Business
Rising food prices are Sri Lankans’ biggest worry
By Sanath Nanayakkare
A middle class mother walked into a grocery shop in Mattegoda yesterday with her two school-going children and asked for two chocolate flavoured milk packets, one packet of Tipi Tip, a medium sized canned fish and 500g of dhal and paid Rs. 1,559 for the damage without batting an eyelid. It was evident that she was too aware of the latest World Bank assessment which places Sri Lanka at No.5 among countries hardest hit by food price inflation.
As her kids start drinking the milk, she looked around with grave concern and anxiously said,” Will these increasing food prices ever drop? In our country, prices go up but never come down.”
Renuka Samantha Kumara and his wife Nilanthi Kuruppu – the owners of the retail outlet replied, “We can’t give you a straight answer on when food prices will come down, but prices have to come down soon because customers aren’t able to pay high grocery bills and traders also can’t pay suppliers’ eye-popping bill amounts. Customers see stars when they are told how much their bill comes to, and we’re shocked when our suppliers hand us the invoice for stock replenishments. So both consumers and traders are equally left wondering when the prices are going to come down.”
Later the family traders speaking to The Island said, “In our view, food prices have to go down by 40-50% in the near term for low and middle income households if they are to survive. Our customers fall into these two categories and they have no savings to dip into. What they do is cut down, cut down and cut down on their purchases. Our customers from low-income households have almost disappeared. Employees of the State sector and permanent employees of the private sector still have some capacity to buy at least part of what they used to buy before the high inflation hit. Some of them have told us that they can’t do anything else with their money but pay for food and monthly utility bills. Sad to say that daily wage earners who get only 2-3 days of work per week don’t show up to buy anything. We don’t know what they are eating.”
“Today we bought eggs at the price of Rs. 52 each and sell at Rs. 54 with a Rs. 2 margin, so we have to sell 52 eggs to earn the profit to take home two eggs for consumption without losing the capital we invested on eggs. These days customers avoid eggs like the plague because of its all-time high price, so we don’t know how long it will take to sell 52 eggs. Prices of fresh vegetables, fruits and discretional items such as biscuits, ice-cream, soap, toothpaste have hit through the roof and out of reach of the customers. Both consumers and shopkeepers are trading down because of unbearable price points. If there’s another wave of food price hikes due to increased fuel prices, rupee depreciation, supply chain disruptions, or some policy decision on the Pettah Market, consumers won’t be able to patronize our shop at all, and that will deal a great blow to our business. The government says that it will provide relief to low-income earners at the forthcoming budget to cushion against such vulnerabilities. That will be fine as an immediate option, but it will only be a stopgap to the problem. We believe that the real ‘social safety net ‘needs to come through private sector investments, a boom in infrastructure spending and a growing economy that works better for everybody from top to bottom. The government should give the vulnerable sections a fishing rod and not a fish,” they said.
The latest Purchasing Managers’ Index (PMI) from the Central Bank suggests Sri Lanka’s economy is beginning to find its feet after a severe crisis, revealing tentative signs of hope in factories and business activity. It indicates the deepest economic pain may be over. With prices rising more slowly, families and companies are getting some much-needed relief.
The Island spoke to an independent analyst for an outside perspective. Elaborating on the report, he struck a cautious note: “Yes, the PMI sounds favourable. But no one should think the hard times are completely behind us. The road to recovery is long and full of potholes.”
“While we can hope for slow, steady improvement in coming months, major problems remain,” he continued. “The country’s massive debt is a heavy burden. Staying on track with the IMF programme requires sticking to tough reforms, which won’t be easy. Global economic uncertainty also affects our exports and even other forms of external support.”
“In short, the next phase won’t be a quick boom. It will be a time for careful repair. These small improvements are like young seedlings – they need constant care, sound policy, and continued external support to grow strong. Our task is to turn this shaky stability into a solid foundation for lasting, inclusive growth. The economy is out of emergency care, but full recovery will be a long and patient journey,” he concluded.
