Business

Rising price of rice in Sri Lanka: The roots and remedies

Published

5 years ago

2021/10/9

By Manoj Thibbotuwawa

Rice is the dietary staple and the major domestic crop cultivated in Sri Lanka since ancient times. Therefore, the production and availability of rice are closely tied to food security as well as political stability in the country. Every government since independence has given prominence to the goal of achieving self-sufficiency in rice. Accordingly, a significant amount of resources are allocated for the supply of irrigation water, land development, research on technological improvements, farm mechanisation, and support facilities such as credit, subsidised inputs, and farmer welfare measures.

As a result, the cultivation of paddy and production of rice increased steadily with Sri Lanka reaching near self-sufficiency in rice and rice imports dropping to an insignificant amount. Despite these achievements, problems relating to the paddy and rice sector continue to occupy a foremost place among the country’s socio-economic issues. At present, supply shortages and rising retail prices have caused severe social unrest. In this background, this blog identifies the current problems in the rice sector and suggests some policy recommendations.

Demand and Supply Dynamics of Rice

Rice is an essential consumer good with inelastic demand in the local market and the consumption of rice is important not only to the economy but to Sri Lankan culture as well. Based on 2016 per capita consumption of 104.5 kg per annum, the annual national rice demand was 2.1 million MT which is equivalent to 3.2 million MT of paddy. After adjusting for seed paddy, processing, waste and other requirements, Sri Lanka needs to produce 4 million MT of paddy to fulfil the above national demand. No significant change in national requirement is expected in the near future due to the balance between gradual reduction in per capita consumption and population growth.

Sri Lanka managed to achieve this target over the last two years and is on course to achieve the same this year as well. The 2020 Yala output of 1.9 million MT paddy (equivalent to 1.3 million MT rice) produced around September 2020 was sufficient to feed the country for about six months. The 2020 Maha output of 3.1 million MT paddy (equivalent to 2 million MT rice) produced around March 2021 is sufficient to feed the population for about nine months. The Department of Agriculture estimated a harvest of 1.5 million

MT for the 2021 Yala. Therefore, any current or speculatory rice shortage is not expected.

The Problem: Pricing Dilemma

The rice market has a delicate system of price determination that is associated with availability in the market. It is connected to seasonal harvests of Maha and Yala leading to high fluctuation of prices over certain months of the year. From January, the prices of paddy and rice decline gradually and reach their lowest in March with the major Maha harvest. It increases slightly from April and undergoes a minor slump during July-August when the minor Yala harvest reaches the market. The rise of the prices of all types of rice is quite sharp from September onwards reaching the peak in December and begin to decline again in January continuing the cycle. The difficulties faced by consumers due to a sharp rise in rice price during September-January is one of the most politically sensitive issues in the country.

Severe disruptions happened to this usual pricing mechanism in recent times by the cooperative decision making and anti-competitive practices of large and leading millers who have large storage facilities, purchasing power and economic stability. Farmers are inherently disadvantaged in the market because a large number of farmers sell their harvest at the same time due to lack of capacity to store paddy and credit bound relationships due to up-front capital requirement for uncertain several months.

Cooperative decision-making by large millers who handle a sufficiently large (about 33.8%) share of purchase in the paddy market gain an oligopolistic advantage by releasing large stocks of rice to the market during the harvesting period to create a glut so that they can purchase paddy at minimum prices. Also, their anti-competitive practices such as exclusive supply agreements, horizontal cartel practices and compelling farmers to sell paddy only to them prevent small scale millers from purchasing paddy. Curtailing stocks thereafter create a scarcity of rice to maintain a high price till the next harvest period.

The Remedies

Different command-and-control methods such as adhoc price controls and emergency regulations were used by successive governments to control the market. These were easy to enact, yet have proven ineffective. Therefore, measures that provide facilitation, monitoring, and regulation should be the key strategies of the government in both the rice and paddy markets while allowing market forces of supply and demand to determine prices.

Promoting competition is the key to constrain the oligopolistic market power enjoyed by the large millers. However, small and medium millers will find it difficult to survive in the market due to strong competition from the successful, large ones that dominate the space with wide-ranging products including premium and mass markets. Thus, small and medium millers should be empowered through credit facilities to buy paddy and to upgrade their mills to achieve economies of scale and production cost advantage.

Further, organising them under a suitable collective business model such as cooperatives will facilitate competition while providing a sustainable solution. In the meantime, as a short-term measure, the Paddy Marketing Board (PMB) can increase its purchases so that these can be milled by small and medium millers on a quota basis and distributed through Sathosa.

