Sri Lanka slaps price controls on masks amid medical emergency
ECONOMYNEXT – Sri Lanka’s National Medical Regulatory Authority, has slapped price control on masks as demand went up, as demand went up amid Coronavirus fears.
The NMRA had slapped a ceiling of 50 rupees for disposable surgical masks and 325 rupees for N-95 type masks.
Price controls can prevent new suppliers from coming into the market at high prices temporarily and eliminating shortages.
However Sri Lanka’s Health Minister Pavithra Wanniarachchi said in late January that the NMRA required pre-registration of suppliers who wanted to import masks and the legal requirements were delaying fresh imports.
In China rising prices prompted companies which produced electronics to shift to mask manufacturing and close factories to re-open and boost supplies.
Japans sharp re-jigged a TV factory to make masks, with a capacity of 150,000 masks a day.
The price controls came as a health ministry statement that members of the public need not wear mask and they got more protection by washing hands frequently and maintaining distance. Only sick persons and those working with persons at risk were asked to wear masks.
Rising prices reduce demand, and daily use and discarding of masks by healthy individuals and ration supplies for the most needed.
Low prices also encourage nu-necessary hoarding, and can also create a black market. However the new controlled prices are higher than the pre-Coronavirus price which may reduce the negative fallout of price controls
Due to political pressure many developing countries had slapped price control on masks and sanitizers, slowing a growth in supply. (Colombo/Mar16/2020)