ECONOMYNEXT – After repeated failure to maintain lower rice prices, Sri Lanka is now looking to import 6,000 metric tons of rice from Pakistan to overcome shortage in the short term and establish five modern rice mills in five major rice producing districts in the near future.
All efforts of President Gotabaya Rajapaksa’s administration to fix maximum retail price in the market below 100 rupees have failed amid heavy demand for the staple food and uncertainty over COVID-19 lockdowns.
However, official data showed Sri Lanka has produced 3.2 metric tons of rice in both 2020/21 Maha cultivation seasons (Nov–Feb) and the 2021 Yala cultivation season (May–Aug), nearly 50 percent higher than the country’s annual consumption of 2.2 million metric tons amid hoarding by private mill owners.
Local consumers still pay higher prices amid rice shortage speculations.
The cabinet of ministers have approved to import 6,000 metric tons of rice immediately following the provisions under the Pakistan-Sri Lanka Free Trade Agreement as a solution for a prevailing rice shortage in the market, the cabinet office said on Wednesday (17).
The cabinet has also approved a proposal to establish five rice mills with modern technology in Kurunagala, Anuradhapura, Batticaloa, Hambantota, and Ampara districts under private cooperative partnership to purchase rice from the next Maha season and distribute it through state-run Lanka Sathosa and co-operative societies, the cabinet office said.
The objective is to “sell it at a reasonable price as a solution to continued market price-hikes of rice”, it said in a statement.
Despite the state-run Consumer Affairs Authority fixing the price of raw rice and samba at 90 rupees per kilogram last year, they were sold at higher prices and now the prices are hovering between 120-130 rupees.
Later, the government tried to control rice prices through purchasing and selling through its own arm Lanka Sathosa, which had to limit the quantity sold for individuals due to overwhelming demand at government controlled price.
In Sri Lanka, rice imports by the private sector are banned and several large millers have stocks under an import substitution strategy. (Colombo/Aug18/2021)