• Food prices at record highs; inflation soars
• Food inflation increases by 24.7%
• Average monthly income Rs. 63,130: DCS
• Average monthly expenditure Rs. 76,414: DCS

By Maneesha Dullewe  Sri Lanka’s headline inflation rose to 17.5% in February, up from 16.8% in January, according to the National Consumer Price Index (NCPI), which surpassed the Colombo Consumer Price Index (CCPI) inflation rate of 15.1% for the same month.  The Department of Census and Statistics (DCS) reveals Year-on-Year (YoY) inflation of the Food group at 24.7% in February 2022 from 24.4% in January 2022 and the YoY inflation of the Non-Food group at 11% in February 2022 from 10.2% in January 2022. As per the latest updates from the DCS, price increases were reported for rice (0.27%), Mysore dhal (0.09%), milk powder (0.07%), fresh fruits (0.07%), coconuts (0.05%), chillie powder (0.05%), wheat flour (0.04%), red onions (0.04%), coconut oil (0.03%), fresh fish (0.03%), dried fish (0.02%), dried chillies (0.02%), chicken (0.02%), curry powder (0.01%), bread (0.01%), sugar (0.01%), and infant milk powder (0.01%). In contrast, price reductions were recorded for vegetables (0.16%), eggs (0.08%), limes (0.05%), green chilies (0.04%), big onions (0.03%), and potatoes (0.02%). Economy nosedives The country’s economy has nosedived since the onset of the pandemic, with the collapse of agriculture and tourism revenue, heralding a downward spin that has continued to manifest in shortages of essential goods available for the public. According to the latest DCS Household Income and Expenditure Survey (HIES) of 2019, the average monthly household income is Rs. 76,414 while the average monthly household expenditure is Rs. 63,130. The HIES also reports that the monthly expenditure of the average household stands at Rs. 95,392 for urban areas, Rs. 57,652 for rural areas and Rs. 38,519 for the estate sector. According to the survey, when sectors are compared, an average income receiver in the urban sector receives 2.7 times higher income than that in the estate sector. Based on the survey results, the average monthly income receivers’ income per month for Sri Lanka in 2019 was Rs. 42,308. However, the number of income receivers per household is higher in the urban and estate sectors when compared with the rural sector. Income receivers’ median income for 2019 is Rs. 28,465. Comparing supermarket data, Advocata’s Bath Curry Indicator (BCI), which tracks the monthly changes in the retail price of a select basket of food items, noted that the cost for an average family of four to purchase the basket of 10 products in February 2022 was Rs. 1,958. While this is a decrease from December 2021’s record high cost of Rs. 2,094, it shows a significant increase compared to February 2021’s cost of Rs. 1,674. Staggering increase Speaking to The Sunday Morning, National Movement for Consumer Rights Protection (NMCRP) Chairman Ranjith Vithanage shared: “When comparing the first weeks of March 2021 and March 2022, the prices of essential goods have increased by about 80%. Based on the data from the DCS, it is clear that there has been an approximately 80% increase. However, the public’s income remains the same, meaning the income levels are the same as they were the previous year’s March.” Vithanage noted that with the added expenditure in terms of utilities such as water and electricity, as well as other expenses such as education under the new normal which required online facilities, families were finding it exceedingly difficult to maintain their daily lives.    He explained that people have had to stop buying certain food items due to the increase in cost: “Fish is around Rs. 2,000, the egg that we used to buy at around Rs. 16-18 is now Rs. 30-35. A bottle of coconut oil is now around Rs. 750-800 from its previous price of around Rs. 380. Therefore, this situation compels people to give up certain commodities. Since the supply power and water will be suspended if bills are unpaid, people instead sacrifice things like education and food.” Vithanage further claimed that the Government was attempting to push a further burden on the consumer with increased taxes in addition to the growing cost of goods and commodities: “Wages remain the same, and many income sources have dried up. Many enterprises such as hotels have shut down due to LP gas shortages. However, the Government continues to be unfeeling to this situation, imagining that people will buy these items at any price. While those of a higher income bracket will not feel this pinch, the middle classes and the daily wage earners are in serious difficulties.” Affirming that the issues caused by people being unable to afford education and food would have long-term repercussions as a society, Vithanage stated that given the adage that one could determine the nature of the country’s government from the curries on a plate of rice, people were at present unable to even afford dhal to eat with their daily meal of rice. Nutrition sacrificed Meanwhile, All-Island Canteen Owners’ Association (AICOA) Head Asela Sampath stated that canteens were seeing the most demand for items such as vadai, plain tea, and parata. This was because those who consumed full meals such as string hoppers or bread with various meat and dairy-based curries were no longer able to afford those meals due to the increase in food prices. Accordingly, he noted that consumers were resorting to food items that were not as nutritious as before.  Speaking to The Sunday Morning, Advocata Institute Chief Operating Officer Dhananath Fernando explained that the present levels of food inflation constituted a strain on the economy, with the increase in prices of food items subsequently driving up the cost of living.  “It is difficult for poorer people because when the prices increase and their income doesn’t increase, they have to cut down on their food intake because a higher percentage of their income goes into getting through challenging times. So, they either have to borrow or cut down on their food intake,” he said. Relief measures Meanwhile, Minister of Trade Dr. Bandula Gunawardena, commenting on Government plans to counter the situation, told The Sunday Morning that the Government had already implemented various relief measures to accommodate the situation.  “The Government has already provided the estate sector with 15 kgs of flour per month as relief. In addition, we are continuing to provide a kilo of Nadu rice at Rs. 110 and a kilo of Samba rice at Rs. 130 through Sathosa. Through the Coconut Development Board we are selling one coconut at Rs. 75 each, while 100 g of tea is being sold at less than Rs. 100 at Sathosa. A water bottle that is Rs. 65-70 elsewhere is sold at Rs. 35 at Sathosa,” he detailed.  “We are maintaining lower prices than before for every possible item for which the prices can be controlled. However, I do not know how long we can continue maintaining these prices,” he added. The cost of daily meals 

Breakfast	Lunch	Dinner
Bread – Rs. 110-130	Samba rice (1 kg) – Rs. 190	Bread – Rs. 110-130
Dhal (1 kg) – Rs. 400	Egg (each) – Rs. 29.50
	Fish (Balaya 1 kg) – Rs. 700
	Beans (1 kg) – Rs. 240
Plain tea – Rs. 30	Carrot (1 kg) – Rs. 200
Milk tea – Rs. 100	Dhal  (1 kg) – Rs. 400

(Pettah, Peliyagoda market prices as at 24 March) Source: CBSL Average monthly household expenditure by major Non-food expenditure groups –  2019 Source: Household Income and Expenditure Survey – 2019