Trade Minister warns suppliers: reduce prices or face price controls

• Bread prices can be reduced if bakery shortening and flour suppliers lower their prices- producers  
• Egg prices can be lowered if prices of inputs are lowered   

By Yohan Perera   

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.