News

Government to buy ‘confiscated’ sugar stocks

  • State retailer Sathosa to sell hoarded stocks at controlled price
  • 32,000 MT of sugar stocks located from 15 warehouses by ESC

By Maheesha Mudugamuwa

The Government has not confiscated any of the food stocks it uncovered during raids last week, specifically stocks of hoarded sugar and rice, The Sunday Morning learnt.

Moreover, it has decided to purchase 32,000 MT of sugar it found hoarded in 15 warehouses, with the intention of selling it at controlled prices in the market.

This was shortly after President Gotabaya Rajapaksa declared a food emergency, invoking powers of the Public Security Ordinance, that was aimed at ending the artificial shortage of essential items in the market that was a result of the unscrupulous actions of certain businessmen.

Meanwhile, the State is in the process of purchasing the aforementioned sugar stocks for the state-owned retail chain, Lanka Sathosa Ltd.

According to the Essential Services Commission (ESC), a total of 32,000 MT of hoarded sugar was discovered in 15 warehouses belonging to four private importers as of Friday (3).

The raids were conducted by the ESC and the Consumer Affairs Authority (CAA).

Speaking to The Sunday Morning, newly appointed Commissioner General of Essential Services Maj. Gen. D.S.P. Niunhella said the stocks would be purchased by Sathosa and sold to consumers at a price decided by the Government.

“So far, we have discovered 32,000 MT (of hoarded sugar) and are now in the process of organising the purchase of those for Sathosa. The consignment is planned to be sold to the public through state and private traders’ outlets at a controlled price,” he said.

When asked for clarification on whether the stocks were confiscated by the Government, Maj. Gen. Niunhella clarified that none of the stocks were confiscated, and that the Government would purchase these by paying the relevant price to the respective importer.

When contacted, Co-operative Services, Marketing Development, and Consumer Protection State Minister Lasantha Alagiyawanna told The Sunday Morning that the food emergency was declared to uncover the hoarded stocks and to distribute it among consumers through proper channels, thereby ensuring that there was no shortage of essential food in the market.

He too confirmed that the stocks would not be confiscated but would be purchased by the Government, and added that both registered and unregistered warehouses had been raided.

Meanwhile, two gazette notifications were issued last week declaring maximum retail prices (MRPs) for sugar and rice with effect from 2 September, by order of CAA Chairman Maj. Gen. (Retd.) Shantha Dissanayake, under Section 20(5) of the CAA Act No. 9 of 2003.

The MRP of white sugar is declared as Rs. 122 per kg (unpacketed) and Rs. 125 per kg (packeted), while the MRP of brown or red sugar is listed as Rs. 125 per kg (unpacketed) and Rs. 128 per kg (packeted).

These measures were taken following President Rajapaksa promulgating emergency regulations on essential food supply, formulated as per Section 5 through the powers of the Public Security Ordinance. The new regulations came into effect at midnight on 30 August.

On 14 October last year, the import duty of Rs. 50 per kg of sugar was reduced to 25 cents by the Government, with the aim of providing relief to consumers.

The move drew criticism from Opposition politicians, who pointed out that the sudden reduction in the tax will result in a loss of state revenue. In March this year, the Treasury report to the Public Finance Committee indicated that Rs. 15.9 billion in revenue was lost due to the sugar tax reduction.

The volume of sugar stored in the country at that time was 88,878 MT. According to the CAA, 584,000 MT of sugar was imported between 14 October 2020 and 30 June 2021.

The monthly demand for sugar in the country is around 35,000 MT.