Few powerful millers keep rice prices high mocking govt.’s incompetency

• CB admits “higher market power” by a few rice millers keep retail prices high despite bumper rice production in 2019 and 2020
• Sri Lankans now pay up to Rs.185 for a kilogram of ‘Keeri Samba,’ up from an average price of Rs.104.90 a kilogram a year ago

The stubbornly high rice prices notwithstanding maximum retail prices set by the government and the record paddy harvest reflect the higher market power exerted by a few rice millers, said the Central Bank. 

Mirror Business recently showed that end consumers are forced to pay between 15 percent to 30 percent higher for rice despite the record paddy harvest and rice production in both 2019 and 2020. 

The data compiled by the Central Bank showed that Sri Lanka has produced nearly 3.2 million metric tonnes of rice in 2019 and 2020 each, while the country’s annual household demand for rice stands at around 2.3 million metric tonnes.

The rice production in 2020 is estimated to be sufficient to meet household rice demand of the country for approximately 17 months, according to the Central Bank. 

“Paddy production in 2020 increased to an all-time high level, supported by favourable weather conditions and conducive policies of the government,” the Central Bank said. 

“Due to higher market power enjoyed by a few rice millers, retail rice prices remained higher than the maximum retail prices imposed by the government,” it added.

In both seasons together Sri Lanka produced a bumper harvest of 4.6 million metric tonnes of paddy in 2019. This was topped by 11.5 percent to 5.1 million metric tonnes of paddy in 2020. 

The production in the 2019/2020 Maha season, which accounted for around 62 percent of total annual production rose by 4.0 percent while the paddy output in the 2020 Yala season increased by 26.6 percent. 

Meanwhile, due to the increased production and import controls, rice imports declined by as much as 34.8 percent to 15,770 metric tonnes.

Despite the record paddy harvest and rice production, Sri Lankans pay up to Rs.185 for a kilogram of ‘Keeri Samba,’ up from an average price of Rs.104.90 a kilogram a year ago.