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Flour price hike suspended, pending talks with new government
The premier flour supplier to Sri Lanka has put on hold any price increase of its products pending discussions with the new government.
The move came after the company, Prima Ceylon (Private) Limited, rescinded a recent price increase of Rs. 8.50 a kilo of flour.
“As the newly-elected President is making the best effort to put the Sri Lankan economy back on a strong recovery path while addressing many challenges, Prima Ceylon (Private) Ltd will assist the President’s endeavours by withdrawing the recent price increase pending discussions with the new government,” the company stated.
The company increased flour prices immediately before the Nov 16 election, brought down prices after the former government intervened, but again increased prices after the poll.
Bakery owners, acting on the company’s decision, increased the price of loaf of bread by Rs. 5 on November 16 but reduced it five hours later after Prima withdrew its price increase.
Bakery Owners Association president N.K. Jayawardena said bakers had raised prices of their products because two companies that import flour had increased prices.
“We increased prices temporarily to give an indication to the government that the bakery owners and bakers were facing hardship due to the fact that prices of ingredients have increased,” he said. The government had given an assurance that it would look into the matter and simultaneously the two main wheat flour importers had reduced their prices.
Mr. Jayawardena claimed the government had indicated it would encourage other companies to import wheat flour by reducing the tax on wheat flour, which is currently Rs.37.50 per kilo.
A source at Prima said the sudden price increase had been caused by a 23 per cent increase in exchange rates as the dollar rate increased. “We had to pay Rs. 180 to get the same amount we had previously bought for Rs. 153,” he said.
The source also said Prima had borne the cost of rises in inflation over the past 12 months as the previous government had not allowed compensatory price increases.
The Director-General of the Consumer Affairs Authority and the authority’s CEO, M.S.M. Fouzer, were not available for comment.