Price controls will discourage imports, says trade

Saturday, 4 September 2021 00:29 - - {{hitsCtrl.values.hits}}

With the rupee having already lost 7.5% against the dollar so far this year, importers are worried price controls will further discourage imports, according to a Reuters report.

“Commodity prices are increasing in global markets, so long-term domestic price controls are unfeasible. Currently, banks are giving dollars for essential food items but unless the Government steps in to manage the rupee, it will be difficult to keep prices stable,” Essential Commodities Importers’ Association Chairman G. Rajendran told Reuters.

Rajendran estimated that Sri Lanka needs about $ 100 million for essential food imports each month for items such as lentils, sugar, onions, potatoes, spices and cooking oil.

Shop owners, too, are worried more stringent measures will impact them unfairly.

“We sell at the prices the wholesalers give us. Small shop owners also have to make a living and our margins are being squeezed so much we have almost nothing,” a grocery shop owner W.A. Jayasekera was quoted as saying.

Sri Lanka imports a large part of its food supplies and the shortages have in part been triggered by an imports ban due to the country’s dwindling foreign exchange reserves and a sharp depreciation in the rupee.

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