• Likely to intervene through State-backed mechanisms
• No price controls
• Prices of food commodities already reduced

Amid currency pressures and rumours of possible commodity price increases, the Government has signalled its intent to keep essential food prices in check, intervening through State-backed mechanisms rather than imposing price controls that could disrupt supply.

Speaking to The Sunday Morning Business, Deputy Minister of Trade, Commerce, Food Security and Co-operative Development R.M. Jayawardana stated that notwithstanding the depreciation of the Sri Lankan Rupee against the US Dollar, the Government had, through Lanka Sathosa, taken steps to reduce the prices of many food commodities.

“We have reduced the prices of food commodities by a considerable amount from our side through Sathosa,” he said. 

“We published a list, and while I cannot remember the exact items, almost all items saw a considerable decrease in prices. Some items saw prices decrease by around Rs. 100. Accordingly, we are intervening to manage prices in the market.”

However, he clarified that the Government had thus far not considered introducing a maximum retail price for any commodities, because such a measure could lead to shortages in the market. Therefore, it is instead studying the market and taking appropriate corrective measures where needed.

Commenting on the means through which the Government intended to intervene to control prices in the market, the Deputy Minister stated that they were hopeful that increased competitive pricing through the maintenance of prices at low levels through Sathosa would help manage prices.

He further stated that they were importing around 20 essential commodities through the Co-operative Wholesale Establishment. 

According to Jayawardana, the objective with other commodities is to participate in the purchasing and distribution process in order to prevent prices from falling unnecessarily to the detriment of farmers, as well as to stop prices from escalating unnecessarily in a manner that is disadvantageous to consumers.

However, he admitted that certain food items, such as big onions and potatoes, had experienced a price increase in the market. 

Commenting on the reasons for the price increase, the Deputy Minister stated that prices traditionally rose during this period because of taxes introduced on imports. While they had not introduced taxes this time around, he theorised that the price increase was possibly in expectation of such a phenomenon.

Commenting on potatoes, he stated that they had been purchasing local potatoes at around Rs. 190 per kilo, but due to complaints of losses by farmers, they had now started purchasing them at around Rs. 220 per kilo, while outside traders had started to purchase the commodity at levels of around Rs. 250.