News
Rice price wrestling continues amid output shortage call
View(s):By Senuka Jayakody
Sri Lanka is expecting a shortfall in paddy output in the Yala season that is drawing to a close, while the purchase price of paddy and retail price of rice remains a contentious issue at a time of increased food insecurity.
Imports will help cover the expected shortage, said Professor Buddhi Marambe, of the faculty of agriculture of the University of Peradeniya.
In March and April, researchers had predicted a severe shortage by October, based on 430,000 metric tonnes produced in the first six months, with a monthly consumption of 195,000 MT.
This means, between 75,000 MT and 100,000 MT needs to be imported every month, which the Government had brought in, he said.
Usually, in the Yala season, about 1.9 million MT is produced while during Maha, the output is about 3.1 million MT, but there is a 40% loss in production of the 2022 Maha season. A further loss can be expected because adequate fertiliser and other inputs were not provided early.
Commenting on claims by Agriculture Minister Mahinda Amaraweera that a greater extent had been cultivated, Prof Marambe said that itself does not ensure a higher output.
“One thing can be said — we cannot have a failed Maha season,’’ he said.
Ranil Wickremesinghe, who was then Prime Minister, had warned of food shortages after August, and within days, the price of rice rocketed and store shelves emptied. The Consumer Affairs Authority, added to the crisis by ordering price controls.
In this situation, in June, Mr Amaraweera said 470,000 hectares would be cultivated compared with the usual 400,000 hectares and so rice will need to be imported to ensure supply for about two months. He had told Parliament in early June that in the 2020 Yala season, 403,362 hectares had been sown.
The secretary of All Island Farmers Federation, T. B. Sarath said farmers are selling nadu rice at Rs. 105, which he predicts, will make growers lose interest. He dismissed as false the claims by Mr Amaraweera that a shortage of rice could be expected by December. A shortage would be deliberately created to drive up the price of rice, he said.
However, with about a 40% loss of the Yala crop, he expects a shortfall in February, or March.
Araliya Rice Producers, a big player in the market, said there is enough rice and imports are not necessary.
The company also said that given the processing costs and the paddy purchase price of Rs. 120, rice should be retailed at Rs. 240 a kilo, and not at the Government determined price of Rs. 220. 
Producers will sell rice at the Government set retail price until September 18, Araliya Rice said.
However, a small-scale rice miller in Anuradhapura, said some millers have shut down.
He said big millers can stay in business since they have accumulated stock. He added that a good harvest from the upcoming Maha season is doubtful.
Regardless of Government prices, millers buy paddy at Rs. 130 to Rs.135. Given the cost of processing the paddy, the Government prices cause losses to the millers, he said.
At a press conference this week, Mr Amaraweera claimed self-sufficiency in rice and that imports can be halted from the Maha season onwards.
He said the Paddy Marketing Board has purchased three million MT of paddy.
The Ministry of Trade also expressed support to the Ministry of Agriculture to increase rice production in the upcoming Maha season. But, if a shortage were to occur, imports would be considered through the Indian credit line, since open account imports would end on August 30.
Mr Amaraweera also said a stock of imported rice is being maintained.
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