Trade Ministry intends intervening in essential food imports
Sri Lanka’s Trade Ministry intends intervening in the importation of essential food items as local importers are struggling to meet their import bills due to a US dollar scarcity resulting in the piling of over 1000 food commodity containers at the Colombo port.
In recent weeks, prices of essential commodities have soared to unbearable proportions for consumers where the traders had been blamed for hoarding by the government.
However the request of Trade Ministry to the Finance Ministry for the approval of releasing dollars for food commodity is still under consideration owing to the current foreign reserves position which has dropped to US$1.5 billion not even sufficient for two weeks of imports, official sources said.
The government has given up price controls on essential commodities in an effort to combat black-market trading but food shortages became the order of the day pushing consumers into further difficulties, Ranjith Vithanage – Chairman of the National Consumer Rights Movement said.
The Consumer Affairs Authority enforcement of price control mechanism was not effective as traders increase prices ignoring their gazette notifications, he added.
He noted that the importers are selling essential food items keeping a profit margin, to wholesale dealers and they in turn sell it to retail traders at a high price. Finally consumers had to buy essential commodities from them spending more than the control price.
In the wake of this unavoidable situation, the Trade Ministry is ready to import food items through State Trading Corporation (STC) and sell it to consumers from ‘Sathosa’ retail centres and cooperative outlets countrywide, Minister Bandula Gunawardena told the Business Times. However, a senior official of the ministry noted that it has to introduce a rationing system to distribute limited stocks of essential commodities which will be imported by the STC in accordance with the availability of US dollars.
In this context, he said that Minister Gunawardena has already made a written request from the Finance Ministry to grant a bank guarantee or $100 million per month to handle food commodity imports sparingly.
He noted the process of importing essential food items could take some time next year as this was a new process which was not done since 1977.
During the implementation of the rationing system, ‘Sathosa’ outlets and cooperatives will have to sell the essential food items in minimum quantities like one kilogram of rice, sugar and lentils etc for each person.
Meanwhile the STC is now gearing up to venture into essential commodity imports in bulk from international foreign commodity trading companies directly. It has already selected and approved the list of international producers, exporters and suppliers after calling for the Expression of Interest (FOI) in September this year.
The state-owned trading entity is now maintaining a “register” of such foreign companies for the year 2022 to arrange the import of food commodities suitably at competitive prices as and when it required sufficient food stocks, he disclosed.
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