face a lean Sinhala and Tamil New Year. With inflation skyrocketing to 18.8% in March, up from 15.1% in February, and the food index rising almost 30% over the past year, with March’s food inflation being 30.2%, consumers have had to cut back on their consumption patterns. Given that Sri Lanka is heading into the Sinhala and Tamil New Year festivities this week, the scarcity facing the consumers is likely to compound an already-fraught situation. Speaking to The Sunday Morning, National Movement for Consumer Rights Protection Chairman Ranjith Vithanage noted that prices of all consumer goods across the board had increased to unbearable levels, with essentials becoming unaffordable for many.  “Compared to last year’s April, the collective consumer prices this year have increased by about 80%. Prices of certain consumer goods are even higher, because if you take a commodity such as dhal, what was previously around Rs. 120 per kg is now Rs. 500 per kg. Similarly, the prices of clothes have also increased. As such, this New Year will be a bad one for the country’s people and one they won’t have the means to celebrate.” According to the Central Bank of Sri Lanka (CBSL) data, essentials such as white kekulu rice have increased to Rs. 198 on 7 April 2022 from Rs. 96 a year ago, while dhal has increased to Rs. 438 from Rs. 168 a year ago.  Vithanage stressed that they saw this year as the first year where Sri Lanka would be unable to celebrate the Sinhala and Tamil New Year festivities.  “The country has been reduced to a state where people can’t even follow the traditions of auspicious times, since the people are facing greater problems including concerns of how to survive or find enough food to eat. How are people supposed to celebrate Avurudu under these circumstances?” he questioned.  Despite there being only a few more days left for the New Year, no relief has been provided, Vithanage stressed. “There is no power, no gas, no milk powder. Having to wait in lines to purchase these goods means that the people have no time to engage in work either. Moreover, due to power cuts many don’t even have their jobs,” he said, adding that shortages in essentials meant that consumers couldn’t even purchase the items that they needed.  At a time when people typically engage in additional spending on food and clothing, the shortages and price hikes portend a visibly subdued New Year, especially in the backdrop of continued public protests over what many international news media termed as the ‘worst financial crisis to hit the country since independence’.  Further, Bloomberg revealed that the rupee was the world’s worst-performing currency this year – a detail that highlights the unprecedented nature of the economic downturn engulfing the country.  Traders also foresee price increases for their products relative to last year, with Avurudu staples such as sweetmeats having undergone significant price revisions. A spokesperson for confectionery retailer Jinadasa Thalaguli shared with The Sunday Morning that the prices for their Avurudu sweetmeats had increased by 60% compared to the previous April. “Prices for all items have increased by 60%. However, given the current market conditions, prices will rise a further 20% in the coming week,” he cautioned. Essential Food Commodities Importers’ and Traders’ Association (EFCITA) Spokesperson Nihal Seneviratne shared with The Sunday Morning that the prices of goods had already increased, since it corresponded to the depreciating value of the rupee. If the rupee were to depreciate further, he noted, prices of goods would increase accordingly.  Despite the increase in prices, however, Seneviratne noted that there was no reduction in sales. “While there is a certain reduction in the amount imported, people still need to eat and this situation has become a huge burden on the consumer.”  Seneviratne further noted that all food commodities imported by the private sector, despite increased prices, would be available with no shortage during the upcoming New Year season. “Amidst the prevailing difficulties, we importers somehow managed to deal with our suppliers or use loan schemes to ensure that imports came in,” he said.  Moreover, he noted that wholesale traders had snapped up all imported stocks as soon as they were brought in and therefore there had been no supply disruptions. Meanwhile, the Consumer Affairs Authority (CAA) said that officials had been informed and a programme was underway to ensure that consumers would remain protected against errant traders, with raids continuing to take place.  Green gram, which is predominantly used to make mung kavum, in addition to an assorted array of other sweetmeats, saw a price increase of 9.4% compared to March 2021. The price has risen even higher in April Avurudu sweetmeat ingredients record drastic price hike With all food items undergoing upward price revisions, essential ingredients used in Avurudu sweetmeats such as rice, green gram, and coconut have witnessed drastic price increases compared to their prices during the previous New Year.  Green gram, which is predominantly used to make mung kavum, in addition to an assorted array of other sweetmeats, has seen an increase of 9.4% compared to its price during the same period in March 2021, from an average of Rs. 755 a kilo to Rs. 826.  Rice, which is often used in almost all sweetmeats as rice flour, has undergone one of the largest jumps in price, with raw red rice having shot up by 71.1% to 74% across varieties, while raw white rice has increased by 70.4% from last March. Raw rice, which was sold at around Rs. 100 per kg last year, now hovers around Rs. 182 per kg for raw red rice and Rs. 175 per kg for raw white rice. The Department of Census and Statistics further records that the price of one kilogramme of samba (grade I) stands at Rs. 189 as of its latest update, while last year around the same period it stood at Rs. 131.  Additionally, sugar has increased by 67.6% compared to last year, average sized coconuts by 3.2%, and cinnamon by 12.5%, costing Rs. 4,307 per kg compared to the Rs. 3,827 per kg the previous year.  Open market weekly average retail prices  (Sourced from main markets in Colombo)
Item 4th week of March 2021 4th week of March 2022
Raw red (average) – 1 kg Rs. 100.11 Rs. 171.02
Raw white – 1 kg Rs. 102.90 Rs. 175.00
Coconut – Each Rs. 83.64 Rs. 91.39
Sugar – 1 kg Rs. 115.37 Rs. 193.26
Green gram – 1 kg Rs. 799.64 Rs. 826.59
Cinnamon – 1 kg Rs. 3836.36 Rs.  4307.69
   

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