Hidden goods mafia spells doom in distorted economy

People will have no food by mid-May and signs of a severe food scarcity are foreshadowed
(PIC: AFP)

The problem however is the lack of essential food items despite price hikes

The concession package given during new year through Sathosa didn’t contain food items people needed

Large scale traders do not bring dollars to the country

Funds granted by the IMF cannot be used for food items and is given only as a bank guarantee

If not for the protests by people they would have carried out this racket

With the revoking of price regulation gazettes the CAA can no longer intervene and protect consumers

Black market traders favouring the Government have created this situation

At present Sri Lanka is expecting a severe food shortage. The authorities are yet to find solutions to the upcoming food shortage and cite the dollar crisis as the reason behind not being able to find a solution to the issue. Very soon there will be no food items in the market for people to buy. Even now there are some essential food items which are not found in the market because of the lack of dollars which   is needed to release the imported food stocks stored in vessels stuck at the port. People are force to live amidst these problems. Our sister newspaper Sunday Lankadeepa reported on this crisis in its January 16th issue.

Small businesses are unable to import food. However some businesses and racketeers importing food in large scale were given dollars to import essential food items. Some of them are only focused on their commission even amidst  the crisis,”

Thushan Gunawardene Former Executive Director CAA

There is a scarcity of certain essential food items already such as garlic, onions, mung beans, cowpea, chickpeas, dhal, coconut oil, milk powder, dried fish, fish, meat varieties, corn, wheat flour and rice. Even if they are imported, given the prevailing dollar crisis, their prices keep increasing daily. A kilo of mung beans is 1000 rupees whereas rice costs more than 200 rupees a kilo. Coconut oil costs around 800-1000 rupees and a kilo of dhal has increased to 600 rupees. A kilo of imported milk powder costs around 2000 rupees. With the recent price hike of wheat flour, a loaf of bread costs 150 rupees. The problem however is the lack of essential food items despite price hikes. 

Traders and importers increase prices of food items daily claiming that the rupee has depreciated against the dollar. The Consumer Affairs Authority (CAA) and the responsible state authorities turn a blind eye to these matters. There is a scarcity of food items in shops around the country. People are queuing up in search of food. The concession package of essential food items given for the new year through Sathosa did not contain the food items people needed. Against this backdrop a severe scarcity of essential food items will be felt heavily by May. 

CAA Former Executive Director Thushan Gunawardene said that there is a scarcity of essential food items even in the world market. “However the problem in our country is the lack of foreign reserves to buy food. Banks refraining to issue dollars to import ordered essential food items created this problem. Therefore small businesses are unable to import food. However some businesses and racketeers importing food in large scale were given dollars to import essential food items. Some of them are only focused on their commission even amidst the crisis,” he added.

Asela Sampath National Organizer of the All-Island Restaurant Owners’ Association

Checking the storehouses of essential item importers should be prioritised now. That will put an end to the black-market mafia. The same stock of dhal we bought at 350 rupees a kilo is sold at 500-600 rupees a kilo two days later. How is this possible?”

Large scale traders do not bring dollars to the country. Instead they keep their dollars in institutions in countries such as Singapore and make payments through these institutions to import; thereby creating a monopoly in essential food items. A huge scarcity of commodities is unavoidable in the future. According to Thushan Gunawardene there would be a food scarcity in May. “The funds granted by the International Monetary Fund (IMF) cannot be used for food items. They are given as a bank guarantee. We should find money to import food. The present Government has no plan yet. Many people predicted the present situation, but the Government acted in favour of a few racketeers,” Gunawardene added.

Printing money instead of finding solutions 
Instead of finding solutions, people on Ajith Nivard Cabraal’s side focused on printing money. If not for the protests by people they would have carried out this racket. If so the results would have been even worse. However we may witness its results by May. Most of the food manufacturing factories have not opened since the new year because of lack of raw materials. If these companies shut down many people would lose jobs; thus creating more problems. State officials and authorities not paying attention to this danger is unacceptable. They are engaged in a huge crime and should be punished under the criminal law,” Gunawardene said.

