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Thursday July 18th, 2024

Sri Lanka to cut wheat flour import duty to relax oligopoly as rice prices spike

ECONOMYNEXT – Sri Lanka will cut import taxes to temporarily break a wheat milling and duopoly and bring prices down, as rice prices spiked, cabinet spokesman Minister Ramesh Pathirana said.

“The cabinet decided to cut import duties on wheat flour temporarily to keep prices down in the festival season,” Minister Pathirana said.

“This will break the monopoly on wheat flour.”

Sri Lanka has a government sponsored duopoly on wheat flour high maintained by a high tax on wheat flour and a by a lower tax on wheat grain to give high profits (rents) to a milling oligopoly and block a free market in wheat.

Wheat grain has a general duty of 15 percent, while milled flour is taxed at 30 percent.

Minister Pathirana said a gazette notice on the new import tax will be issued shortly.

It is not clear for how long the duopoly would be broken and when it will be re-instated.

“Our stance is that there should not be a monopoly on any essential food,” Minister Dulles Akahapperuma said.

The high prices on wheat flour has also generated the background for an oligopoly of rice millers to keep rice prices high.

Rice prices rose sharply over the last month, with several large millers, who store most of the rice paddy in the country, raising retail prices of their branded rice.

Opposition politicians have charged that the blocking of un-husked paddy from government stores to small millers had pushed up prices.

The government hoped to quickly release 42,000 metric tonnes of stored rice to millers.

Pathirana said the government hoped to keep retail rice prices at 99 rupee a kilogram.

Rice prices soared from around 85 to 90 rupees a kilogram at the beginning of November to over 110 rupees by the first week of December. (Colombo/Dec12/2019 – Update II)

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Sri Lanka to conduct threat assessments for presidential candidates

ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe has submitted a cabinet paper proposing security measures for presidential candidates and former presidents, following the recent attack on former US President Donald Trump during a campaign rally in the USA.

“This proposal suggests the appointment of a committee to conduct threat assessments and provide necessary security for Presidential candidates as well as former Presidents,” a statement from his media division said.

The committee will include the Secretary of the Ministry of Public Security as Chair, the Chief of Defence Staff, the Inspector General of Police, the Chief of National Intelligence, and the Senior Deputy Inspector General of Police/Elections.

A Deputy Inspector General of Police will be appointed to oversee all security arrangements.

The committee and the designated officer will work closely with the Election Commission to ensure seamless coordination of security arrangements, the PMD said.

After today, July 17, Sri Lanka’s Election Committee is empowered to announce a date for the presidential polls due to be held this year.

Minister of Foreign Affairs M U M Ali Sabry has said the election will be held on October 5 or 12.

Members of the Samagi Jana Balawegaya (SJB) have said that the government should be accountable for the security of Opposition Leader Sajith Premadasa, the SJB’s presidential candidate. (Colombo/Jul17/2024)

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Sri Lanka rupee closes flat at 303.80/304.00 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed almost flat at 303.80/304.00 to the US dollar on Wednesday, from 303.70/304.00 to the US dollar on Tuesday, dealers said, while bond yields were down.

A bond maturing on 15.12.2026 closed at 10.60/75 percent, down from 10.82/92 percent.

A bond maturing on 15.12.2027 closed at 11.60/38 percent, down from 11.65/75 percent.

A bond maturing on 01.05.2028 closed at 11.72/78 percent, down from 11.80/90 percent.

A bond maturing on 15.09.2029 closed at 12.05/10 percent, down from 12.05/20 percent. (Colombo/Jul17/2024)

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Sri Lanka stocks close down, John Keells, Hemas, Hayleys push turnover

ECONOMYNEXT – The Colombo Stock Exchange closed down on Wednesday, data on its site showed.

The broader All Share Index closed down 0.41 percent, or 48.44 points, at 11,830; while the more liquid S&P SL20 Index closed down 0.52 percent, or 17.91 points, at 3,456.

Turnover was 1.2 million. A big part of this (Rs597mn) came from John Keells Holdings Plc (down at 194.25).

“There was foreign buying interest on John Keells and Hemas,” Softlogic Stockbrokers said.

“We saw foreign interest in selective counters persist.”

Hemas Holdings Plc contributed Rs143mn to the turnover, and the share closed down at 81.10.

Hayleys Plc contributed Rs156mn to the turnover, and the share closed up at 101.50.

The three crossings made up 67 percent of the turnover.

The capital goods counters, with all the bluechips, was the leading sector contributing to the day’s turnover.

With the exception of Hayleys and a couple of other companies, the counter saw most stocks close down or flat.

Sentiment around the banking counters also remained negative.

“The volatility in investor sentiments persisted. There are a lot of spectators in the market over the last few weeks, despite some positive news coming in.”

Treasury bill and bond rates have also dropped.

The top contributors to the ASPI were Melstacorp Plc (up at 86.00), SMB Finance Plc (up at 0.70), and TeeJay Lanka Plc (up at 40.00).

There was a net foreign inflow of 392 million. (Colombo/Jul17/2024)

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