Prices of food items decline with import tax cut

By Gamini Warushamana

Seasonal demand and supply constraints will push up food prices during the festival season, market sources said. Prevailing bad weather conditions in many parts of the country has disrupted the supply chain of vegetables and many of the farmlands in the Matale district have been destroyed, sources said.

The manager of the Nuwara Eliya special economic centre said that supply has reduced due to continued rain. However, prices have not increased as demand dropped due to transport difficulties.

Last week the wholesale price of vegetables in Nuwara Eliya market were: cabbage Rs. 55-60 per kg, carrot Rs. 135-140 per kg, beet root (with leaf) Rs. 85-90, cut beet root Rs. 100-105 per kg and potatoes Rs. 130-135 per kg.

The price of rice has increased, despite the price control imposed by the Consumer Affairs Authority (CAA) mainly due to the drought that prevailed during the year and the loss of the Yala paddy harvest.

The maximum retail price of Nadu rice is Rs. 60 per kg and it is Rs.70 per kg for samba. However, retailers said that the wholesale price was already above the maximum control price and therefore they could not sell rice. This will lead to a rice shortage during the festive season, they warned.

Meanwhile, the Secretary of the Ministry of Agriculture has said a rice shortage is looming.

However, in the Pettah market, the wholesale price of rice remained below the maximum retail price. Red and white Nadu rice sold between Rs. 58-59 per kg and samba at Rs. 67-68 per kg. Traders said that mill owners are attempting to manipulate prices and samba prices will increase during the festive season.

Meanwhile, after the Government removed import tax on onions and potatoes, the prices of these items have reduced sharply. Supplies now come from Pakistan, India and China. The wholesale price of potatoes range from Rs. 70-100 per kg, proprietor of Nachian Trading at 4th Cross Street said.

Potatoes imported from Pakistan are sold at Rs. 70-80 kg while Indian potatoes are sold at Rs.100 per kg and potatoes imported from China are sold at Rs. 80 per kg. Big onions and red onions imported from Pakistan and India are available and market prices have decreased sharply. Local supplies of potatoes or big onions are not coming to the Colombo market, traders said.

The Department of Census and Statistics said that price increases during the festive season is inevitable as demand increases.

The Director General of the Department, D.C.A. Gunawardena said that in October the prices of many items including vegetables, fish and fruits were low with oversupply. In November, prices increased with supply constraints due to heavy rain, government tax on several items, gas price, water bill increases and inflationary pressure. From the first week in December, vegetable prices have shown a gradual decline with supply increases. However, prices will increase with seasonal demand and already prices of vegetables such as leeks, green chillies and fruits and items such as eggs have increased, Gunawardena said.