:

• Sathosa, STC yet to secure shipments; STC’s first shipment of 5,200 MT due tomorrow
• Imported rice cannot be sold at gazetted MRP, pricing issue demotivating: Ranjith

No upper limit has been set for private rice importers, as the Government anticipates a scarcity of rice due to damage caused to the Maha harvest by the recent floods experienced in rice-growing areas across the country, according to the State Trading Corporation (STC).

Speaking to The Sunday Morning, STC Chairman Ravindra Fernando stated that the limit of 70,000 MT applied only to the STC and Sathosa, while private importers would be allowed to import as much as they could until the new deadline, now set for 10 January 2025.

On Friday (20), the Essential Food Commodities Importers’ and Traders’ Association (EFCITA) claimed that importers had only been able to bring down around 25,000-30,000 MT of rice by the previous deadline of 20 December. 

However, according to Sri Lanka Customs, 67,000 MT of rice had been cleared as of midnight on Friday. 

Customs Spokesman Seevali Arukgoda stated that Customs had received a total of 67,000 MT of rice, including 28,500 MT of white kekulu and 38,500 MT of nadu, by the Government’s deadline of midnight on Friday.

“Customs generated Rs. 4.3 billion in revenue from taxes, with the tax rate set at Rs. 65 per kilo. Although the Government has extended the deadline until 10 January 2025, Customs can only clear rice stocks after a gazette is published. Until then, no rice will be released from Customs,” Arukgoda explained.

Speaking to The Sunday Morning, EFCITA President G.S. Illamanathan said that during the period from 4 December to 20 December, when the Government lifted the ban on rice imports, all imports as of Friday (20) had been carried out by private importers. As confirmed by Sri Lanka Customs, all rice shipments that cleared Customs by Friday had arrived from India.

A month ago, Minister of Trade, Commerce, Food Security, and Cooperative Development Wasantha Samarasinghe announced that Sri Lanka would import 70,000 MT of nadu. The decision was part of the Government’s efforts to address the rice supply gap and ensure affordable access for consumers.

Minister Samarasinghe explained that Sri Lanka’s annual paddy production averaged 4.8 million MT, with 3.1 million MT being nadu paddy, which is processed into rice. This results in around 2.1 million MT of rice, while monthly consumption averages 140,000 MT. 

Despite a monthly surplus of 1.04 million MT, rice availability remains a challenge due to price controls and difficulties faced by farmers in selling their paddy. Some surplus rice is used for industrial production, but much of it remains unaccounted for, causing shortages and pressure on rice prices ahead of the January Maha harvest.

When contacted, a Trade Ministry official clarified that the quantity of rice imports would be decided in line with the deadline and until that period, there was no limit on the quantity of rice that could be imported. The ministry expects an additional 70,000 MT or so by 10 January 2025.

Facilitating imports 

To mitigate the crisis, the Government has decided to facilitate rice imports through two State-run organisations: Sathosa and the STC. Both entities will work within a ceiling of 70,000 MT, with imports set to begin before 15 December.

However, as The Sunday Morning has reliably learnt, the STC is yet to import rice and the first stock of 5,200 MT of nadu is expected to arrive tomorrow (23).

STC Chairman Fernando said that the corporation had floated three additional tenders: one for the import of 5,200 MT of nadu and two others for the import of 20,800 MT of nadu each. The 5,200 MT tender floated on 16 December has now closed and evaluations have been completed, but the evaluations for the other two tenders have yet to commence.

Meanwhile, all imports were initially supposed to be done through the STC, with local purchases handled by Sathosa. However, the Government later permitted private importers to import rice stocks as well. 

Rice pricing

The imported rice was intended to be sold at a fixed price of Rs. 220 per kilo to ensure that the cost remained affordable for consumers, with the possibility of the price being set lower depending on market conditions.

According to Illamanathan, the wholesale market prices are as follows: white raw rice at Rs. 210-212, nadu at Rs. 220, and ponni samba at Rs. 225.

Speaking to The Sunday Morning, Small- and Medium-Scale Rice Mill Owners’ Association President B.K. Ranjith stressed that imported rice could not be sold at the gazetted Maximum Retail Price (MRP), as the wholesale price of the imported rice was nearly Rs. 218. 

“How are we supposed to sell the rice we purchase at Rs. 218 from Pettah to retailers at Rs. 220?” he questioned.

“The pricing issue has demotivated large-scale buyers. As a result, the imported rice is yet to reach retail markets outside of Colombo,” he stressed.

Furthermore, as reliably learnt by The Sunday Morning, Sri Lanka Customs faces a significant issue due to the compulsory lab testing of rice, as each test takes a considerable amount of time. This has caused congestion, as nearly all imported rice stocks must undergo lab testing before clearing Customs.

However, Illamanathan said they did not face any issues, as they imported rice from reliable and registered exporters in India. “I think those who imported from different sellers had to face that issue. We only submitted the certificate issued by the exporters,” he said.

Strong Indian rice inventories

Meanwhile, as reported by Indian media, India’s rice inventories reached a record high of 44.1 million MT on 1 December, far exceeding the Government's target of 7.6 million MT. This surplus, including unmilled paddy, positions India to potentially increase rice exports without affecting domestic supply. The country’s wheat stocks also surpassed expectations, totalling 22.3 million MT, against a target of 13.8 million MT.

Following a strong harvest, India has removed export curbs on most rice grades, except broken rice. The bumper crop of 120 million MT this year, largely due to favourable monsoon rains, is expected to further boost rice supplies. 

The Food Corporation of India is set to purchase 48.5 million MT of new summer rice, up from 46.3 million MT in 2023-’24. However, storage concerns are rising as stocks continue to grow.

Meanwhile, India’s wheat prices have surged to record highs due to strong demand and limited supplies.