Following the slashing of wholesale prices of ten essential food items last week by the government, the disparity in prices of various food items amongst different markets in the country have further widened leaving questions whether the customers were benefiting from the move.
The government reduced the import taxes of ten food items on Wednesday and announced a maximum wholesale price for these items. The 131 Laksathosa outlets around the island also announced reductions in their prices with immediate effect while the 363 Co-op city outlets in the country are expected to follow within a week.
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| A trader gestures as he speaks to the Sunday Times. Below food items price-marked with new rates. |
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However as only 131 Laksathosa outlets operate island-wide, consumers are forced to patronise other markets which are situated closer to them.
In Colombo’s different markets including the Pettah, Kirulapone market and the supermarket chains, prices of food items varied sharply.
Prices of items such as potatoes had a disparity of as much as Rs.60 between the retail prices in Pettah and the Kirulapone markets and government said it may take up to two weeks before the market showed a reduction in prices.
Minister of Trade and Consumer Affairs, Bandula Gunawardena said though government could afford to reduce Laksathosa prices with immediate effect, it was unable to do this with other markets.
“This import tax reduction will only affect newly imported stocks, so consumers cannot expect the prices to change immediately. The market cannot be changed in a day,” he said.
A kilo of dhal was available at Laksathosa outlets at Rs. 149, but in markets situated elsewhere the prices were still as high as Rs.200 and Rs.220. Traders in Pettah claimed once the newly imported goods were available, they would bring the wholesale prices down to the government stipulated maximum price of Rs.140 per kilo.
Prior to last week’s price reductions, with dhal being slashed by Rs. 90, garlic by Rs.120, and canned fish by Rs. 81; prices of items since 2005 such as dhal had increased by 164% while sugar increased by 91%. During this period the salaries of 1.2 million public sector employees were increased only once.
Minister Gunawardena said that despite the government’s inability to control private sector salaries they had ensured a family of four would save up to Rs.2,500 per month due to the decrease in prices which was equivalent to increasing public and private sector salaries.
According to the Minister’s theory a family of four consuming around four kilos of sugar and three kilos of dhal would be able to save up to Rs. 2,400 a month as a result of these price reductions.
Citing the availability of vegetables from the north and east, he said in the next six months it was likely prices of these items too would decrease further.
President of the Old Moor Street Trade Association, K.P. Sundaram told the Sunday Times the view amongst the traders differed regarding government’s intervention in pricing.
“Some have reduced prices already while others are waiting to see what happens with the new stocks. Either way traders will have to eventually sell at the maximum stipulated price once new stocks come in,” he said.
Mr. Sundaram added consumers should not worry about shortages in supply of these items in the near future as traders and importers were not able to hold these items for long.
Meanwhile, opposition parties are accusing the government of mismanaging public funds while engaging in imbalanced price reductions which may have long term effects on the market.
JVP MP Sunil Handunnetti said with the import taxes being reduced government would be losing as much as Rs. 890 million in the next six months. He added government was only interested in securing votes atthe next election.
“It is obvious the government has been spending this money on their personal ventures while their claim to be protecting the local farmer has been proven false,” he said.
MP Handunnetti claimed government would increase prices once the election was over. |
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