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Demand for candles soars as power cuts become frequent

30 Jan 2022

  • Prices see significant increase
  • Manufacturers complain of raw material shortage
Demand for candles has risen over the past few weeks in Sri Lanka amidst electricity outages, with people purchasing more quantities than usual. However, the very limited supply of raw materials for candle manufacturing is further compounding the problem, The Sunday Morning Business learns. According to a local manufacturer, while the Maximum Retail Price (MRP) for a packet of 40 bucket candles is set at Rs. 240, a packet is now being sold at Rs. 280 to Rs. 400, especially over the last two weeks. “There is a demand for bucket candles these days due to the power cuts, which have increased the prices, supplemented by the increased cost of manufacture,” another manufacturer said. According to him, the margins between wholesale and retail prices are very low, indicating that the current prices are insufficient for manufacturers to cover costs and make profits. The main raw material required to manufacture candles – paraffin wax – is not manufactured in Sri Lanka, which mainly imports it from China, India, and Thailand. However, candle manufacturers stated that the import of paraffin wax had dropped over time due to the price hike and dollar shortage in the country. The import price of one kg of paraffin wax, which was between Rs. 240–280, has increased to between Rs. 640–700 in the last three months, which includes shipping costs. Two candle manufacturers The Sunday Morning Business spoke to said that there would be a candle shortage in the near future due to the increased demand and reduced supply. Paraffin wax prices have been on a constant uptrend throughout Q3 2021 in Asia, buoyed by the cost of upstream crude oil and firm demand from end-user industries.  Chinese paraffin wax prices have increased in the backdrop of a surge in demand from domestic as well as international markets. Supply has remained tight due to a combination of lower refinery run rates, an impending energy crisis, as well as supply chain bottlenecks caused by a congestion at Chinese ports owing to strict Covid-19 containment protocols.  In India, paraffin wax prices have witnessed an uptrend, with demand surpassing supply throughout Q3. Moreover, paraffin wax manufacturers looking forward to the expected hike in demand owing to the upcoming festive season have revised prices to ensure maximum benefits. Sri Lanka’s ongoing power crisis began in December 2021, when the Norochcholai Coal Power Plant broke down, resulting in a shortage of 300 MW to the national grid to be supplied via electricity generated through fuel. However, the foreign exchange crisis has also resulted in a short supply of fuel, with the Government struggling to pay dollars to its international suppliers. As a result, Sri Lanka has been facing four one-hour power cuts in different areas between 15-17 January. The cuts were expected to carry over into the past week, but were halted with the intervention of President Gotabaya Rajapaksa, who directed the Treasury to pay Rs. 92 billion owed by the Ceylon Electricity Board to the Ceylon Petroleum Corporation. Despite the order to not cut power, many areas in the Western and Eastern Province have experienced power cuts lasting 30 to 90 minutes in the last week. (IR)


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