By P.K. Balachandran, IANS
Colombo : Indian exporters of essential foods to Sri Lanka may be hit hard if importers and distributors in the island carry out a threat to go on strike against the Sri Lankan government’s bid to enter the trade on unequal terms.
“India is one of the major suppliers of essential foods to Sri Lanka. Most of the onions, potatoes, sugar, chick peas and all the chillies come from India,” Hemaka Fernando of the Essential Food Commodities Importers and Traders Association said Wednesday.
“Per month, we import 7,000 tonnes of potatoes, 10,000 tonnes of onions, 15,000 tonnes of sugar, 1,000 tonnes of chick peas and an equal amount of chillies from there,” he told IANS.
Following the rise in the prices of essential foods – inflation now is an unprecedented 24 percent – the Sri Lankan government has been thinking of entering the import and distribution business by establishing a company and giving it tax concessions.
But private traders, who handle 95 percent of the import and distribution, are alarmed by this move and are planning an island wide shut down.
“If we bring the shutters down, the country will face dire consequences,” Fernando warned.
“If the trade is taken over by a state institution, it is the people of Sri Lanka who will suffer. In place of an experienced and well-organized group of traders with over 40 years of experience, there will be bureaucrats who will do the bidding of their political masters. There will be no scrutiny of their actions,” he said.
The government claims the private importers and distributors are responsible for the rise in the prices of essential foods. It says they are not passing tax concessions and reductions in the price of imports on to the consumers. But Fernando refuted this allegation.
“For example, the price of sugar in the international market is $285 per tonne. On Dec 25 last year, the government removed the customs duty concessions on essential foods, which triggered a rise in the retail prices,” he said.