• Trade Ministry turns to importing rice to address high rice prices
• Agri Ministry urges CAA to act against rice hoarding mill owners
• Keeri samba grown in few areas, stocks hoarded: Amaraweera
• Farmer unions blame Govt. for inaction in preventing shortages

As the Trade Ministry gears up to address the ongoing spike in rice prices through imports, the Agriculture Ministry last week urged the Consumer Affairs Authority (CAA) to take swift action against large-scale mill owners accused of hoarding substantial rice quantities to artificially inflate prices.

Agriculture Minister Mahinda Amaraweera last week stated that Sri Lanka currently possessed ample rice stocks, as indicated by the assessment of recent paddy harvests.

However, he noted that these stocks appeared to be concentrated among several large-scale mill owners, influencing market prices. Therefore, the Minister recommended that the CAA promptly intervene by compelling mill owners to release their stockpiled rice, thereby enabling consumers to benefit from lower prices, particularly during the festive season.

As per the Central Bank’s daily price report issued on Tuesday (5), rice prices in the local market displayed varying rates for different varieties. Samba was priced at Rs. 230 per kilogramme, nadu at Rs. 210 per kilogramme, kekulu (white) at Rs. 204 per kilogramme, and kekulu (red) at Rs. 185 per kilogramme. Prices for imported varieties of ponni samba, nadu, and kekulu (white) were not available.

When compared with the prices during the same period last year, samba, a widely-consumed variety, saw an increase from Rs. 218/kg in 2022 to Rs. 230/kg in 2023, reflecting a rise in demand or changes in market conditions. 

Similarly, nadu experienced an upward trend, with prices climbing from Rs. 207/kg in 2022 to Rs. 210/kg in 2023. Kekulu (white) followed suit, witnessing an increase from Rs. 193/kg to Rs. 204/kg, according to the Central Bank statistics.

Rice consumption stats

As per the ‘Grain and Feed Annual 2023’ report issued by the Foreign Agricultural Service Colombo, the forecast for Sri Lanka’s Market Year (MY) 2023/2024 (October-September) rice production (milled) is 3.16 million metric tonnes (MMT) from a planted area of one million hectares, with yields of 4.26 metric tonnes (MT)/hectare (rough rice). 

Sri Lanka’s 2023/2024 rice imports are forecast at 25,000 MT, a drop of 125,000 MT from the MY 2022/2023 estimate.

The Household Income and Expenditure Survey (HIES) 2019 puts the national average monthly household consumption of rice at 30.7 kg, with consumer behaviour differing between urban, rural, and estate plantation sectors. 

The estate plantation sector leads in rice consumption, with a household’s monthly consumption at 35.9 kg. Rural household rice consumption is lower at 31.8 kg monthly, but it is lowest in urban areas where households have trimmed back monthly rice intake to 24.1 kg. 

Nadu (white) is the highest consumed rice variety, followed by kekulu (red), kekulu (white), and samba. Consumer preferences for rice varieties vary by sector. Both the estate plantation and rural sectors are large consumers of nadu (white), while the urban sector favours samba.

High retail prices of rice led the Government to set Maximum Retail Prices (MRPs) through the CAA in mid-2022, which are still effective. Notwithstanding regulations, private traders do not always conform to the MRPs. Despite Government efforts to control prices and keep rice affordable for the public, market prices in MY 2021/2022 exceeded MRPs. 

However, in MY 2022/2023, current market prices of rice do not exceed the MRP due to an excess supply of rice with imported rice.

Keeri samba

While the prices of all rice varieties have gone up drastically, keeri samba, a widely-used rice variety in Sri Lanka, has been in short supply for the past several months, as observed by The Sunday Morning. Although the rice variety is available in some areas, prices are excessively high. In some areas, a kilo of keeri samba is sold at Rs. 360 or more.

When contacted by The Sunday Morning, Trade Minister Nalin Fernando said that the Government was taking measures to import keeri samba in order to address the shortage.

However, Agriculture Minister Amaraweera, pointing out that keeri samba was a native rice variety only available in Sri Lanka, said: “We can’t import keeri samba; we import ponni samba.”

Amaraweera explained that keeri samba was a unique rice variety sown in limited areas, and that therefore, almost all rice stocks were hoarded by mill owners. Since the demand for keeri samba becomes excessively high during the festive season, mill owners hoard stocks and distribute rice accordingly while maintaining high prices. 

