Essential food importers, traders also want moratorium, financial support

Essential food importers and traders have become the latest to seek financial support from the Government partly due to the impact of the Easter Sunday terror attacks as well as recent sharp devaluation. 

The Essential Food and Commodities Importers and Traders Association (EFCITA) which styles itself as the sole provider of the food security requirement of Sri Lanka, has made this appeal in a letter to Prime Minister Ranil Wickremesinghe. 

It is asking for a rescheduling of the existing loans, moratorium on capital and interest on all existing debt for one year and concessionary terms on working capital to meet imports and distribution costs.

“Currently we as importers and traders are experiencing an unprecedented situation where our existing debt has risen due to the recent security situation in the country,” it said. 

“Any further tolerance of the burden in which we are currently placed may not be possible, as on one hand our obligation by the State to meet the essential food demand in the country is affected whilst our own exposure to the issues confronting us financially threatens our own existence,” the Association added.

In the letter the EFCITA argued that their business entirely lies and depends on both the import and distribution of items representing the Cost of Living Index measurement and the cost of living ‘Food Basket’ – Rice, Sugar, Dhal, Onions, Potatoes, Pulses, Garlic, Coriander, Milk Powder, Chilies, Canned Fish and Dry Fish.

“At times we have been dictated by the Government to maintain prices much below cost. At other times, we were also requested to hold Buffer Stocks of some of the Commodities such as Rice to prevent adverse market fluctuations. Most times we suffered the consequential effects in silence,” the Association complained.  

“Our financial condition has worsened severely due to the decisions on price formula and parity rate fluctuations on the forex Rates. During the last three years the forex movement in the country had an unprecedented increase from a mere Rs. 130 to a dollar ending up over Rs. 182 to a dollar. Our debts swelled as import values got further enhanced in the rupee conversion against the progressive rise in the Parity Rate between the dollar and that of the Sri Lankan rupee,” they pointed out.  

Noting that their responsibility lies in maintaining adequate stocks irrespective of certain consequential disadvantages, if not for its members, the State will have to bear the responsibility and the commitment to meet the total food bill borne by the trade exceeding $ 1.2 billion per annum. 

In the letter to the Prime Minister the Association which employs over 100,000 also highlighted the other contribution to the economy by way of investments and finances to support the import costs and on the infrastructure including Warehousing, Transportation, Storage, Sorting and Security. 

It said all its imports are subject to duties. For some items such as Sugar they pay the Government Customs Duty which is over 50% of the Import Bill. In addition, the members also service all Import Levies and Taxes. “Annually we pay over $ 600 million as Customs Duties,” it added.

“Since we are currently burden with our servicing capabilities with our Banks, we seek the Government’s immediate intervention to bring about feasible solutions to retain our role as performed traditionally in the past. The current environment has compelled us to accelerate to seek assistance to prevent any further deterioration of the current conditions,” the Association emphasised in their appeal to the Prime Minister.