At present the CAA is doing nothing to protect the consumers. It merely collected data because of several influences. Now the CAA can only interfere when vendors try to sell goods in an improper manner or hide them. With the revoking of price regulation gazettes the CAA can no longer intervene and protect consumers. If prices are to be regulated at present then goods will no longer be available. Now we have a distorted economy. Therefore many people suffer with money in their hands. There are no food items in shops at present. The middle class people living in cities will have no food. The rural population can at least survive on jack fruit. Affluent people will import the food they wish to consume. “Therefore the coming month is decisive. People will have no food by mid-May and signs of a severe food scarcity are foreshadowed. People have taken to the streets in protest because there is no food to feed their families. The authorities have failed to understand their needs. Most of the speeches that ministers make are juvenile. People can no longer put up with the current economic crisis. The future of the country is unprecedented,” said Gunawardene. 

Without the expected paddy and vegetable harvest of the Yala season a food scarcity is unavoidable. 
By September and October the price of rice will have increased to 400 rupees a kilo,”

K. B. Gunaratne Former Director of Agriculture

Yala season and food scarcity
National Organizer of the All-Island Restaurant Owners’ Association Asela Sampath said that a few racketeers had imported and stored essential food items for two years. “Those food items will be found if their storehouses are raided. This situation arose as the former Finance Minister Basil Rajapaksa removed taxes of many essential items. He allowed fellow businessmen to import as much as goods they wanted. 

“Then restrictions were imposed on imports. Food items imported under the tax reliefs are in their storehouses. We purchase dhal, rice, curry powder, chili flakes and chili powder imported under the tax reliefs at 600 rupees, 200 rupees and 1400 rupees respectively. No responsible party has any statistical document carrying the details about the required food items to the country and how much is required for six months and one year. That marks the first step of this racket. Checking the storehouses of essential item importers should be prioritised now. That will put an end to the black-market mafia. The same stock of dhal we bought at 350 rupees a kilo is sold at 500-600 rupees a kilo two days later. How is this possible? There is a black-market mafia going on. That was how the sugar scam and the garlic scam were carried out. This is a huge mafia. Black market traders favouring the Government have created this situation. Innocent people have become helpless. The price of fuel, wheat flour, fish, meat, and eggs has increased rapidly. We are forced to increase prices of food items. The price of a packet of rice and fried rice was increased by 20%. The price of Kottu, hoppers and other bakery items has increased. This situation cannot continue. By next month people will have nothing to eat. To put an end to this situation the black-market mafia should be addressed. The storehouses of black-market traders are full of essential items which will guarantee no scarcity. If they can be raided many items will be discovered,” he added.
 

By next month people will have nothing to eat. People will be forced to break into retail stores to get goods. How much was spent in dollars on importing organic and nano fertilizer and rice after destroying our agriculture? No one investigates these matters”

Bandula Jayamanna Chairman All-Island Food Items Retail and Wholesale Suppliers Association

Former Director of Agriculture K. B. Gunaratne said that there is no proper procedure yet planned to import chemical or organic fertilizer for the upcoming Yala season. “Without the expected paddy and vegetable harvest of the Yala season a food scarcity is unavoidable. By September and October the price of rice will have increased to 400 rupees a kilo,” Gunaratne added.  

All-Island Food Items Retail and Wholesale Suppliers Association Chairman Bandula Jayamanna said that the dollar which was at 180 rupees is now sold for 404 rupees in the black market. “Importing items with dollars obtained from the black market at a higher price results in the increase in cost of items. There is no black-market and profits in trade. Small traders do not earn profits despite the price hike of milk powder. There are traders with stocks purchased at lesser prices. They are engaged in a trade. They purchase items at a less price and sell while keeping a profit. This situation resulted because of the appreciation of the dollar. The price of dhal will increase to 600 rupees. The price of milk powder will increase again. By next month people will have nothing to eat. People will be forced to break into retail stores to get goods. How much was spent in dollars on importing organic and nano fertilizer and rice after destroying our agriculture? No one investigates these matters. These activities were done for a commission. If fertilizer was given to farmers then earning commissions would be unthinkable. By next month people will starve and fight each other,” he added.

Trade Ministry assures no shortage of food

A spokesperson for the Trade Ministry said that food items would be imported as dollars are being received and the food requirement of the country is being prioritised. “There will be no shortage at all. There will be delays when importing food items for a few days, but steps will be taken to immediately provide people with essential food items,” the spokesperson added.