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Red rice shortage blamed on RW, chicken implicated

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ECONOMYNEXT –Sri Lanka’s red rice which disappeared from shop shelves after price controls were strictly enforced, was due to the ex-President Ranil Wickremesnghe distributing rice, Trade Minister Wasantha Samarasinghe claimed.

“The last government before the Presidential election did a dastardly (Alu-goth-theru, thaka-thiru wedak) before the presidential election,” Samarasinghe told parliament.

“They took red rice from mills in the South paying 10 rupee extra (per kilo) and distributed it around the country.”

“They gave red rice to people who do not usually eat it,” he claimed.

Red rice was mostly eaten by Sri Lankans in the South and the Ratnapura district, he claimed.

Sri Lankans consume about 2.4 million metric tonnes of rice a year, according to government data. This works out to 200,000 metric tonnes a month.

People also consumed about 100,000 metric tonnes of wheat, he said.

About 65 percent of the rice grown by farmers was Nadu (white grain used for par-boiled rice) and about 15 percent was kekulu rice according to Minister Samarasinghe.

About 15 percent was Samba and about 4 to 5 percent was Basmati rice used in hotels, he said.

Last year the paddy harvest from two seasons was 4.9 million metric tonnes according to official estimates, which should have given 2.9 million metric tonnes of milled rice, he said.

This should have resulted in a 500,000 tonne surplus, he said.

When rice prices went up towards the end of the year, (which happens in many years) ahead of the Maha harvests due to import controls, a narrative was initially spread that a ‘mafia’ of millers was hiding stocks.

“Now we know that there are no stocks,” he said.

Minister Samarasinghe said mills in the North Central, East and South were all checked.

It is a basic economic principle taught in first year economics that when a price control is set below the market clearing price goods go off the shelves and a ‘black market’ is created at the market clearing price.

The black market at which red rice is available is now around 270 rupees a kilo, compared to a price control of 220 rupees.

The Consumer Affairs Authority had embarrassed several governments and put consumers in difficulty with its price controls in the recent past.

In 2021 as the central bank printed money and prices went up, the then government also slapped price controls. But later, then Trade Minister Lasantha Alagiyawanna, realized the problem and apologized to the public for putting them in difficulty.

“We admit that the price controls created shortages,” Minister Alagiywanna said at the time in a very rare occurrence. “We apologize for the inconvenience caused to consumers. But the government did this with the best intentions.”

Authorities initially claimed that Nadu rice was being hidden by the ‘mafia’ and slammed a price control for Red rice ten rupee below.

An examination of past data shows that red rice price overtook that of Nadu and went close to the premium Samba rice in December as New Year demand went up and stocks ran down.

By setting a ceiling price below the market clearing price, a government can create a shortage in any good.

Chicken were also implicated in the rice crisis, he said.

A legislator interrupted to suggest that perhaps Minister Samarasinghe’s statistics were not correct.

“I was just going to get to that point,” Minister Samarasinghe said. “On one side there was a red rice shortfall, because red rice was distributed to those who did not do it.

“In Sri Lanka there are 125 lakhs of layer chicken. They have 80 lakhs of chicks. This industry buys 300,000 metric tonnes of rice a year.”

Red and white raw rice is also made into flour. There was also an ornamental fish industry that needed feed, he said.

“So, our departments, our institutions should reduce this from the harvest,” he said.

However, chickens have been farmed in previous years as well. Sri Lanka has government controls not only imports of rice but maize as well, which is the key ingredient of animal feed.

The current administration also relaxed the import of rice, but did not take off the tax which amount close to 50 percent of world prices.



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Steps initiated to safeguard Sri Lanka’s Maritime Heritage

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Taking a decisive step towards safeguarding Sri Lanka’s maritime heritage, a high-level discussion was held today (18) at the Ministry of Environment.

Jointly chaired by the Deputy Minister of Environment Anton Jayakody and Deputy Minister of Defence Aruna Jayasekara, the meeting focused on the urgent need to prevent environmental pollution and protect the coastal waters around the northern seas and their adjacent islands.

