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70,000 tonnes of rice in storage for two years, while imports continue
A well stocked PMB warehouse in Hambantota. Pic by Rahul Samantha Hettiarachchi
Thousands of tonnes paddy are languishing in stores of a state-owned organisation, while rice is being imported and the inadequacy of rice in the market is being claimed as an “artificial shortage’’.
State-owned Paddy Marketing Board, which buys paddy from farmers for a guaranteed price, is yet to clear a stock of 70,000 metric tonnes at its warehouses. Some of the stock is nearly two years old.
Farmers in Kilinochchi complain that according to authorities, since existing stock has not been sold, they are unable to buy the produce from the next growing season.
Muthu Sivamogan, secretary of Iranamadu Farmers Federation in Kilinochchi told the Sunday Times that farmers are selling their produce to private mill owners who come from the south.
“Though the prices are not fixed and subject to change every day, we have no option other than to sell to private millers. The drought has halved our harvest and in some instances destroyed it completely,” Sivamogan said.
Kilinochchi farmers have been told by officials at the District Secretariat that tenders have been called to sell the paddy but the process is slow as there are no major millers in the district.
Major millers use small scale mill owners to buy the paddy at cheap prices. In some cases in Polonnaruwa and Ampara, big mill owners have provided money to small mill owners to bid for the tenders.
Although 70,000 metric tonnes of paddy are being held in warehouses of the Paddy Marketing Board, the government has approved private importers to bring in 250,000 metric tones of rice to ease the “artificial shortage” of rice in the market, a senior official at the board said.
“The government directed the board to hold back at least 50,000 metric tonnes of paddy to be processed as rice and to be distributed through Lanka Sathosa outlets. The rest of the paddy would be sold to private mill owners,” he said.
Explaining how an “artificial shortage’’ of rice emerged, he said the small scale mill owners who purchased large volumes of paddy sold the stock to big traders who then hold on to the rice until prices rise.
Most of the government paddy stores in the north and east are storing paddy that is two years old. So the PMB could not buy any more from farmers.
Chairman of the Essential Food Commodities Importers and Traders Association Nihal Seneviratne, told the Sunday Times that at least 100,000 metric tonnes of rice out of a quota of 250,000 metric tonnes, have been imported.
“The government has already distributed the paddy from its stores. What they have now is not enough for a week’s consumption. We are expecting more imports of rice,’’ he said, adding that the depreciation of the rupee against the US dollar is a problem.
The Cost of Living Committee made up of Malik Samarawickrema, Minister of Development Strategies and International Trade; Ravi Karunanayake, Minister of Finance; P Harison, Minister of Rural Economic Affairs; W D J Seneviratne, Minister of Labour & Trade Union Relations; Akila Viraj Kariyawasam, Minister of Education and Rishard Bathiudeen, Minister of Industry and Commerce issued clearances to private traders to import 250,000 metric tonnes of rice.
Pettah Traders’ Association president P Sundaram alleged that there is a rice mafia operating in the country trying to dominate and fix prices. The government was making it worse by importing more rice.
According to a gazette notification issued last week on new maximum retail price, a kilo of imported nadu would be sold at Rs 72, locally milled nadu Rs 80, a kilo of imported raw (kekulu) rice is Rs 70, locally milled raw rice Rs 78, and a kilo of imported samba is Rs 80. Locally milled samba (excluding keeri samba and suduru Samba) is Rs 90 per kilo.
Meanwhile, the Indonesian government last week shipped a donation of 10,000 metric tonnes of rice to Sri Lanka following a request by President Maithripala Sirisena. The cabinet announced in late January that rice could also be imported from Indonesia and Vietnam, if prices do not drop.
The Sunday Times learns that the government has instructed the PMB to hold 2,000 metric tonnes of paddy in reserve to be distributed by the World Food Program. According to a senior official from the board, paddy stores in north would be cleared for this initiative.
| PRICE-GOUGING TRADERS FEEL THE HEAT More than 42,000 kilos of rice was seized this week by the consumer watchdog at the Pettah market from three traders who hoarded stocks. Also, 87 traders who are accused of violating the maximum retail price face charges brought by the Consumer Affairs Authority. Under a Gazette notice on February 17 by the consumer watchdog, the maximum retail price for Nadu, raw rice and samba was fixed. A kilo of imported nadu is Rs 72, locally milled nadu Rs 80, a kilo of imported raw (kekulu) rice is Rs 70 and locally milled raw rice is Rs 78. A kilo of imported samba (excluding keeri samba and suduru samba) is Rs 80. This week, Lanka Sathosa, Sri Lanka’s largest state owned retail chain started selling raw rice below the maximum retail price and also plans to take the rice sales to street locations. The consumer watchdog says it has deployed 250 officers to monitor prices. Consumers are urged to call the hotline number 1977 or call direct at 11 7755481-3. |