Sri Lanka suffers consequences due to flour dumping export strategies

In November 2022, in order to increase foreign exchange earnings, the Government of Turkey provided subsidies for their exporters. Taking advantage of this situation Turkish wheat flour producers have been dumping flour into many countries including Sri Lanka at extremely low prices hurting the local producers. The dumping has been going on for the past one and a half years. 

The issue was further exacerbated when the Consumer Affairs Authority (CAA) carried out an extensive raid on 4 August. The operation, believed to be the largest conducted by the Authority to date, uncovered wheat flour among other food items unfit for human consumption. Among these items, there were stocks of infested flour suspected to be of Turkish origin.

It is a sad situation if Sri Lankan consumers are fed with low-quality and rejected flour from Africa. We urge the authorities to look into this immediately.

Sri Lanka has become the latest country to raise concerns over alleged Turkish flour dumping, joining the ranks of nations that have reported adverse effects on their domestic flour industries. Recently US Wheat Associates raised alarm bells over the dumping of cheap Turkish flour around the world to the tune of $ 100 to 500 per year.

Sri Lanka’s flour market has long been a crucial component of its economy, with local suppliers always able to meet the demands of a growing population without the need for exports. The country’s flour industry, which provides livelihoods for many and contributes significantly to the national economy, is now grappling with the implications of unfair trade practices.

Based on Sri Lanka Customs statistics, since January 2022, over 190,000 MT of Turkish flour has entered Sri Lanka’s market, raising concerns among local suppliers and authorities. The influx has resulted in an outflow of approximately $ 100 million from the cash-strapped nation, a particularly alarming situation as the country grapples with the worst economic crisis in its history.

Additionally, allegations of dumping have sparked debates over the potential impacts on Sri Lanka’s flour industry. These concerns span a wide range, from the losses faced by importers and exporters striving to remain competitive to the reduced production that could lead to job losses and decreased investment. Moreover, it is worth noting that these practices do not benefit anyone, including consumers.

Recognising the implications, the Government has taken steps by introducing a mechanism that makes it mandatory to obtain licenses for importing wheat flour. The measure was implemented with the aim of controlling the rise in the price of wheat flour in the market and preventing the influx of lower-priced sub-standard products.

The situation also underscores the critical importance of ensuring that imported food products meet the highest standards of quality, safety, and ethical practices.

In conclusion, the recent incident serves as a reminder of the pivotal role that local producers play in ensuring nation’s food security. As a nation, it is important to collectively prioritise the wellbeing of citizens as well as the local producers who play a major role in ensuring food security and the wellbeing of the nation. It is only through these shared efforts that local producers continue to provide communities with food security, safe and nutritious food options, ultimately contributing to a healthier and happier society.