The discussion was attended by senior naval officers, Secretary to the Ministry of Environment  K.R. Uduwawala, Chairman of the Marine Environment Protection Authority (MEPA)  Samantha Gunasekara, Director General of the Coast Conservation and Coastal Resource Management Department Prof. Turny Pradeep Kumara, and Conservator General of Forests  along with several other officials from the Department of Wildlife Conservation and the Ministry of Environment, and the senior ecologists from IUCN.

The discussion placed a strong emphasis on enhancing environmental threats and accelerating the declaration of  new Marine Protected Areas (MPAs) in the northern region. Officials emphasized that protecting this marine zone is crucial for conserving biodiversity, securing the livelihoods of local fishing communities, and enhancing Sri Lanka’s strategic maritime profile on the global stage.

Primary attention was drawn to the severe ecological destruction caused by Illegal, Unreported, and Unregulated (IUU) fishing. The Ministers highlighted the grave threats these unlawful activities pose to both marine biodiversity and the economic stability of local fishermen, stressing the immediate need for comprehensive surveillance and stricter enforcement mechanisms. Furthermore, extensive discussions took place on how to divest a strategic destructive fishing practices—such as dynamite fishing, unauthorized spearfishing, and the use of banned fishing gear—which inflict irreversible damage on fragile coral reef systems and endangered fish species.

The meeting also addressed infrastructure and governance gaps within fishing harbors, identifying the lack of proper management and formal regulatory mechanisms as key vulnerabilities. As a progressive step forward, suitable islands and surrounding marine zones in the Northern Province have been identified for official declaration as Marine Protected Areas. It was clarified that establishing these MPAs will not restrict the livelihoods of local communities; instead, they are designed to protect and promote sustainable fishing and eco-tourism. Moving forward, these protected zones will be developed into premier eco-tourism destinations, creating new economic opportunities for the region. Ultimately, declaring these Marine Protected Areas will bring international recognition and strategic importance to Sri Lanka’s northern islands. By establishing these zones, Sri Lanka aligns itself strongly with global biodiversity commitments, showcasing its role on the international stage as a responsible custodian of the Indian Ocean’s rich marine resources.

During this discussion, it was proposed to establish a working group comprising experts from the Ministry of Tourism, the Ministry of Fisheries, the Ministry of Defence, the Ministry of Environment, and the Ministry of Justice to implement a joint mechanism for protecting the country’s coastal and marine resources, with the Ministry of Environment taking the lead in this initiative.

This conservation initiative marks yet another milestone in the country’s ongoing journey toward achieving a sustainable biosphere and an evergreen future.

 

 

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Surcharge on vehicle imports irks SJB, pleases ex-Finance Minister

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Opposition and SJB Leader Sajith Premadasa has launched a scathing attack on the government for the 50% Customs duty surcharge on vehicle imports, accusing the latter of burdening the public with additional costs, despite its earlier promises to make vehicles more affordable.

Addressing the media in Tissamaharama, on Saturday, Premadasa said those who had once pledged to make a Vitz car available for Rs. 1.2 million had now moved in the opposite direction by increasing duties on vehicles.

Premadasa questioned assurances given by Deputy Finance Minister Dr. Anil Jayantha Fernando that vehicle prices would not significantly increase due to the surcharge, asserting that the President, the government and its 159 Members of Parliament must take responsibility for the consequences of the decision.

The Opposition Leader also voiced concern over the depreciation of the rupee, warning that the local currency was weakening rapidly against the US dollar and that continued depreciation would lead to higher inflation, rising commodity prices and further increases in the cost of living.

He said economic stabilisation could only be achieved through stronger export earnings, growth in the tourism sector, higher foreign remittances and increased Foreign Direct Investments (FDIs).

Premadasa further accused the President, the Finance Minister and the Government of lacking a basic understanding of economics, claiming that repeated policy mistakes had adversely affected the economy and the public.

He called for an increase in subsidies, arguing that rising living costs were placing families under severe financial strain and affecting their ability to look after their families.

Premadasa added that shoring up foreign reserves and arresting the depreciation of the rupee would be critical in meeting debt obligations and safeguarding public welfare.

