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Dollar crisis: Importers seek long-term solutions

18 Dec 2021

  • Over 1K shipping containers held up at Colombo Port: Senevirathne
  • Importers question sustainability of food imports
  • Importers seek $ 25 m to clear goods as a short-term measure
  • Low container availability affects logistics and exports: Masakorala
By Asiri Fernando Importers of essential food items last week called for a long-term solution to the dollar shortage impacting the importation of essential food items. Speaking to the The Sunday Morning, Essential Food Commodities Importers’ and Traders’ Association member Nihal Senevirathne said that between 1,000-1,500 shipping containers carrying essential food items were stuck at the Colombo Port for days, accumulating demurrage charges, due to the unavailability of US dollars to make release payments. Seneviratne said the Association had held talks with Trade Minister Dr. Bandula Gunawardana regarding facilitating a request to the Central Bank of Sri Lanka (CBSL) to release $ 25 million for the purpose of paying for the imported stocks held at the port. According to him, stocks held in the containers at the port include rice, dhal, sugar, onions, potatoes, and other perishable food items which need to be released to the market soon. “We have taken steps to send a list of containers we need cleared urgently. We hope to hear back from the Government next week,” Senevirathne said, adding that a long-term solution to the forex issue is needed, instead of short-term relief. The importers had sought relief in a similar manner in September where $ 50 million was requested to release 800 containers following strict import controls by the Government and the dollar being pegged to Rs. 200-203 by the CBSL. “We have to pay demurrage for the containers each day it remains in the port. This adds to our cost and translates to about Rs. 10 per kg or more for each item we import. We can’t continue to (incur losses) like this. We may have to consider stopping imports. But that will affect the consumers,” Senevirathne opined. “If essential food items are to be imported in the future, the Government may need to put aside some dollar funds to make relevant payments for the cargo to be released or paid for,” he suggested. The congestion of shipping containers at the port is also impacting the logistics industry and exporters, Shipper’s Academy International Founder and Sri Lanka Association of Manufacturers and Exporters of Rubber Products Director General Rohan Masakorala told The Sunday Morning. Responding to a query, Masakorala said: “There is an impact on the logistics sector. That many containers are not available for export. This has been a recurring problem for the last one year. Due to the dollar shortage from time-to-time around 800-1,000 containers are stuck at the Colombo Port as importers cannot find the necessary dollars to pay for them. I think the Central Bank has occasionally released some funds and the importers have managed to get them out. But it is recurring. It all comes back to lack of dollars disrupting supply chains.” Several attempts made to reach the Trade Minister and the CBSL Governor on how the Government will address the issue, failed.


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