SRI LANKA: Rice from Myanmar to help offset high local prices

Photo: Amantha Perera/IRIN

A woman checks rice at a grocery store in Colombo, Sri Lanka. Rice prices in Sri Lanka hit an all-time high in March due to rising prices on the world market

COLOMBO, 29 May 2008 (IRIN) - Sri Lanka expects a shipment of rice this week from cyclone-battered Myanmar will help offset the high retail price of the island's staple food.

Some 8,000MT will be sold to consumers immediately through government-run stores, the Sri Lankan secretary of trade and consumer affairs, RMK Ratnayake, said.

Ratnayake said the shipment was part of a 50,000MT consignment that Sri Lanka had ordered from Myanmar in March at US$400/MT. The 3 May cyclone delayed the arrival of the first shipment and it was unclear when the rest of the delivery would be made.

"Sri Lanka has no shortage of rice," Ratnayake told IRIN. "Unfortunately, there is hoarding going on. So we ordered this shipment to show the big businessmen that the government can supply good quality rice at a reasonable price."

Rice prices in Sri Lanka hit an all-time high in March due to rising prices on the world market. The government accused local rice mill owners and shop-keepers of stockpiling and imposed price controls in April.

Sri Lanka produces most of its annual requirement of two million MT of rice. "At any time, the maximum deficit is only about 100,000MT," Ratnayake said, adding that this was the first time the island was importing rice from Myanmar after several decades.

Prices of the popular parboiled "samba" variety have topped Rs100/kg (just less than $1) while the cost of other types of rice similarly went up, pushing the staple beyond the purse of many Sri Lankans.

Government-imposed price controls

Government price controls were imposed to limit the surge to Rs70/kg, but the open market has maintained its own level. The authorities have criticised rice millers for releasing poor quality rice to the market while reserving the superior grades to be sold at high prices.

It seems unfair that we are getting rice from Myanmar when their own people are suffering. Sri Lanka should have offered to suspend the contract for some time till Myanmar was ready to send it.

The UN World Food Programme (WFP) and UN Children's Agency, UNICEF, and other international NGOs warned recently that skyrocketing food prices would compel them to cut back on food assistance to needy sectors of the population, such as people displaced by the ongoing conflict.

"Anything that reduces the pressure on food stocks here is to be welcomed," said UN spokesman Gordon Weiss of the government's move.

Nonetheless, some consumers were concerned that the arrival of the shipment was untimely, given the emergency in Myanmar.

"It seems unfair that we are getting rice from Myanmar when their own people are suffering," said Marina Ismail, a retired sociologist based in the capital, Colombo. "Sri Lanka should have offered to suspend the contract for some time till Myanmar was ready to send it."

Ratnayake said the government was also set to negotiate with Thailand for 25,000MT to maintain a buffer stock, which will tide it over a lean period expected around December.

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