Vegetables prices on downward trend

The continuing drought has disrupted food supply, causing a sharp increase in prices of all food items. Vegetable prices have increased, but the trend reversed last week with increased supply, market sources said. Prices of some vegetables dropped last week and traders in the Pettah Manning Market said that prices dropped with supplies increasing from Nuwara Eliya and Embilipitiya. There is a 30-50 percent reduction in vegetable prices this week compared to last week, they said.

The price change in some of the main vegetable items are as follows;Ladies fingers price reduced from Rs.80 to Rs.40/ kg, bitter gourd from Rs.110 to Rs.70, cucumber from Rs.40 to Rs.10, Lufa from Rs.80 to Rs.50, snake gourd from Rs.80 to Rs.40, beans and carrots from Rs.120-140 to Rs.100, leaks from Rs.140 to Rs.110, green chillies from Rs.260 to Rs.130. However, this price reduction is temporary as prices will go up and remain high in coming months because the supplies from the main agriculture areas including the North are very limited due to the drought.

The long drought in the Wet Zone ended with the activation of the South-Western monsoon rain last week but the drought continues in the Dry Zone which covers most agricultural areas. Wholesale rice traders said that rice prices too were increasing and according to market statistics there is a continuous increase in the wholesale price of rice. The drought has already affected the Yala season paddy cultivation and agriculture authorities said that losses have not been estimated yet. Paddy purchasing prices prevailed at around Rs.20/kg since the Maha season harvesting started in March, has now increased to Rs.30-35.

Large-scale mill owners have started to limit the supply expecting a price increase in the future and these factors led to rice prices increasing, traders said.

However the Ministry of Consumer Affairs said that sufficient stocks of paddy are available with state agencies to influence the market. Media Secretary to the Minister of Consumer Affairs said that there is a ceiling price for rice and therefore traders cannot increase price arbitrarily.

The Paddy Marketing Board has 200,000 tonne stock and another 50,000 tonne stock is available with District Secretaries.

The Government can release these stocks into the market if prices begin to increase, he said.

The annual rice consumption is 2.4 million tons and in 2010 the paddy harvest reached 4.3 million tons a record high. The 2011 Maha season was affected by floods and thus harvest dropped by 24 percent to 1.99 million tons. However the 2011 Yala season harvest increased compared to the 2010 Yala season by 12 percent to 1.87 million tons.The depreciating rupee has put pressure on all imported food items and all these factors will increase inflation further. In June, year on year inflation was 9.3 percent and in July inflation is expected to increase further, analysts said. Inflation remains at a single digit from February 2009. - GW