Low supply of essential foodstuff driving prices up
Over the past few weeks, the price of rice, vegetables and onions have consistently gone up because of the shortage of supply of these essentials in the market, experts say.
Central Bank’s Daily Price Report said yesterday (17 Dec) that the prices in Pettah and Dambulla market have increased due to low supply from major cultivating areas.
Speaking to RepublicNext Dr Ranjith Wikramasinghe of the Hector Kobbekaduwa Agrarian Research and Training Institute (HARTI), said that in general, the supply of rice and vegetables is lower every year around the December period.
Wikramasinghe who is Head of Marketing Food Policy and Agri-Business at HARTI said that when it comes to the rice shortage it is mainly due to the fact that the large scale rice millers keep the price up by storing the rice from the Yala Season and releasing it in small batches until the harvest from the Maha season reaches the market.
He also said that another reason for the low supply of rice could also be the use of paddy fields to grow vegetables in the current Maha season, “But the major problem is the price control done by large scale rice millers by storing and releasing them little by little and because of this control done by them all the small scale rice mills are closed.”
Dr Wikramasinghe said these large scale rice millers purchase all the rice as soon as it is harvested not allowing any small scale millers to gather stocks. He went on to say that they buy at a very low price allowing them to sell at a low price to the market without incurring any losses.
He added that the vegetable shortage is generally normal during this period although it also might be due to minor problems from rain and difficulty in transporting the harvest to the market due to bad weather.
In the case of onions, Dr Wikramasinghe said onions are grown in Sri Lanka only for three months within a year in Dambulla.
But with the ban on the weedicide Glyphosate which existed for a period of three years from 2015 to 2018, he said that the onion farmers had to incur huge costs in dealing with the weedicides while growing onions so most of the farmers switched to other crops.
This is the main reason why the supply of onions has dropped, otherwise, he said this would be the period where the total onion production reaches the market.