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Friday December 9th, 2022

Sri Lanka’s emergency regulations are to control food mafia: agriculture minister

ECONOMYNEXT – Sri Lanka’s decision to invoke emergency regulations to control essential food prices were not due to a food shortage but to control a “food mafia”, Agriculture Minister Mahindananda Aluthgamage told parliament on Monday (06).

President Gotabaya Rajapaksa promulgated emergency laws last week and seized sugar stocks of key importers saying they were ‘hoarding’ goods they themselves had imported.

The move came after sugar price jumped to 225 rupees a kilogram from an earlier market price of around 130 rupees, while the price of Sri Lanka’s staple food rice rose between 125 to 225 rupees though the government had announced a control price of below 100 rupees.

“There isn’t any food shortage in the country,” Aluthgamage told parliament starting the debate of emergency regulations on essential foods.

“It is not a food shortage but a food mafia. The new emergency regulations are to control this mafia.”

Though the government has declared a controlled price, consumers say they cannot buy rice or any other essential commodity at the fixed prices.

The government has made many commodities available at state-run Sathosa retail outlets at controlled prices, but consumers have to queue up for hours to buy only a limited quanity of essential commodities.

The minister said 800,000 hectares of land have been under paddy cultivation in the last ‘Maha’ and ‘Yala’ cultivation seasons and the country will have around 3.2 metric tons of rice once all paddy is converted.

“There is no shortage of rice. We have no problem of feeding the people of this country. We also get 2.5 to 3 million metric tons of vegetables to economic centers every day. So I can say there is no rice or vegetable shortage.”

Price-takers, CAA-led shortage

However, prices have been high and consumers have no option but to become price-takers and buy at higher prices even from small vendors especially during the lingering lockdown.

Sri Lanka is now undergoing a shortage of milk powder after the Consumer Affairs Authority (CAA), which had previously created shortages in lentils, tinned fish as well as cooking gas, refused to allow a price hike.

Market players have said the government’s price control mechanism will only worsen the supply and will increase prices when people are struggling to make ends meet in the pandemic.

Money printing to artificially keep interest rates at a record low have driven dollar yields above that of rupees and importers have also been denied forward foreign exchange cover, leaving traders who bring down food commodities like sugar on 90 or 180 day bills without a reliable hedge or guide to price their goods.

Minister Aluthgamage said though the government has declared controlled prices for rice varieties Nadu (96 rupees per kg), Samba (96 rupees per kg), and Keeri (99 rupees per kg), and it has also declared a fixed price for paddy to be bought from farmers between 50 and 55 rupees.

Rice prices have also gone up with domestic collectors given oligopoly powers by the government with an import ban on rice.

“We will be happy if farmers get 70 rupees per kilogram. But they don’t. Remember each of these mafia traders earns 50 billion rupees per cultivation period,” Aluthgamage said.

“If they are not selling Nadu at 96 rupees per kilogram and only selling at 125 rupees, then we have to activate the CAA Act. But this act was not effective because it only allows a 2,500 rupees of penalty.”

And now the government has planned to increase the penalty from between 100,000 rupees and two million rupees along with a six-month imprisonment, the minister said.

“We can’t do anything without legislation. We tried our best to bring it without any emergency law, but all the process takes three months. By that time the cultivation season would be over,” Aluthgamage told parliament, justifying the emergency law.

Meanwhile, the opposition National People’s Power (NPP) said it is clear that President Rajapaksa did not invoked emergency regulations through the Public Security Ordinance with the welfare of the country in mind.

“Rather, it is yet another step forward in a relentless desire to amass power.  These new powers place the democratic rights of the people and the rule of law in this country already under assault, at further risk,” the Janatha Vimunthi Peramuna (JVP)-led alliance said in a statement issued on Monday.

The NPP said it is the regime’s “incompetence and disconnect with the needs of people that has led to an alarmingly chaotic situation in” and not any lack of presidential powers.

“In our view, invoking the Public Security Ordinance at this point to unleash emergency powers, is a sign of a failing regime desperately trying to cling to power at all costs.  The chaos that has been created by the mismanagement of the COVID epidemic is being used by this government to weaken democracy in our country.   Therefore, we will do our utmost to force the government to reverse its decision and we call upon the public to join us to protect our democratic rights and the future of our country,” the NPP said. (Colombo/Sep06/2021)

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Sri Lanka president slams power regulator chief after conflicting with minister

ECONOMYNET – The powers to change the electricity tariff in Sri Lanka is vested with the Minister of Power and not the Public Utilities Commission (PUCSL), President Ranil Wickremesinghe told the Parliament.

The minister of Power and Energy, Kanchana Wijesekara has requested an upward price revision to be implemented in two phases both in January and July next year, saying the recent tariff hike was not enough for the state-run utility provider Ceylon Electricity Board (CEB) to continue uninterrupted power supply.

However, Jaynaka Ratnayake, the Chairman of the PUCSL had said  the recent tariff hike is enough for the CEB to cover the cost of production and it will not allow another price hike. However, he has said a twice a year price revision is necessary though it should be in April and October instead of January and July.

