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Leeway for essential foods despite open account ban

16 Oct 2022

  • Import restriction on Indian food commodities, non-availability of essentials cited as reasons
The final date for the arrival of essential food commodities imported by selected importers under open account payment terms has been extended once again due to issues faced in importing such goods from India. Speaking to The Sunday Morning Business, Trade Ministry Secretary S.T. Kodikara stated that a decision had been made to extend the final date for the arrival of the essential food commodities imported by selected importers under open account payment terms in Sri Lanka.  This was attributed to the recent import restriction imposed in India on essential food commodities such as flour and the non-availability of essential food commodities such as milk powder and dhal in India, which had forced importers to source their imports from distant places such as Canada and Australia. Elaborating further, he stated: “Because of the inability of importers to source the essential food commodities from India, we obtained Cabinet approval to extend the final date for the arrival in Sri Lanka of milk powder and dhal imported under open account payment terms by approved importers, citing that there was a delay in importing the essential food commodities that had already been approved by us.  “Accordingly, the final date for the arrival of approved milk powder and dhal consignments imported under open account payment terms shall be 31 October 2022 and for all other approved essential food items, the final date for arrival was 30 September 2022. From 31 October 2022, there will be no more imports allowed under open account payment terms."         He explained that following the introduction of the ban on open accounts from 7 June 2022 onwards, a decision had been made to allow approved importers to import essential food items due to the possibility that a sudden ban on open accounts would create a food crisis. Therefore, from 1 July 2022 to 31 August 2022, based on the requirement of the country, importers had been granted approval to import certain essential food items. The Ministry of Finance restricted the importation of goods under open account payment terms, documents against payment, or documents against acceptance through Import Control Regulations on Payment Terms No. 07 of 2022. However, the Ministry of Trade, Commerce, and Food Security intervened, claiming that this restriction would lead to a significant shortage of essential commodities in the local market and managed to convince the Ministry of Finance to somewhat relax these restrictions through Import Control Regulations No. 10 of 2022. Accordingly, importers recommended by the Ministry of Trade, Commerce, and Food Security Secretary had been allowed to continue importing 10 selected commodities – described as essential food commodities – under open account payment terms during the period 1 July 2022 to 31 August 2022.  The selected 10 essential food commodities comprised rice, wheat flour, sugar, red whole lentils, milk powder, big onions, potatoes, dried chillies, dried sprats, and yellow split peas. – By Shenal Fernando  


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