ECONOMYNEXT – Sri Lanka’s rough rice production in the main Maha cultivation season has been upped to 2.4 million metric tonnes, rebounding 62 percent from the drought stricken season last year, though output will be 14 percent below normal.
The forecast by Sri Lanka’s Department of Agriculture is based on 643,161 hectares of paddy land sown up to February 2018, up from an earlier forecasts of 2.14 metric tonnes based on 601,000 hectares sown.
In 2017 only 543,000 hectares were sown, and output collapsed to 1.48 million metric tonnes.
After covering seed paddy needs and wastage Sri Lanka’s Maha paddy production will be 2.21 million kilograms, up 66 percent from a year earlier.
Based on a rice requirement of 199,021 metric tonnes a month, the Maha output will be sufficient for 7.56 months of consumption.
Sri Lanka cut import taxes on rice last year, as drought wilted rice output.
Taxes have not yet been raised, but from 2015 to April 2018 the rupee has collapsed from 131 to 156 pushing up the costs of imported rice.
Global rice price have also picked up.
Sri Lanka’s rice prices in January were lower than the unusual highs seen in 2017 and has since settled about 5 to 10 percent lower than the same levels seen in 2017 by March and April.
In the week ending April 19, the higher graded Samba rice was quoted at 97.20 rupees kilogram at the Sri Lanka’s Marandagamulla wholesale market, up from 92.96 rupees a kilo, a year earlier.
White raw rice was quoted at 76.10 rupees a kilogram down from 83.16 rupees a year earlier, Raw Red was 74.50 rupees, down from 80.21 and Nadu rice was trading at 81.00 rupees down from 87.93 a kilogram a year earlier.
Before the currency collapse, Samba wholesale prices were around 75-76 rupee, White Raw around 63 rupees, Red Raw around 72 and Nadu around 64 rupees at this time of the year. A permanent currency fall validates the unsound monetary policy of a soft-pegged central bank. (Colombo/Apr23/2018)