MOHAMMED RASOOLDEEN
COLOMBO
Sri Lankan authorities rushed to control a surge in the cost of basic commodities on Wednesday by fixing their prices and confiscating stocks, a day after declaring an economic emergency triggered by a steep fall in the country’s currency value amid a foreign exchange crisis.
The wide-ranging regulations, introduced by President Gotabaya Rajapaksa on Tuesday, apply to the supply and hoarding of essential food such as paddy, rice and sugar and their prices, in order to control rising inflation as private banks run out of foreign exchange to finance imports.
It follows a devaluation of the Sri Lankan rupee which fell by 7.5 percent against the US dollar this year.
Officials said they had seized tons of sugar and other consumer goods held by traders, urging all outlets to follow the new price list as part of the initiative.
“The government has seized more than 5,000 metric tons of hoarded sugar from errant traders,” Janaka Wakkumbura, State Minister for Small Plantation Crops, told Arab News.
He added that authorities had “enough stocks for the next five months”, capping the price of sugar, for example, at Rs130 ($0.65) per kilo as against Rs240, its previous cost.
“Violators could face up to six months in prison and have their goods taken,” Wakkumbura said.
President Rajapaksa has also appointed a top army officer, Retired Major General M. S. P. Nivunhella, as Commissioner General of Essential Services to coordinate the supply of basic goods and oversee operations.
“The authorised officers will be able to take steps to provide essential food items at concessionary rate to the public by purchasing stocks of essential food items,” Rajapaksa said in a statement on Tuesday before declaring the economic emergency.
“These items will be provided at government guaranteed prices or based on the customs value on imported goods to prevent market irregularities,” he added.
Meanwhile, State Minister of Consumer Protection Lasantha Alagiyawanna said legal action would be taken against all unregistered traders by next week.
“To control the price of sugar and rice, a special order was issued on June 11, 2021, authorizing the registration of paddy, rice and wheat flour stores under the Consumer Affairs Authority Act,” he told newsmen
“Still, middlemen were hoarding stocks of rice and creating an artificial shortage,” he said, adding that his ministry officials had sealed 52 unregistered paddy storage facilities during raids conducted in the North Central Province last week.
The artificial shortage resulted in long queues outside stores with civilians looking to source food and other commodities in recent days.
This is despite Sri Lanka observing a strict 16-day curfew until next Monday to curb an increase in COVID-19 cases as the country of 21 million struggles to contain the outbreak that is claiming more than 200 lives a day.
Shaheera Rozmin, a school teacher, told Arab News that food prices had been “fluctuating daily.”
“Some of the imported medicines are being sold at a 50 percent increase citing the new dollar rate. Hope this new rule will do some good for consumers,” she said.
Retailers, however, said the price hike was solely due to “artificial demand created by traders who hoard important food stocks.”
“From the farmers, thee hoarders buy the paddy at higher rate than from the government and they resell them at exorbitant prices,”
Mohammed Fazeel, General Manager at the Mutti-Rice Wholesale Cente in Colombo, told Arab News.
He added that despite the government fixing the price of rice at Rs 98 per kilo, onions and potatoes at Rs 120, “they are not strictly followed.”
Meanwhile, to facilitate the island nation’s financial crisis, the International Monetary Fund (IMF), Bank of China and Bank of Bangladesh pledged US$1,237 million on Wednesday to strengthen Sri Lanka’s foreign reserves.(Arab News)
