Thursday Nov 14, 2024
Thursday Nov 14, 2024
Tuesday, 15 June 2021 01:40 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
The Lanka Confectionery Manufacturers Association (LCMA) yesterday confirmed that a price hike ranging from 3-15% on 90% of its products will come into effect from next week.
“With great reluctance we have decided to increase the prices across the board,” LCMA President S.M.D. Suriyakumar told the Daily FT.
Last week the Daily FT story titled ‘Confectionery, bakery prices set to go up’ highlighted both confectionery and bakery stakeholders’ views that a price hike was inevitable, citing the survival of all employed and engaged.
Suriyakumar said yesterday that the products with increased prices will come into the market from next week.
“There will be no change in the prices of the products that are already on shop shelves. The products with new prices will come into effect from 20 June onwards, not immediately,” he clarified.
As per the National Consumer Price Index (NCPI), the rate of inflation was 5.5% in April as against 5.1% in March. Year-on-year inflation of the food group rose from 8.8% in March to 9.7% in April.
The industry had been lamenting for months over the thin margins brought about by the rising cost of commodities, logistics, packaging, foreign exchange and levies.
“We have been analysing the situation for months and it was impossible to continue further with no profitability. At the rate that prices have risen in the past two months, including the fuel hike over the weekend, extended travel restrictions and unexpected heavy medical and COVID-19 precautionary costs, the industry was too exhausted to absorb any further costs without increasing prices,” Suriyakumar explained.
The LCMA President said the price hike will vary from small to large quantities among almost all confectionery products, with only very few items maintaining previous price levels.
“We have done a very fair price increase compared to most of the other commodities.” Suriyakumar however denied specifying the product or price increase in each category.
The confectionery industry is worth Rs. 150 billion and comprises the formal local manufacturing industry worth Rs. 85 billion, with SMEs chipping in a further Rs. 10-15 billion. Separately, Sri Lanka exports $ 150-200 million (between Rs. 30-40 billion). There are around 1.5 million people engaged in the baking industry, with 500,000 directly employed and another one million engaged indirectly.