“This is why we have the CAA; they should look into these issues and take necessary steps,” he added.

Unions criticise inaction 

In such a backdrop, farmer unions have criticised the Government for its inaction in mitigating the periodic shortages by maintaining a steady supply to the market.

“The Government says there is no rice shortage, but at the same time it says it will import rice to meet the demand. If there is no shortage in the local market, why should the Government import rice? This is a simple question,” All Ceylon Farmers’ Federation (ACFF) Convener Namal Karunaratne said.

He stressed that there was a rice monopoly in the country which had to be dismantled by the Government. “We have sufficient rice stocks in the country, but since the stocks are not available with the Government, the market prices and release of stocks are decided by private mill owners. This is what a market monopoly is. We have been highlighting this issue all along, but nothing has been done yet,” he said.

In addition, Karunaratne stressed that the production cost of rice had increased drastically, mainly due to high fertiliser and fuel prices. “This affects the prices, but at present, although the market price is high, the benefit doesn’t get passed to the public,” he added.

Responding to the concerns raised by farmers, Trade Minister Fernando assured a steady supply to local markets during the season.

No shortage: Mill owners

When contacted by The Sunday Morning, Small and Medium-Scale Rice Mill Owners’ Association President B.K. Ranjith stressed that there was no shortage of rice, and that the current stocks were sufficient for the next six months.

Acknowledging the statements made by the Trade and Agriculture Ministers, he said: “Both Ministers are right. The Trade Minister says we should import, and yes, we should. We urged the Government to commence importing several months ago because we predicted this situation. This is not new. We have been experiencing this for the past 25-30 years. 

“At the same time, what the Agriculture Minister says is also true. We have sufficient rice stocks in the country. The issue is that the stocks are not being released to the market properly. The rice stocks are in the possession of large-scale mill owners and middlemen.”

He explained that the fear of an upcoming drought, created at the beginning of this year, had caused many people to gather rice stocks, with stocks being hoarded by both large-scale mill owners and middlemen. “These people are controlling the market by releasing the amounts they want in order to maintain the market price. This is the issue that the Government should address,” he stressed.

Highlighting the shortage of keeri samba, Ranjith said: “There is no shortage of keeri samba in the country. The only issue is the MRP. Those who own the stocks don’t want to release stocks at the MRP. As a result, the supermarkets and other sellers are not purchasing keeri samba, which is why the rice is not available in the market. But in the places where the rice is available, it is sold at around Rs. 360 per kilo.”

Skyrocketing veg prices

The prices of almost all upcountry vegetables have increased, especially following the recent heavy rains.

Speaking on behalf of vegetable farmers, All Ceylon Farmers’ Federation (ACFF) Convener Namal Karunaratne stressed that although vegetables were currently being sold at high prices, farmers were not benefiting. 

“Recently, I visited a farmer who grows Thai eggplant in Medawachchiya. Seeing that the farmer had stopped harvesting the vegetables, leaving them on the trees, I questioned his reasons for doing so, whereupon he said that he was unable to sell the harvest. However, when I inquired about the price of Thai eggplant in Colombo on that day, it was Rs. 400 per kilo.

“This is the issue Sri Lanka is facing; we don’t have a proper mechanism to fill this gap between demand and supply. The middlemen always get the benefit while both the consumer and the farmer suffer,” Karunaratne pointed out.

Furthermore, he explained that vegetable growers were facing high production costs as well as a shortage of fertiliser. “Fertiliser is available in the local market, but at exorbitant prices which poor farmers cannot afford,” he said.

As per the Central Bank daily price report on the latest market prices, beans are priced at Rs. 600/kg, while carrots are available at Rs. 300/kg. Cabbage is listed at Rs. 400/kg, and tomatoes are priced at Rs. 600/kg. 

Brinjals are available at Rs. 350/kg, pumpkins at Rs. 120/kg, and snake gourds at Rs. 250/kg. Green chilies command a higher price at Rs. 800/kg, while limes are listed at Rs. 600/kg.

Responding to vegetable price hikes, Agriculture Minister Mahinda Amaraweera said that the prices had increased due to cultivations being affected by heavy rains. 

Meanwhile, noting that his ministry had no options to address the vegetable price hikes, Trade Minister Nalin Fernando stressed that the concerns of vegetable farmers should be managed by the Agriculture Ministry. Additionally, the Trade Minister shared that he was unaware of any fertiliser shortage faced by vegetable farmers.