Consignment will be maintained as a buffer stock to ensure no shortage
Trade Minister directs CB to release forex to clear 800 rice containers at Colombo Port
A Government-to-Government (G2G) agreement was signed with Myanmar yesterday to purchase 100,000 tons of rice, to maintain a buffer stock with immediate effect.
The Memorandum of Understanding (MoU) was signed by Trade Minister Dr. Bandula Gunawardena and Myanmar Deputy Commerce Deputy Minister Dr. Pwint San.
The rice stocks will be imported through State Trading Corporation (STC). The 100,000 tons of rice will be maintained as a buffer stock to ensure that there will be no shortage in the future.
Since June 2021, the Government has decided to import rice on four occasions, whilst removing the Maximum Retail Price (MRP) on the country’s staple food, giving room for the large-scale rice mill owners and traders to jack up prices at their convenience.
On 24 November 2021, the Cabinet of Ministers approved to import 100,000 tons of rice in a G2G agreement with Myanmar, to maintain sufficient buffer stocks and to stabilise local market price. The STC was given the approval to import at $ 460 per ton of rice from Myanmar to stabilise the local market prices and to offer the country’s staple food at an affordable price for the general public.
In a bid to counter possible shortages and maintain buffer stock, the Cabinet of Ministers on 27 September 2021, decided to import another 100,000 tons of rice from India and Thailand under a G2G agreement as per a proposal by Trade Minister Bandula Gunawardena.
In August, the Government decided to import 6,000 tons of rice through the Sri Lanka-Pakistan Free Trade Agreement (FTA) as a short-term measure to address the shortage of rice in the market. Previously in June, the Cabinet decided to import 100,000 tons of Samba under the G2G deal.
Early November, Finance Minister Basil Rajapaksa reduced the special commodity levy of Rs. 65 per kg of imported rice to 25 cents. The move is for six months from 2 November and will ensure sufficient stocks ahead of the festive season.
Sri Lanka’s annual rice consumption requirement is around 2.4 million tons and the paddy harvest for the 2020/2021 Maha season and the 2021 Yala season is around 4.8 million. The collective production of rice is about 3.2 million tons.
Meanwhile, the Trade Minister had informed the Central Bank to release necessary foreign exchange to release 800 containers of rice held at the Colombo Port.
“The Minister assured to clear the 800 rice containers stuck at Colombo Port with immediate effect, as stakeholders are faced with heavy warehouse charges. It is not our fault that banks are not releasing foreign exchange to release containers,” Essential Food Importers Association told the Daily FT.
They pointed out that it was unfair by the banks to not release foreign exchange for the goods imported. “When prices soar or there is a shortage of goods in the market people and authorities are blaming importers and traders, but the actual culprits are the banks,” they charged.
(FT)