Faced with shortage, govt. throws open sugar market to competition

By Shamindra Ferdinando

State Minister of Co-operative Services, Marketing Development and Consumer Protection Lasantha Alagiyawanne yesterday (01) said that the duty on white sugar would remain at 25 cents a kilo for the time being to ensure the control price remained the same.

The Lawmaker said so when The Island asked him whether the duty would be revised in the wake of the government lifting restrictions on the import of sugar as stocks diminished rapidly. The wholesale price of white sugar is at Rs 116 and retail Rs 122.

Responding to another query, the State Minister estimated the available stocks of white sugar and locally produced red sugar needed to be replenished quite urgently to ensure the red sugar is priced at Rs 125. According to the State Minister the stock available, included the white sugar variety used for other than domestic uses.

Asked whether it was fair to continue with 25 cents duty on a kilo of sugar at a time both government as well as Opposition lawmakers criticised the unprecedented duty slash, SLFPer Alagiyawanna emphasised that there was no basis for such criticism. The State Minister stressed that the position taken by the Committee on Public Finance (CoPF) as regards the duty reduction didn’t actually reflect the situation on the ground. The CoPE’s criticism was unfounded, the Gampaha District MP said.

CoPA Chairman Anura Priyadarshana Yapa is on record as having said that the duty reduction didn’t benefit the consumer at all. Lawmaker Yapa called for a report from the Finance Ministry in that regard.

MP Alagiyawanne said that price controls were imposed on sugar in the wake of kilo of sugar going beyond Rs 230 or 240 in the market. The State Minister said that the Finance Ministry had abolished the license system to enable any interested party to import sugar.

The Finance Ministry on Oct 13, 2020 issued a gazette notification pertaining to the much debated unprecedented duty reduction from Rs 50 to 25 cents a kilo.

Those who found fault with that didn’t realize how the price mechanism worked, the State Minister said, tangible measures were being taken to prevent shortage of sugar in the market.

The lawmaker said that revision of duty couldn’t be contemplated at the moment under any circumstances. According to the State Minister, as sugar hadn’t been imported into the country in the recent past the available stocks were diminishing quite rapidly.

President Gotabaya Rajapaksa, in terms of emergency regulations declared at midnight August 31, took tangible measures to ensure sufficient supply of rice, sugar and other essential items. The President also appointed Maj. Gen. Senarath Niwunhella as the Commissioner General of Essential Services (CGES) to work in unison with the Consumer Affairs Authority (CAA) to reign in the traders’ Mafia. In a series of recent raids, authorities seized nearly 30,000 tonnes of sugar imported by four companies.

However, the government has again opened up the sugar market close on the heels of rescinding the price controls on both paddy and rice.

Meanwhile, SJB lawmaker Mujibur Rahman said that contrary to government claims the whole supply system was in tatters. Declaring that the government couldn’t suppress the actual situation by media gimmicks, the former UNPer said milk powder, rice, sugar, cement, garlic and almost all essentials were in short supply. The top SJB spokesperson said that the government owed an explanation as to how it intended to sustain basic requirements as the national economy fast deteriorated.

The MP asked whether in spite of repeated threats directed at those accused of hoarding and manipulating the market, any action was initiated against them. The decision to rescind the gazette on the price of rice revealed the government lacked even basic strategy to ensure market stability, the MP said.