News

Rice prices: Hike due to shortage: Alagiyawanna 

  • Rice mill owners deny shortage
  • Import levy slashed to push imports

 

By Ruwani Fonseka

As the tug of war between rice mill owners and the Government ended with the removal of price controls last week, the price of a kilogramme of rice has skyrocketed. The Government maintained throughout that the hike in prices was due to a shortage of rice in the market.

However, rice mill owners had denied that the price hike was due to a shortage in rice stocks.

With the removal of the price control gazette notification declaring maximum retail prices for rice and other essential items, some retailers had moved to hike the prices of rice, sugar, and other consumer goods. The lapse of the emergency regulations enacted by the President on essential items has also resulted in the post of Commissioner General of Essential Services, held by Maj. Gen. M.D.S.P Niwunhella, coming to an end.

The current price of samba rice stands at Rs. 170 per kg, nadu at Rs. 120 per kg, and keeri samba at Rs. 250 per kg.

Nevertheless, responding to a query by The Sunday Morning, State Minister of Co-operative Services, Marketing Development, and Consumer Protection Lasantha Alagiyawanna stated that the price increase in rice was mainly due to a rice shortage in the country.

“The truth is that we are facing a food shortage. We have reduced the tax from Rs. 65 to just 25 cents, so as to encourage importers to bring in rice to meet the demand in the country. Based on my calculations, this rice shortage will last only about another two or three weeks, not longer. The prices will drop once again, and the matter will be resolved,” Aligayawanna said. 

Finance Minister Basil Rajapaksa made tax deductions that came into effect from last Monday (1) in accordance with the Special Commodity Levy Act. The Government also recently gave the green light for the importation of 100,000 metric tonnes (MT) of rice, which was aimed at preventing a shortage.

However, when contacted, Rice Mill Owners’ Association of Sri Lanka President B.K. Ranjith told The Sunday Morning that there was no shortage of rice in the country.

“There is no shortage of rice; we have ample stocks. The main problem here is the retailers, who are eternally demanding an increase in prices. When they do not get what they want, they hide the stocks and hoard the goods to a point that it creates an artificial shortage in the market. I can assure there are ample stocks of rice in the market. However, the price of paddy has now gone up to Rs. 100 per kg, and this is why the price of rice has increased,” Ranjith said.

Commenting on the move to drop price controls and the levy on rice imports, Samagi Jana Balawegaya (SJB) parliamentarian Eran Wickramaratne blamed the Government for the current predicament.

“This is a result of mismanagement and inefficiency. The Government could not control the price of essential goods such as rice, so they revoked the gazette and are not letting retailers sell the goods at whatever price they like. What the Government is doing now is that they are trying to meet the demand,” he said.