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Sri Lanka suspends coconut auctions, amid rising retail prices

ECONOMYNEXT – Sri Lanka has suspended weekly auctions conducted by the state Coconut Development Authority amid rising domestic retail prices.

So far no decision had been made on re-starting the auction, an industry official said.

Average auction prices hit 56,494 at the last auction with the top price hitting 61 rupees.

Sri Lanka’s price control agency the Consumer Affairs Authority slapped price controls creating shortages in the market.

The price rises come amid higher export demand for coconut kernel products, a 12 percent fall in production up to July 2020.

Sri Lanka has also imposed high taxes on imported vegetable oils, which are close substitutes to coconut oil.

Sri Lanka has controlled many imports after printing money in April and March 2020, though private credit contracted after that.

Concerns have been raised that excess liquidity in money markets will lead to a rise in inflation. (Colombo/Oct15/2020)