President Wickremesinghe said the PUCSL chief was opposing the tariff hike due to his personal reasons.

“The power is vested with the Minister and me. I am the one who made the PUCSL act and I know what is in it,” Wickremesinghe told the parliament on Thursday. quoting a letter from the Attorney General which mentioned provisions in the island nation’s Electricity Act.

Accordingly the Act, the PUCSL would be statutorily obliged to give effect to such policy. It is observed that neither the Act nor the PUCSL Act contains any provisions that empowers the PUCSL to change or act invariant of such policy guidelines.

“The Chairman of the PUCSL is misguiding the general public. I have to meet him and see,” Wickremesinghe said.

WIckremesinghe said the Chairman does not want the tariff hike because he owns one of the highest electricity consuming companies.

“He is the Chairman of the Trillium corporation. It is the firm that takes up the most energy”, he said.

The Trillium group is managed by Janaka Ratnayake and he also holds positions as the chairman and CEO of Trillium Property Management & Services Ltd., City Housing and Real Estate PLC, Trillium Residencies Ltd., Computer Care (Pvt) Ltd., and Rent a Comp Services (Pvt) Ltd., and JR Management Consultants (Pvt) Ltd.

“It means when the electricity bill increases, his expenses increase as well”

He said the CEB still has a loss of 300 billion rupees since 2013 and it needs to be covered.

The CEB issue can be solved only in three ways, either printing more money, increasing value added tax or increasing the tariffm, he said. (Colombo/Dec08/2022)

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Sri Lanka President bemoans over inconsistent LNG deals

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe bemoaned over successive governments’ liquefied natural gas (LNG) deal that has brought in all the world powers into the discussion.

Wickremesinghe’s center-right United National Party (UNP) had discussions with India and Japan between 2002-2004 for an LNG project.

“Following dialogues with India and Japan, the UNP government could come to agreements to get two LNG power plants. After we were defeated the successor government, without cancelling those agreements granted it to New Fortress company in USA,” Wickremesinghe told the parliament.

“Thereafter, as they did not like New Fortress, they gave it back to Pakistan and China. So within the same premises, there were China, Pakistan, India, USA, Japan and only Russia was not there.”

“It was wonderful that a world war did not ignited there as there were five main powers in the world.”

“Now there is no LNG or anything here and now they ask me to solve this issue.”

Wickremesighe’s outburst comes as his government is forced to raise tariffs on power prices after successive governments failed to implement cheap and renewable power generation projects.

He said a total loss for the state-run Ceylon Electricity Board since 2013 was 300 billion rupees and a possible drought next year could increase the 2023 electricity cost to 420 billion rupees.

“If it rained, we need Rs. 352 billion while Rs. 295 is required if rained so much to have floods. How are we going to find this money? We would have to print money, but Rupee would depreciate. We would have to increase VAT but it would increase the price of all commodities or to charge it direct.” (Colombo/Dec08/2022)

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Air quality drop forces Sri Lanka to close schools; public warned

ECONOMYNEXT – A rapid drop in air quality in Sri Lanka has forced the Colombo government to close all schools across the country after a deep depression over Southeast Bay of Bengal, officials said.

The Education Ministry, issuing a special notice on Thursday said, it has decided to close all government schools for Friday, after discussing with the officials in Meteorology Department and Disaster Management Center.

An official said the drop was due to the deep depression over Southeast Bay of Bengal carrying the air from India.

Due to the depression over South east Bay of Bengal (370 km east of Trincomalee) has concentrated into a cyclonic storm “Mandous” by Wednesday night.

“Cyclone in the Bay of Bengal that is the prime reason for the increase in the pollution load as we receive more wind from India,” H.D.S.Premasiri, Senior Scientist, Coordinator-Air Quality, noise and vibrations at National Building Research Organization (NBRO) told EconomyNext on Thursday.

Officials said there is a likelihood of the cyclone moving west-northwestwards and further intensify into a severe cyclonic storm tonight and cross North Tamil-Nadu, Puducherry and South Andhra Pradesh coast around midnight of 09 th December and the maximum wind speeds will be 70-90 km per hour and can increase up to 90 in sea areas.

“Hopefully, today we can expect normalization in the environment and the effects of the fog will disappear”.

According to the NBRO’s real time Air Quality Index Indicator, the quality of air in northwestern coastal district of Puttalam has dropped drastically and indicated a particular matter (PM) 132, while Kegalle (85) and Mannar (84) were the districts which had next worst air quality.

According to NBRO, Battaramulla, Polonnaruwa, Dambulla, Kegalle, Mannar and Puttalam indicate a poor quality of air due to higher PM.

“The fog will lead to lung and breathing issues,” Premasiri said.

“So the public is warned to wear a mask when they travel outside. The pollution highly prevails in city areas and has a less impact on the other parts of the areas.” (Colombo/ Dec08/2022)

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