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Saturday October 1st, 2022

Sri Lanka to use US$20mn from Indian credit for animal feed

ECONOMYNEXT – Sri Lanka plans to use 20 million US dollars from a billion US dollar credit line from India to import maize to make animal feed, Trade and Food Security Minister Nalin Fernando said.

“One of the biggest problems we had in recent months was the difficulty in getting raw materials for poultry farmers to make feed,” Trade and Food Security Minister Nalin Fernando told parliament.

“That is one reason the price of chicken and eggs went up so sharply.

“So we have allocated 20 million US dollars from the Indian credit line to import maize.”

Sri Lanka printed money for two years to suppress rates leading to a collapse of a soft-peg with the US dollar from 182 to 360 to the US dollar with the currency falling from 200 from March 2022.

Due to a failed float and continued money printing forex shortages continued.

Sri Lanka’s domestic maize production was also hit by a ban on chemical fertilizer. Though it was relaxed in late 2021, forex shortages from the broken peg made it difficult to import fertilizer.

Minister Fernando said imports of maize will be made until domestic production recovers.

Meanwhile the central bank had also raised rates to kill private credit and reduce forex outflows and inflation. The external sector as well as domestic money growth has sharply showed in May and June 2022. (Colombo/Aug12/2022)

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