Responding to the skyrocketing food prices, Sri Lankan Trade Minister, Bandula Gunawardena, is set to propose a rationing system for sugar and essential items sold via Lanka Sathosa outlets, the largest retail chain in the country.

Over the past two weeks there has been a rapid increase in the price of goods such as sugar and dhal, with a kilo of sugar now costing Rs. 240 and a kilo of dhal now costing Rs. 245. Gunawardena attributes the rise in food costs to “fluctuating foreign exchange rates an increase of container handling and shipping charges and the shortage in supply compared to the demand”, reports the Sunday Times LK.

Despite this proposal the government has maintained that the private sector will to continue to work in its present form.

A further proposal being considered is to provide sugar, dhal and other essentials only for low-income groups at a controlled price.

Dependence on regional powers

Gunawardena has further reported an agreement with India to import 100,000 mt of rice varieties such as Nadu, Kekulu and Ponni Samba if there is an attempt by traders to increase prices. He also detailed efforts to decrease the price of Basmati by importing 6,000kg from Pakistan in three weeks.

Responding to the fuel crisis, Sri Lanka has turned to the United Aarab Emirates (UAE) to purchase crude oil and petroleum on a long-term credit basis. Energy Minister Udaya Gammanpila claimed that this could lead the government to save up to US$ 2 billion through this process where credit would be sought for six months.