Importers warn of artificial shortage over stipulated MRPs

by Rukshana Rizwie

Importers of essential commodities have warned that there may be an artificial shortage in the market should the government proceed with the enforcement of the stipulated maximum retail price for 16 essential commodities without reviewing levy and tax policies.

Speaking to the Sunday Observer, Nihal Seneviratne, President of the Essential Food Commodities and Traders Association said their main concern was over the Rs.30 levy per kilogram of imported sugar. “With a new maximum retail price, importers could face losses in the range of Rs.750 million to Rs.900 million since we already have 25 metric tons of buffer stocks.”

The Ministry of Industry and Commerce last week announced a set of maximum retail prices (MRP) for 16 essential commodities which came into effect through a gazette notification from midnight Thursday (14).

According to the gazette notification, the retail price for Chicken with skin Rs 410 per kg while skinless is Rs 495 per kg, red dhal Rs 169 per kg, sprats (Thai) Rs 495 per kg, sprats (Dubai) Rs 410 per kg.

Chickpeas Rs 260 per kg, green grams Rs 220 per kg, canned fish 480 grams Rs 140 (105 grams Rs 70), white sugar Rs 95 per kg, white flour Rs 87 per kg, full cream milk powder imported Rs 810 per kg local Rs 735 per kg, imported potatoes Rs 120 per kg, imported big onions Rs 78 per kg, dried chilies Rs 385 per kg, dried Fish – Katta – Rs 1,100 per kg, dried fish – Salaya– Rs 425 per kg, Maldives fish –Rs 1,500 per kg, and Sustagen – Rs 1,500.

Pettah Traders’ Association President P. Sundaram said that it was not the MRP which traders were concerned of but existing levies and Value Added Taxes. “The 15% tax which has been imposed on textiles and other commodities is a huge burden and with an MRP in place, it will become increasingly difficult for traders to sell at stipulated prices.”

He also added that his association would seek a meeting with the Minister of Finance next week so that they would formally request reviewing some of these taxes. He also warned that there could be an artificial shortage since traders tend to hoard buffer stocks until price is increased.

T. M. K. B. Tennakoon, Secretary to the Ministry of Trade and Commerce however said that if importers had any queries pertaining to taxes or levies, it should be taken up with the Finance Minister and not the Ministry of Trade and Commerce. “Our new price list is based on the list which was given to us by Customs. As such we know exactly at what price the importers are bringing down these essential commodities.”