Vegetable prices in the country have been undergoing extreme fluctuations over the last three months, leading consumers to question whether fairer retail prices could be established as they struggle to stay afloat during the slow recovery process following the economic crash in 2022.
Consistent heavy rainfall led to a drop in yields during the first week of January, resulting in Sri Lanka witnessing the highest recorded vegetable prices in recent history, with a kilo of carrots being sold at Rs. 1,000 and brinjals, cabbage, and tomatoes costing Rs. 900 per kilo. The rains have since reduced and vendors at the Peliyagoda Manning Market told The Sunday Morning that they had seen an increase in the quantities of produce during February.
According to R. Kumara, a vegetable vendor at the Manning Market, although prices of vegetables have reduced in the past month, business remains slow. “We are only seeing proper business on weekends – business has significantly reduced over the past few months,” he said.
Wanigasekera, another vendor, also pointed out that sales had reduced despite prices having reduced due to increased cultivation in the last month. As such, vendors noted that prices could reduce even further as supply was greater than demand at present.
“Vegetable prices have fallen in the last few weeks. We sold carrots at Rs. 1,000, but now we are selling at a much lower price. The only issue is that we don’t have customers now. Everyone is finding it difficult, which could be why people aren’t buying. Even shop owners who come here don’t buy in large quantities anymore,” said a vegetable seller at the Manning Market.
Dambulla Economic Centre Trade Association Secretary I.G. Wijenanda said that they expected vegetable prices to continue to decrease until April as farmers were now engaging in cultivation.
However, he said that due to the rise in prices in January, wholesale store owners were finding it difficult to continue their businesses as they had endured losses.
Consumers grapple with high retail prices
Meanwhile, consumers The Sunday Morning spoke to noted significant disparities between wholesale and retail vegetable prices. The wholesale prices observed at the Manning Market are shown in Table 1 while the retail prices at a large supermarket chain in Colombo are shown in Table 2.
“It is very difficult for us to shop at supermarket chains now as the prices are too high. I have switched to buying vegetables from a grocery store near my house where they are a little cheaper,” said Ayomi, a consumer from Rajagiriya.
Another consumer from Maradana said she had started making the weekly trip to the Pettah wholesale vegetable market as high retail prices had made vegetables at supermarket chains inaccessible.
An agriculture industry professional who wished to remain anonymous said that supermarket chains used special suppliers when supply was low in order to ensure that they received products, but would purchase from traditional wholesale markets when supply increased and prices fell so that they could access cheaper prices. “They may also increase prices as they have to account for wastage.”
Wijenanda said that they too had observed that retail prices remained high. “We also understand that it is difficult for retailers to reduce their prices; electricity and water prices are very high and people are also trying to make up for lost business from the last two years. We propose that retail markets be established through our economic centres so we can directly sell to consumers.”
Meanwhile, National Movement for Consumer Rights Protection Chairman Ranjith Vithanage said no large decrease in vegetable prices at supermarkets had been witnessed since retailers somehow attempted to maintain high prices.
“They increase when prices increase but don’t decrease when production improves, refusing to pass on the benefit to consumers. Some mechanism needs to be introduced to control this.”
He said that laws needed to be implemented to protect farmers and consumers. “At least in the past, governments have employed the Army to sell vegetables directly to consumers in lorries to provide some relief. But nothing like that is being done, so retailers know there is no such control or intervention and they can sell at any price they wish,” said Vithanage.
However, speaking to The Sunday Morning, Trade Ministry Secretary A.M.P.M.B. Atapattu said it was not practical to apply Maximum Retail Prices (MRPs) on vegetables as they were affected by seasonal conditions.
He said: “Large supermarket chains want to maintain quality so they sometimes source their own vegetables, but this may contribute to greater wastage too. Vegetables are perishables so it won’t make sense to control prices. Even for grains, an MRP was introduced but it wasn’t successful.
“Instead of having a control price, it is better to increase supply and strengthen the supply side to bring down the price. That is the only solution. Many vegetable cultivations were harmed due to the heavy rains in January and the supply chain will take about two to three months to stabilise.”
Atapattu further said that Lanka Sathosa or the co-operatives run by the Government were not successful in selling perishables. “There are no air conditioned facilities at the Lanka Sathosa so if vegetables are stored inside, they will be harmed. There are certain programmes to increase production through the Agriculture Ministry. That is the only way we can practically control this.”
Meanwhile, some economists have proposed that Sri Lanka should import vegetables, highlighting that they could be sold to consumers at a cheaper price. However, Atapattu said that vegetables would not be imported as the country’s quarantine laws only allowed for frozen vegetables to be brought into the country.
Supply chain issues
Meanwhile, Peradeniya University Agriculture Faculty Dean Prof. Sarath Kodithuwakku said that farmers in Sri Lanka largely practised a production-oriented production instead of a market-oriented production.
“Everyone grows the same thing and then there is an oversupply, which leads to reduced prices. Farmers are price-takers and they cannot determine prices. Our policies also attempt to increase production-oriented production, doing things that aren’t relevant to the market. From the farmer to the commission agent, there is a traditional supply chain with no accountability for the actors,” he said.
Prof. Kodithuwakku said that fair prices needed to be given to both consumers and farmers, noting that farmers were the most vulnerable group. “Our food miles – the number of miles from production to table – need to be reduced. Then consumers and producers must be directly linked and farmers need to have more options.”