Sri Lanka state trading firm imports Pakistan rice to cool crisis
Dec 14, 2010 (LBO) – A Sri Lankan state trading firm has imported a stock of rice from Pakistan as domestic prices shot up in a market mired in heavy handed state intervention.
Consumer affairs minister Bandula Gunewardene says a 5,000 tonne stock of IRI-6 white raw rice imported from Pakistan would be sold through some 11,000 co-operative outlets.
The State Trading Corporation, a unit of the consumer affairs ministry is wholesaling the rice at around 47 rupees a kilo and it would be retailed through co-operative shops at 50 rupees a kilo, he said.
“Even supermarket chains would be able to buy this from STC at this price if they want,” Gunewardene told reporters.
Now Sri Lanka’s rice prices have overtaken the so called ‘food crisis’ levels of 2008. At the time also Sri Lanka imported rice to keep local prices down.
Red raw rice now retails for prices between 72 to 75 rupees a kilo. The premium grade ‘Samba’ rice is selling at 88 to 112 rupees depending on the type.
The rice imports came as some shops, especially supermarkets ran out of the popular red raw rice.
Shops run of supplies, a situation known as a ‘shortage’ in economic terms, happens only when there are price controls. Without government interference, prices would spike and then settle as supplies, imports or other stocks come back to the shelves.
A ‘black market’ where stocks are sold at higher than the controlled price, happens only with government intervention.
In the third quarter of 2009, the paddy sector had contracted 28.4 percent, according to the government’s statistics office.
Sri Lanka imposed price controls in mid 2008 amid a so called ‘food crisis’ in the world.
Sri Lanka’s rice prices have been kept at the so-called ‘food crisis’ levels in 2008 to help a powerful rice milling lobby, and politicians who are chasing farmer votes. International rice prices fell around 40 percent after the global commodity bubble burst in mid 2008.
Sri Lanka’s rice market is mired in heavy handed government intervention. The government blocked imports by a 25 rupee a kilo tax.
Payment of 20% Bonus Interest to Senior Citizens on rupee deposits maintained in licensed banks
With effect from 1.1.2010, the Government has decided to pay a 20% bonus interest to senior citizens on rupee deposits maintained in licensed banks.
All Sri Lankan citizens above the age of 60 years will be eligible to receive the bonus interest on their rupee savings and fixed deposits held in licensed banks. Bonus interest shall be equal to 20% of the interest that accrues after 1.1.2010 on rupee deposit accounts of senior citizens, subject to a limit of Rs. 120,000 per annum, per person.
The operating instructions to licensed banks in this regard have been issued, today.
Sri Lanka water supply expansion contract to Chinese firm
Jan 10, 2010 (LBO) – A contract to upgrade the water supply in Sri Lanka’s capital Colombo valued at 1,895 million rupees has been awarded to China Geo Engineering Corporation, the government’s information office said.
China Geo will construct ground reservoirs at Maligakanda and Elie House, a water tower at Gothatuwa, a transmission lone from Ambatale and a distribution main from Kotikawatte-Mulleriya.
China is a top lender and builder of Sri Lanka’s infrastructure.
The Sunday Times newspaper quoting government documents said last month that contracts worth 6.1 billion US dollars were planned with China in post war reconstruction largely with financing from the Export Import Bank of China.
The construction of a series of roads in the north has been given to four Chinese firms after a cabinet decision on October 06, for completion within 30-months The Sunday Times said.
China National Aero Technology Import and Export Corporation, China Harbour, China Railway No 5 Engineering Group Co. Ltd. and Synohydro Corporation would get contracts with 94.2 billion rupees.
A Chinese loan of 245 million US dollars (about 27.9 billion rupees) would finance a 56 kilometre railway track running to Kankasanthurai in Jaffna.
The projects would largely use Chinese labour, the newspaper said. A 200 million dollar performing arts building gifted by China that is now being built is using about 1,000 Chinese workers, the report said.
Several other contracts on preferential buyers’ credit totalling 646.8 million US dollars has also been signed on August 07, the report said.
These included a second phase in a coal power project in Puttalam, financing for a second phase of a port in Hambantota and an airport in Hambantota.
The Hambantota habhour is being build by China Harbour Engineering Corporation.