While the Consumer Affairs Authority Act, No. 09 of 2003 was designed to control anti-competitive practices that harm consumers, this is constrained by resource limitations and information asymmetry. This can be minimised by establishing a market information system with mandatory reporting under Section 12 of the Paddy Marketing Board Act No. 14 of 1971 which provides for recording data on production, sale, supply, storage, purchase, distribution and milling of paddy and rice.

Other than the anti-competitive practices, the cost of production of paddy and bargaining power are also factors that determine the price received by farmers. Modern technologies should be promoted to optimise the input use so that the cost of production could be minimised. The current policy drive on organic farming could be rationalised to reduce the dependency on costly imported inputs such as chemical fertiliser and agrochemicals gradually.

Small-scale farmers should be organised under suitable operational units such as The Japan Agricultural Cooperatives (JA) so that their farming efforts are coordinated and consolidated to increase their collective bargaining power. Decisions on rice importation should be based purely on market conditions given by the proposed market information system. These strategies can stabilise the prices of paddy and rice without severe fluctuations and make paddy farming a viable livelihood with a sustained income for small-scale farmers.

Link to blog: https://www.ips.lk/talkingeconomics/2021/10/07/rising-price-of-rice-in-sri-lanka-the-roots-and-remedies/

Manoj Thibbotuwawa is a Research Fellow at IPS with research interests in agriculture, agribusiness value chains, food security, and environmental and natural resource economics. He holds a BSc (Agriculture) with Honours from the University of Peradeniya, an MSc (Agricultural Economics) from the Post-Graduate Institute of Agriculture at the University of Peradeniya, and a PhD from the University of Western Australia. (Talk with Manoj – manoj@ips.lk).

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Business

Malaysia courts more Sri Lankan travelers as ‘Visit Malaysia 2026’ gathers steam

Published

16 hours ago

2026/07/22

Sahan Weerasooriya

Malaysian H.C. Badli Hisham Adam: ‘Fresh biz opportunities

Malaysia is intensifying efforts to attract more Sri Lankan travelers by promoting its diverse tourism offerings, strong air connectivity, Muslim-friendly facilities and expanding business partnerships ahead of the ‘Visit Malaysia 2026’ (VMY2026) campaign.

Addressing the Tourism Malaysia product presentation yesterday in Colombo, Malaysian High Commissioner to Sri Lanka Badli Hisham Adam said tourism remains one of the strongest pillars of the long-standing bilateral relationship between Malaysia and Sri Lanka, helping strengthen cultural understanding, business links and people-to-people ties.

The event, organised by Tourism Malaysia Chennai in collaboration with the High Commission of Malaysia in Colombo, brought together Malaysian tourism stakeholders, airline representatives, Sri Lankan travel industry professionals and members of the media to explore new business opportunities.

The High Commissioner said Sri Lanka continues to be an important source market for Malaysia, with growing numbers of Sri Lankan travelers seeking destinations that combine diversity, affordability, quality experiences and convenient connectivity.

“As part of ‘Visit Malaysia 2026’, we warmly invite Sri Lankan travelers to discover the richness of Malaysia, he said.

Highlighting Malaysia’s tourism strengths, the envoy said the country offers a wide range of attractions, including multicultural cities, UNESCO World Heritage Sites, pristine beaches, tropical rainforests, cool highlands and unique wildlife.

These are complemented by world-class shopping, family-friendly attractions, educational opportunities, wellness and medical tourism, business events and internationally renowned hospitality.

He also stressed Malaysia’s position as the world’s leading Muslim-friendly destination, supported by an extensive halal ecosystem with internationally recognised certification, halal-certified restaurants, easily accessible prayer facilities and family-oriented amenities across the country.

Despite ongoing geopolitical uncertainties around the world, the High Commissioner said Malaysia remains a stable, peaceful and welcoming destination for international travelers.

He urged Sri Lankan travel agents to strengthen collaboration with Malaysian tourism providers by developing innovative travel packages targeting leisure travelers, business visitors and event participants.

The presentation featured leading Malaysian tourism partners, including Wyndham Ion Majestic, Lotus Desaru, Key Term Holidays representing the Sabah Tourism Board and Asian Overland representing The PULSE Group, showcasing Malaysia’s diverse tourism experiences and investment in the Sri Lankan market.

The envoy also acknowledged the contribution of airline partners and the media in enhancing Malaysia’s visibility and improving travel connectivity between the two countries.

Looking ahead to ‘Visit Malaysia 2026’, he said the future growth of tourism would depend on stronger collaboration, innovation and meaningful partnerships between industry stakeholders.

