Trade Minister says 'No' to cement price hike

The Ministry of Trade and Consumer Services will take legal action against Prima Ceylon Ltd. for increasing prices of wheat flour without obtaining the approval of the Consumer Affairs Authority (CAA), said Minister of Trade, Marketing Development, Co-operative and Consumer Services, Bandula Gunawardana.

The Minister was addressing a year-end discussion at the Ministry on Thursday.

The Ministry of Trade and Consumer Services has come under severe criticism for delaying legal action against Prima Ceylon Ltd. and other traders who had increased prices of essential items without approval. "There are three Court cases against Prima Ceylon Ltd. for increasing the price of wheat flour on several occasions this year without consulting the CAA. The Ministry along with the CAA will institute a Court case against the company", the Minister said.

He said inflation is a major issue in the country and steps will be taken next year to curb inflation which hit 24 percent in October, the highest in the region.

This year the global economy suffered a major setback due to the staggering surge in fuel prices that affected the prices of all food items. The rise in prices of food is also due to the United States reckless ethanol subsidies.

Crude oil prices have been on a upward trend this year with a barrel increasing from US$ 57.32 in January to US$ 100 in November. As a result of wheat flour price rising above US$ 10 per bushel for the first time world food prices increased tremendously this year.

Sri Lanka's annual fuel bill which was US$ 830 million in 2003 this year had a bill exceeding US$ 2.5 billion but the country's annual earnings are US$ 6.8 billion.

Economic analysts have warned in the 'Straits' Times that high prices of basic commodities threaten to derail economic growth. Rising standards of living in many developing countries have led to higher consumption of meat and dairy products and industries, which depend on wheat.

The Minister said approval will not be granted to increase the price of cement next year.

The distribution network of Cooperatives, Sathosa and Laksthosas will be strengthened and more outlets will be set up with essential food items sold at a reduced price.

When asked what steps have been taken to control prices of small consumer items such as short-eats and rice packets, he said, there is no mechanism to control prices of certain food items.

- LF