Meanwhile, the Vehicle Importers Association of Sri Lanka (VIASL) warned that the Customs duty surcharge would lead to steep increases in vehicle prices, further reducing affordability for consumers.

VIASL spokesperson Arosha Rodrigo told the media that the surcharge, introduced through a gazette notification, had come on top of existing customs duties and the depreciation of the rupee against the US dollar.

“Vehicle prices are rising at a rate that no one can afford. The new surcharge on top of this is unbearable for vehicle importers. Many vehicles will increase by Rs. 1.5 million to Rs. 2.5 million,” Rodrigo said.

He explained that customs duties on all vehicles, whether imported privately or through dealerships, would rise due to the duty surcharge.

Responding to mounting criticism, Deputy Finance Minister Dr. Anil Jayantha urged the public not to be misled by what he described as false claims that vehicle prices would rise by 150% due to the surcharge.

Dr. Jayantha said misinformation was being circulated regarding the surcharge and insisted that claims of a 150% increase in taxes or vehicle prices were “completely false.”

He explained that the temporary three-month surcharge was intended to delay non-essential private vehicle imports and reduce pressure on foreign exchange reserves during a period of economic uncertainty.

“The message we are giving is simple: if you can postpone importing a vehicle for personal use, please do so. This is not a move intended to increase vehicle prices,” he said.

According to the Deputy Minister, existing taxes on vehicle imports were already at approximately 130%, and the newly announced surcharge mechanism had been widely misunderstood in public discourse.

He further clarified that vehicles imported under Letters of Credit opened on or before May 15, 2026, would not be affected by the revised tax structure.

“Even if those vehicles arrive months later, they will continue to be taxed under the previous rates. The new tax structure only applies to LCs opened after May 15,” Dr. Jayantha said.

He also stressed that there was no reason for consumers to rush to purchase vehicles, fearing price increases.

Dr. Jayantha noted that motorcycles, three-wheelers and vehicles imported for commercial purposes had been excluded from the temporary measure.

He maintained that the policy was aimed at managing pressure on foreign exchange reserves, maintaining economic stability and curbing unnecessary import demand during the three-month period.

Meanwhile, former Finance Minister Ali Sabry, in a social media post, has endorsed the government’s decision to impose a 50% Customs duty surcharge on vehicle imports, calling a timely intervention to protect the country’s foreign currency reserves. He has said it is a necessary safeguard.

“The Government’s decision to impose a 50% surcharge on the import of vehicles, in the midst of escalating global uncertainty and external pressures, is a prudent and timely measure aimed at protecting Sri Lanka’s fragile external sector and preserving scarce foreign exchange reserves,” Sabry said in a statement on social media.

He has also praised the government’s decision to exempt the Letters of Credit opened on or before May 15, 2026, from the surcharge. “It avoids unnecessary uncertainty, prevents retrospective complications, and protects already embattled importers from further hardship and arbitrary administrative difficulties. In times of crisis, clarity, consistency, and fairness in implementation are just as important as the policy itself,” the former Minister has said, warning that Sri Lanka’s recovery remains vulnerable to global conflicts that disrupt energy markets, trade routes, supply chains, investor confidence, tourism, and financing conditions.

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Bill to repeal Chief of Defence Staff Act gazetted

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A Bill seeking to repeal the Chief of Defence Staff Act No. 35 of 2009 has been published in an extraordinary gazette notification, paving the way for the abolition of the post of Chief of Defence Staff.

The draft legislation, titled the “Repeal of the Chief of Defence Staff Act, 2026,” was published in the Government Gazette on May 15 under instructions of the Minister of Defence, according to official sources.

The Bill seeks to repeal the existing law and provide for matters connected with and incidental to its repeal.

Under the proposed legislation, the office of the Chief of Defence Staff will cease to exist from the date the new Act comes into operation. The incumbent holding the post will thereafter be reassigned to the respective armed service to which he belongs.

The draft Bill further stipulates that all movable and immovable property belonging to the Office of the Chief of Defence Staff will be vested in the Ministry in charge of the subject of defence once the Act takes effect.

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