President Mahinda Rajapaksa s government, struggling to stabilize volatile rice prices, has finalized an agreement with the Burmese military rulers to import 50,000 m.t. of rice to meet the growing shortfall in the local market.
But the stocks will not arrive in Colombo until end of this month due to the difficulty in finding sea transport.
The failure to arrange earlier shipping would cause further price escalation, an authoritative official told The Sunday Island, asserting if the pact with Burma failed to materialize Sri Lanka would have been in dire straits.
Trade Secretary Dr. R. M. K. Ratnayaka said under the recently negotiated agreement, Sri Lanka would take delivery of 50,000 m.t. of rice, at a price of USD 400 per ton. He said the government would like to purchase a further 50,000 m.t. from Burma.
The transaction was finalized following the recent visit to Burma by a delegation led by Trade Minister Bandula Gunawardena, he said.
Gunawardena said Sri Lanka had to depend on Burma as several other major rice producers including India had restricted rice exports.
`We were fortunate to reach an agreement with Burma,` he said. Given the crippling sanctions imposed on Rangoon by the global community, such arrangements with that country was difficult, Gunawardene noted.
The minister expected a kilo of the Burmese rice would be sold at around Rs. 50 to 55.
The negotiations with Burma had been facilitated by recent high profile visits undertaken in both directions and Sri Lanka s friendly stance towards the administration there during the ``pro-democracy protests.
Both Gunawardena and Dr. Ratnayake lamented their inability to bring in stocks from abroad ahead of the festive season due to reasons beyond their control.
Ratnayake said both India and Thailand had restricted exports to meet domestic demand in their own countries. He asserted the growing market in India and China would cause a major shortage of food items including rice by end of this year.
`If we fail to step up local production there ll be chaos,` he warned. ``The impending crisis would have a staggering impact on the people.
He hoped the country would comprehend this danger.
Co-operatives Commissioner A. P. G. Kithsiri said their plan to import 10,000 m.t of rice through Markfed and Coopfed for distribution through cooperatives had to be abandoned due to restrictions imposed by India.
Agrarian Services Minister Siripala Gamlath said contrary to media reports the government hadn t bought any paddy. The government couldn t have competed with the private sector which was ready to pay a higher price for samba and nadu rice.
Gamlath, one of the biggest private sector rice millers, said the continuing inclement weather had a catastrophic impact on the market. The high prices are the result of unseasonal rainfall, he explained.
Both officials and politicians said although the government removed the import duty on rice, imposed to protect local producers, it didn t have the desired result. There had been no significant import of rice due to restrictions imposed by major producer countries.