Hoarding drives prices above Rs. 210 a kilo

By Shamindra Ferdinando

State Minister of Co-operative Services, Marketing Development and Consumer Protection Lasantha Alagiyawanne yesterday (29) said that 5,400 metric tons of sugar imported at 25 cents duty a kilo had been detected in three separate warehouses.

The detections were made amidst a shortage of sugar in the market with the price of a kilo of sugar rising above Rs 200.

The Finance Ministry reduced the duty on a kilo of sugar from Rs 50 to 25 cents by issuing a gazette bearing 2197/12 on Oct 13, 2020.

MP Alagiyawanne said that identities of the importers were known.

In spite of strong criticism both in and outside parliament, the government declined to reverse its decision.

Chairman of the Committee on Public Finance (COPA) Anura Priyadarshana Yapa (SLPP Kurunegala District) on January 5, 2021 told the parliamentary watchdog committee that the consumers had not benefited from the sharp reduction of duty at all.

State Minister Alagiyawanne told The Island that the detection of hoarded sugar was made close on the heels of raids on 52 warehouses where the Consumer Affairs Authority detected about 100 metric tonnes of rice. Referring to large scale hoarding of sugar and rice, the SLFPer admitted that the country lacked laws to deal with such exploitation of the public.

Acknowledging that successive governments couldn’t absolve themselves of the responsibility for their failure to enhance required laws in that regard, Gampaha District MP Alagiyawanne said that the issue at hand would be discussed with the Attorney General’s Department. Dismissing the fines that could be prescribed for hoarding et al as nothing but a joke, the State Minister said that the maximum prison term too was six months imprisonment.

JVP leader Anura Kumara Dissanayake yesterday said that the sugar racket had been bared in parliament in December last year. The government did nothing as the reduction of duty was effected to help government cronies, MP Dissanayake charged.

Soon after the issuance of the gazette in Oct last year, 26,000 metric tonnes of sugar was brought in. That shipload had been followed by another 12,500 mt and 13,000 mt, the JVPer said, pointing out that the public were deceived by those who propagated the lie a kilo of sugar would be made available at Rs 85.

Dissanayake said that the government, particularly the Finance Ministry, owed an explanation regarding the issuance of the particular gazette. “Hoarding sugar is a serious matter. But, the real issue at hand is the massive loss suffered by the Treasury as a result of the Oct 2020 gazette. This loss is in addition to depriving the Treasury of over Rs 500 bn by doing away with a range of taxes immediately after the 2019 presidential election,” MP Dissanayake said.

The JVP Leader pointed out that several weeks ago three major importers were found to be hoarding fertiliser. The public would like to know whether any action was taken against them, he asked alleging that bigger the crime the perpetrators found it much easier to side step the law.