Food prices to remain low during festive season

By Nadia Fazlulhaq

The government granted duty concessions to a select group of importers to keep food prices down for the coming Sinhala and Tamil New Year season.

Among the 176 importers of the Pettah Trade Association, about 60 importers signed an agreement to have a stable maximum price from March to April at a meeting between the importers and the Minister of Trade and Consumer Affairs, Bandula Gunawardena.

Mr. Gunawardena told a cabinet news conference last week that prices of essential items would not be increased during the New Year but did not disclose details of the duty free concessions that were granted.

“We discussed with leading importers and came to an agreement over the maximum prices of essential goods during the Sinhala and Tamil New Year season,” the Minister said.

He added that this was the first time main importers agreed upon such a decision even though many traders complained that they disagreed with the decision.

One of the importers strongly condemned the action taken by the Government claiming the decision was taken among a few importers and they had to maintain the same prices that were agreed to.

“A large number of importers disagreed because this is a bond and they have to meet the terms in it, but if the prices in the open market are very low it might be a disadvantage to the importers,” said one of the importers.

He said in the Indian market a kilo of dry chillies was between SL Rs. 135-140 and the Government hoped to sell a kilo for Rs. 147 between March and April.

“The price of dried chillies may go down to even Rs. 120 which could be a disadvantage for the importers who signed a bond to sell for Rs. 147,” he said.

President, Old Moor Street Association, K. Pulaniandy Sundaram said the agreement may not succeed as it was signed among a few importers.

“By signing an agreement with importers it’s difficult to expect to control the retail prices, especially in the Pettah market. If the Govt has an idea to create a competitive export market with a reduced price to the consumers they should import directly and sell to the retail market,” Mr. Sundaram said. He added the agreement was for wholesale importers, whereas retail traders could introduce higher priced goods into the market.