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Private cartel demands duty cut to import rice
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Something better than nothing: Consumers buy Five kg each of Nadu from a Sathosa outlet. Pix by Indika Handuwala
By Kasun Warakapitiya
The rice crisis continued this week with shortages and high prices as the government initiated several steps to overcome severe shortages.
The government this week liberalised imports of rice for 12 more days while urging private small and medium rice millers to release rice stocks to Lanka Sathosa.
In a bid to keep Nadu at control prices, the government said this week rice would be distributed via Lanka Sathosa. Only five kilograms will be provided per person.
Nadu rice sold out quickly.
Lanka Sathosa chairman Dr Samitha Perera said rice would be ordered through small and medium-scale millers, who can then repay their loans.
“We now get paddy from the millers and can provide a kilo of Nadu for Rs 220 from our outlets. However, we have restricted purchases to only 5 kilos of rice as some merchants try to purchase bulk amounts of Nadu to sell for higher price.”
He added following the government decision to import 70,000 metric tonnes via Lanka Sathosa and the Sri Lanka State Trading Corporation (STC), each would import 5,200 MT of Nadu. Tenders were opened on Thursday. The first shipment would be imported in 10 to12 days.
Dr. Perera said 10,400 MT would be imported by STC and Lanka Sathosa and the remainder of 59,600 MT would be brought in later.
STC has opened tenders to import 5,200 MT initially.
STC Chairman, Ravi Fernando said that Lanka Sathosa imports would arrive earlier until private imports arrive and the shortage of Nadu would be minimised.
Mr. Fernando said buffer stock will be maintained in the medium and long term. A mechanism will be created to provide storage for small and medium-scale millers.
D. L Malage, Lanka Sathosa Deputy General Manager as well as acting chairman of the Cooperative Wholesale Establishment, said STC and Lanka Sathosa would import another 22,000 MT of rice each. The remainder would be imported later. 
He also said that President Anura Kumara Dissanayake and the Minister of Trade, Commerce, Food Security and Cooperative Development, Wasantha Samarasinghe held an emergency meeting with small and medium scale millers and got them to provide 100,000 kilos of rice to Lanka Sathosa daily. This will be in addition to the amount of rice tendered and purchased twice a week.
Monitoring will ensure that all 460 Sathosa outlets would provide 5 kilos of Nadu.
But,100,000 kilos is only enough for 20,000 purchases.
The Cabinet on Monday approved private rice imports without permits until December 20. But, importers want the government to reduce the Rs 65 tax for a kilo.
They said importing rice before December 20 as specified by a government decision, is difficult as there is not enough time for exporters to book space in vessels and transport rice from mills to ports.
Spokesman for the Essential Food Importers Association Nihal Seneviratne assured imports, but is unsure about importing before December 20.
In the busy festive season, exporters would find it difficult to obtain container transport and arrange shipments, he said.
A senior official of the Consumer Affairs Authority who claimed anonymity, explained that the government is facing a precarious situation as the officials have to balance the imports as well as the local situation.
He pointed out that if imports arrive during the harvest season, farmers would be affected, as millers would purchase paddy at low prices. But to get private imports speeded up, if the government reduces taxes, or reduces MRP, the importers would profit from it.
If the government removed the control prices, the CAA would be unable to control rice price fluctuations, he said.
Meanwhile, Hemantha Samarakoon, CAA Chairman, told the Sunday Times that millers are trying to create a view that the gazette issued during former president Gotabaya Rajapaksa’s time should be removed.
That gazette imposed a control price of Rs 220 on Nadu. However, if the control price is removed, a kilo of Nadu could sell at Rs 270, he said.
“Even though the control price is Rs 220, Nadu is illegally sold for Rs 230 to Rs 235.’’
Mahinda Amaraweera, former agriculture minister, said that the government has failed to draw out the hidden stocks of paddy.
Based on cultivation in the last season, 3 million MT of rice should be produced, and from that, what is needed is less than 2.4m MT. Rice in being imported when there is an excess, he said.
Mr Amaraweera said the government is being controlled by the main millers.
When the issue of rice shortage was raised in Parliament on Friday, Trade Minister Wasantha Samarasinghe said that some millers have borrowed from banks and do not supply to the market. “From yesterday onwards many millers have started to provide rice to Lanka Sathosa. They received 100,000 kg of rice yesterday and even the same amount was received today,” he said.
| Small millers deterred by high paddy costs Small-scale millers say most have closed down their mills as they are unable to operate when the price of paddy has risen to Rs 150 to Rs 160. D.K. Ranjith, chairman of the Maradagahamulla rice producers association, said that if they produce rice by paying the hoarder’s price, a kilo of Nadu could cost Rs 270. He said most of the paddy is in the hands of third parties who have large storage facilities. They are hoarding paddy and are only releasing at prices above Rs 150. “We can’t spend that kind of money to purchase paddy for a higher price and sell above the Rs 220 maximum retail price,” he said. He said that Nadu rice would be made available by importing and that the hoarders would cut prices. Mr Ranjith said that small-scale millers have faced injustice as they are unable to carry out milling and the government was forced to import rice. He also said that the Cooperative Wholesale Establishment (CWE) and Lak Sathosa had meetings with few medium-scale millers and had offered them assistance by giving an assurance to banks on loan repayment after selling rice and getting paddy milled and distributed via them. However. he lamented that the small-scale millers were not informed of such a mechanism or given such assistance, and added that most do not have capacity to have stocks of rice held as loan collateral.
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