Trade Minister warns suppliers; lower prices or face price controls

Colombo, July 20 (Daily Mirror) - Whilst the government issued a stern warning to suppliers of essential goods emphasising that they must promptly pass on the cost reductions resulting from its recent policy decisions by next week, some producers said it is not possible to reduce prices due to the high cost of raw materials.

Minister of Trade Nalin Fernando said the failure of suppliers to comply by next week could compel the government to enforce controlled prices on essential goods.

"We don't like to adopt a policy of controlled prices, but we will be compelled to do it. I have called all trade associations for a meeting next week and I will be passing this message to them loud and clear," the minister told a press briefing.

"The Economic policies adopted by the government has resulted in a reduction of power tariff and transportation cost. Therefore, it is the duty of the traders to pass these benefits to the consumers," he added.

He said government policies have brought food inflation down to a single digit." The interest rates will also come down further,” he said.

Meanwhile, All Ceylon Bakers Association President N. K. Jayawardene said they are willing to reduce the price of bread if the suppliers of bakery shortening and flour reduce their prices. “We want the government to be firm with the flour and bakery shortening suppliers and to get them to reduce their prices. The government seemed to be scared of these suppliers. We are selling a loaf of bread at Rs 140. We are ready to bring down our prices depending on the suppliers of our raw materials,” he said. All Ceylon Egg Producers' President Sarath Ratnayake also came up with a similar remark. “Reduction of power tariff and transportation cost will not have a major impact on egg prices. The issue the egg producers face is the high cost of animal feed. The price of maize costs Rs 190 per Kg compared to Rs 130 a few weeks ago. The cost of a female chick is Rs 800. The total cost of maintaining 1,000 hens comes to around Rs 2.8 million. We have to sell an egg at a price which is nearly Rs 60 because of the high costs. “These costs have to come down for us to reduce the price of an egg,” Ratnayake said.