He expressed confidence that closer cooperation between Malaysia and Sri Lanka would generate fresh business opportunities while encouraging more Sri Lankan visitors to experience Malaysia’s culture, diversity and hospitality.

The High Commissioner concluded by expressing hope that the networking session would lead to stronger commercial partnerships and contribute to the success of ‘Visit Malaysia 2026’, further deepening tourism and economic ties between the two friendly nations.

By Ifham Nizam

Business

Women Empowered Global launches ‘Leadership Lab’

Published

16 hours ago

2026/07/22

Sahan Weerasooriya

Senela Jayasuriya, Founder and CEO of Women Empowered Global.

Women Empowered Global (WEG), a network of award‑winning female leaders, corporate CXOs and entrepreneurs, experts and thought leaders dedicated to empowering women from six continents, unveiled the ‘WEG Leadership Lab’, a 24‑week virtual intensive programme, commencing 26 September. The programme is designed exclusively for women leaders who are ready to accelerate their careers, amplify leadership visibility, and drive transformational growth.

The women‑only leadership experience breaks the mould of conventional training, offering a powerful blend of masterclasses, mentorship, and practical leadership tools tailored for rising leaders, managers, and senior professionals. Participants will gain international exposure, sharpen essential skills, and the opportunity to join a vibrant knowledge‑sharing community which fosters confidence, resilience, and impact.

“The WEG Leadership Lab is not for casual growth. It is for women who are serious about transforming their leadership journey,” said Senela Jayasuriya, Founder/CEO, Women Empowered Global. “By combining global expertise with local delivery, we are creating pathways for women across manufacturing, trading, finance, marketing, technology, and management, as entrepreneurs, business owners, fractional executives, or corporate leaders, to thrive and build a more inclusive leadership landscape.”

WEG’s platform facilitates international exposure and career development for professionals and connects more than 4,000 members worldwide. The Leadership Lab builds on WEG’s flagship initiatives, including the 1 Million Women in Power campaign, the African Women Leadership Forum, the Business Hub, and the Global Online Academy. The programme aims to deliver a transformative journey equipping women to step boldly into leadership roles locally and internationally.

Led by Senela Jayasuriya (MBA, UK), an internationally recognized and awarded leadership & empowerment coach and innovation partner, keynote speaker, and certified expert, WEG collaborates with DEI specialists, corporate boards, Business and HR leaders, to design programmes which advance women’s careers, leadership visibility, equity, and inclusion. To date, she has successfully delivered leadership development programmes to more than 20,000 professionals.

Business

JKCG Auto and Green EV join forces to build Sri Lanka’s most expansive EV charging network

Published

16 hours ago

2026/07/22

Sahan Weerasooriya

John Keells CG Auto (JKCG Auto), the authorised distributor of BYD and Denza in Sri Lanka, has launched a strategic partnership with Green EV on 26th June 2026 to significantly expand the charging infrastructure available to its customers across the island. The collaboration, formalised through a Memorandum of Understanding (MOU), marks a pivotal step in JKCG Auto’s ongoing commitment to building a comprehensive and reliable New Energy Vehicle (NEV) ecosystem in Sri Lanka.

Through this partnership, BYD and Denza owners will gain seamless access to Green EV’s public charging network of 100+ DC fast chargers and 70 AC chargers, spanning 20 districts and all nine provinces of Sri Lanka, from Jaffna in the north to Hambantota in the south, and from Puttalam on the northwest coast to Trincomalee and Ampara on the eastern seaboard, encompassing a mix of 40kW, 60kW, and 120kW fast-charging infrastructure. The network has been designed to ensure that customers can charge conveniently and confidently, whether in the heart of Colombo or in suburban and outstation communities, removing one of the most commonly cited barriers to EV adoption in Sri Lanka. Further strengthening customer confidence, Green EV has partnered with SLIC to provide a comprehensive insurance cover of LKR 100 million for every Green EV charging station, offering protection against potential damages and ensuring complete peace of mind for every user.

The initiative reflects JKCG Auto’s broader strategy to invest in the foundations of sustainable mobility, ensuring that the transition to electric vehicles is supported not only by world-class vehicles, but by a dependable ecosystem that addresses the practical needs of everyday ownership.

“If the future of mobility in Sri Lanka is going to be electric, success will hinge on how accessible we are able to make the actual vehicles, as well as the enabling infrastructure around them. JKCG Auto is proud to partner with other visionaries like Green EV to ensure that we eliminate range anxiety, so that every customer – whether in Colombo or anywhere in Sri Lanka will have the confidence to go electric,” JKCG Auto Chief Executive Officer, Charith Panditharatne.