News
Red rice shortage blamed on RW, chicken implicated
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.
The computer system at the Department of Registration of Persons has been rectified and the services are back to normal.
… questions why the price of a by-product like kerosene was jacked up
China Petrochemical Corporation (Sinopec Group) and Indian Oil Corporation Lanka (IOC PLC) have increased the prices of certain products significantly more than the Ceylon Petroleum Corporation (CPC). However, the fourth player in the market R.M. Parks, a US company in collaboration with Shell that launched operations here in late February last year, has increased its prices in line with Ceypetco.
Convener of the Samagi Joint Trade Union Alliance, Ananda Palitha, yesterday (23) told The Island that foreign players had immensely benefited from the latest price revision at the expense of Sri Lankan consumers.
Alleging that Sinopec and Lanka IOC PLC had become a law unto themselves, Palitha pointed out that the failure on the part of successive governments to establish an Independent Commission and Regulatory Authority for the petroleum sector had allowed Ceypetco and all foreign players to do as they please. Palitha said that in the absence of proper regulatory mechanism, CPC/Energy Ministry should ensure genuine competitiveness in the market.
Palitha said that the NPP government had exploited the ongoing Middle East war to earn unconscionable profits at a time the economy was reeling under the impact of the Hormuz Strait blockade. According to him, all four players increased Auto Diesel by Rs. 79 to Rs. 382 per litre, and Octane 92 Petrol by Rs. 81 to Rs. 398 per litre, while Sinopec and Lanka IOC PLC price list differed in respect of other products. At most filling stations Octane 92 was not available and only higher priced Octane 95 petrol was available.
Pointing out that since the eruption of the Middle East conflict, on 28 February, the NPP had twice increased fuel prices on 09 and 22 March, Palitha said that the government could have cushioned the impact by lowering taxes imposed on crude oil and refined petroleum products. Instead, the latest price revisions resulted in further increase of customs duties, VAT and Port and Airport Development Levy. Additional duties often apply, such as a surcharge tax, on diesel and petrol.
Since the entry of Lanka IOC into the market in 2003, Sinopec in 2023 and R.M. Parks in 2025 eroded the CPC share and, at the moment, it was down to about 57%, and the private players accounted for the rest. Palitha placed the number of filling stations players authorised to operate at Ceypetco (836), Lanka IOC (274) and Sinopec and R.M. Parks 150 each.
Palitha said Lanka IOC has increased Petrol Octane 95 to Rs. 487 a litre whereas the CPC priced the same at Rs. 455) a litre. Lanka IOC and Ceypetco have priced a litre of Super diesel at Rs. 572 and Rs. 443, respectively.
LIOC has also revised its premium fuel categories, with Xtra Premium Petrol priced at Rs. 465, Xtra Mile at Rs. 551, and Xtra Green Diesel at Rs. 588.
Claiming that the government had twice increased the prices of old petroleum stocks, procured at a maximum USD 70 a barrel, weeks, if not months, before the new war, Palitha found fault with the Opposition for not launching a sustained campaign against the exploitation of the public. Palitha said that the increase of a litre of kerosene by Rs. 13 on 09 March and Rs. 60 on 22 March was unjustifiable. “The people do not know that kerosene is a by-product in the process of refining crude oil. Sapugaskanda produces LPG, naphtha, petrol, diesel, kerosene and furnace oil.”
The price of a litre of kerosene to had been increased to Rs 255, Palitha said, adding that it could have been provided to the needy at a much lower rate. If those who represent Parliament bothered to study the issues at hand, they would be able to challenge the government on this disgraceful manipulation of the entire country, he said.
Palitha said that the Parliament owed an explanation as to why the Commission to regulate the oil trade hadn’t been appointed and whether some interested parties financially benefited at the expense of the country.
Palitha said that the introduction of the QR code to control fuel sales and the increase of the fuel quota last Sunday night had been used to deceive the public when those in power and their friends in the industry made money at the expense of the public.
By Shamindra Ferdinando
Sri Lanka is planning to fast-track the redevelopment of the Trincomalee oil tank farm as a long-term solution to its ongoing energy crisis, with backing from India and the United Arab Emirates, The Hindu has reported.
Foreign Minister Vijitha Herath said the project, which involves restoring World War II-era oil storage facilities in the eastern district, is seen as a “permanent solution” to managing fuel supply challenges.
“Temporary solutions are not sustainable. We need a long-term strategy to deal with oil storage and distribution, given the global energy situation,” he told The Hindu.
The initiative follows a Memorandum of Understanding signed in April 2025 between Sri Lanka, India, and the UAE to develop Trincomalee as a regional energy hub.
Despite previous delays spanning decades, the project has gained renewed urgency amid the current global energy crisis, which has disrupted supply chains and driven up fuel costs.
Sri Lanka has already submitted a concept proposal to its partners, while technical aspects are being reviewed by the Energy Ministry before moving to the tender stage, according to the report.
The renewed push also marks a notable policy shift, as the ruling administration, led by the National People’s Power, had previously opposed Indian involvement in the project.
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