ECONOMYNEXT – Sri Lanka’s cabinet of ministers had cleared state-run Paddy Marketing Board to buy Nadu paddy (rough rice) at 55 rupees a kilogram, shortly after authorities raided private milling companies which store rice under emergency law.
The PMB will buy the paddy, mill it into rice and sell to the public through state-run Lanka Sathosa retail network at a “reasonable price”, the statement said.
Sri Lanka’s rice prices had soared as the rupee fell, with millers marking the cereal up.
Sri Lanka rice is not internationally traded and does not automatically go up when global prices rise unlike exported commodities like tea.
Most of the rice is collected by a large oligopoly of millers who operate grain silos. The government has banned the import of rice giving them market power.
President Rajapaksa invoked emergency law and appointed a military major general as commissioner general to raid private businesses that ‘hoard’ rice, sugar and maize.
In July the cabinet had given the go ahead for the PMB will buy Nadu paddy at 50 rupees per kilogram, Samba at 52 rupees and Keeri Samba at 55 rupees.
A 1.50 rupee supplement will be paid for processing and transport for high quality paddy.
An additional 1.50 supplement will be paid to any farmer organization for processing and transporting paddy bought from farmers in remote areas.
There was no mention of other grades of rice in the new statement. Nadu is cheaper than Samba rice.