Cabinet nod to import 70,000 tons of rice to address artificial shortage

Trade, Commerce, Food Security and Cooperative Development Minister Wasantha Samarasinghe 

• Trade, Commerce, Food Security and Cooperative Development Minister Wasantha Samarasinghe says rice stock will arrive by 15 Dec. to be sold at Rs. 220 per kilo
• States Sathosa and STC will handle importation via multiple importers
• Accuses mill owners of hoarding rice to create artificial scarcity and inflate prices despite a surplus from 2023/24 paddy production
• Says new data system is being developed to improve accuracy, prevent market manipulation, addressing mismatches in current 20 data sets
• Assures decisive policy reforms to protect farmers and consumers aiming for long-term stability in marketplace

The Cabinet of Ministers at its inaugural meeting on Tuesday has approved importation of 70,000 tons of Nadu rice as a short-term measure to counter the current shortage in the market.

Speaking to the media, Trade, Commerce, Food Security and Cooperative Development Minister Wasantha Samarasinghe stated that the imported rice sourced through competitive bidding will be sold at a controlled price of Rs. 220 per kilo to ensure affordability during the festive season.

“The rice, primarily of the ‘Swarna Nadu’ variety will arrive by 15 December with stringent quality checks to maintain sample standards and without any reduction in the existing import tax,” he said.

The Minister noted that the importation process will be made through the two State-run enterprises – Cooperative Wholesale Establishment (CWE), also known as Sathosa and Sri Lanka State Trading (General) Corporation.

He said the importation process will involve multiple firms with over 30 importers expressing interest, to prevent undue profits being concentrated among a single entity.

Samarasinghe criticised the mill owners for artificially creating the shortage, a practice he described as an annual manoeuvre to inflate prices and exploit consumers.

“Despite Sri Lanka producing 4.8 million tons of paddy in the 2023/24 Yala and Maha cultivation seasons – 65% of which was in Nadu, farmers and consumers alike are struggling to access rice at the certified price of Rs. 220 per kilo. We learnt that in some places Nadu kilos are being sold at Rs. 250,” he claimed.

The Minister disclosed that of the total paddy production of 4.8 million tons, 3.1 million was Nadu and of that 2.1 million tons of rice can be processed, comfortably surpassing the monthly Nadu rice consumption of 140 tons, with the overall rice demand of 200 tons. “This shows that despite having an excess production, intermediaries and mill owners have hoarded stocks creating an artificial scarcity,” he pointed out.

The Minister pledged to end the recurring cycle of intermediaries and mill owners profiting at the expense of both farmers and consumers.

Samarasinghe also announced a broader push for policy-driven stability in the agriculture and trade sectors, with a pledge to introduce permanent solutions by the next harvesting season. 

He said a new data system is being developed jointly by the Trade and Agriculture Ministries to address discrepancies in data and information. “The current system has 20 data sets and these data sets are not matching with the reality in the marketplace, thus exacerbating the market manipulation,” Samarasinghe explained.

He also noted that mill owners are being registered countrywide under a revamped system incorporating a point mechanism. “The Consumer Affairs Authority (CAA) will use this system to monitor stock releases every 15 days. Mill owners who fail to release adequate supplies will receive negative points, which could trigger stricter enforcement measures,” he added.

Noting that successive Governments have provided mill owners with concessional loans to expand their facilities and businesses, he claimed that many fail to meet their obligations to support the market.

He charged that this cycle of non-compliance combined with inadequate regulatory oversight has perpetuated the current crisis.

“The Government will no longer micromanage these issues, but will implement decisive policy measures to protect consumers and farmers,” the Minister assured. (CdeS)