When asked if the current political landscape would aid recovery, he pointed to the present stability as a key advantage. “With political stability in place, the path for necessary reforms and recovery should be more navigable now than ever in the past,” he said.
By Sanath Nanayakkare
Sri Lanka Insurance Life Ltd and Sri Lanka Insurance General Ltd inaugurated their business operations for the year 2026 on 1st January at the Sri Lanka Insurance Head Office. The event was graced by the Chairman, Board members, Corporate Management, and staff of SLIC.
Parallel business launches were also conducted at branch level, with branch staff joining the head office proceedings via live stream. The day’s programme commenced with blessings observed from the four major religious faiths, symbolising unity and goodwill for the year ahead
Heralding the dawn of the New Year, SLIC brought together all 142 branches in a cohesive celebration, uniting as one family to light the traditional oil lamp. During the celebrations, the theme for SLICGL for 2026 ‘Leading the market, strengthening every step’ was officially unveiled
Celebrating 64 years of service and expertise, SLIC continues to stand as Sri Lanka’s most respected and trusted name in insurance. Over the decades, the organisation has remained at the forefront of the sector, sustaining industry‑wide growth and equity even through testing times.
The year 2025 brought many meaningful and positive achievements for SLICGL, yet it concluded with significant challenges as the nation faced the aftermath of the devastating Cyclone Ditwah. Rising to the occasion, SLICGL honoured claims and delivered timely relief, offering protection and reassurance to communities impacted by the catastrophe.
SLICGL proudly reflects on a year of remarkable achievements in 2025. The organisation was ranked
Sri Lanka’s highest-rated insurance brand as the only A+ Fitch rated insurer in the country and became the first and only insurer to surpass Rs. 30 billion in Gross Written Premium. SLICGL secured Carbon Neutral Certification, highlighting a commitment to sustainability. SLICL was also recognised as the Most Valuable General Insurance Brand by Brand Finance.
The lifting of the vehicle import ban in January 2025 helped to revitalize the automotive sector and also reaffirmed SLICGL’s role as the nation’s most trusted insurer. Stepping in to protect new vehicle owners, SLICGL strengthened its portfolio, supported national growth, and supported families and businesses to move forward with confidence.
During 2025, SLICGL continued its partnership with the Ministry of Education on the Suraksha Insurance Scheme, a national initiative aimed at securing the health and wellbeing 4.5 million schoolchildren throughout the country. The partnership provides students regardless of background, access to essential insurance coverage, safeguarding health, supporting families, and strengthening the nation’s future.
SLIGL’s mission places customers at the heart of everything it does. The organisation continues in the commitment of meeting and exceeding customer expectations through its expertise and specialised services. Aligning business strategies with this vision, SLIC delivers a superior customer experience through all touchpoints.
The Milk Industries of Lanka Company (MILCO) has recorded the highest profit and sales revenue in its history, driven by strong performance under the flagship Highlands brand, Agriculture Minister Lal Kantha said.
Addressing a Performance Incentive Awards Ceremony held at the MILCO Head Office in Narahenpita on December 31, the Minister said the achievement marked a decisive turnaround for the state-owned dairy enterprise, which had earlier been prepared for divestment.
“When we assumed office, MILCO was being readied for sale. Today, we have been able to rescue it and transform it into a profitable institution,” Minister Lal Kantha said. “By October 2025, the company had generated profits amounting to Rs. 1,490 million, the highest profit ever recorded in MILCO’s history.”
He noted that 2025 has also become the year with the highest sales revenue since the company’s establishment, reflecting improved operational efficiency, renewed consumer confidence and stronger market penetration under the Highlands brand.
The Minister said the government intends to ensure that the gains from the company’s financial recovery are shared across the value chain. “A portion of the profits will be distributed as incentives among dairy farmers,” he said, adding that plans are also in place to provide free life insurance coverage to 15,000 dairy farmers in 2026.
The incentive awards ceremony was organised to recognise employees who played a key role in achieving record sales targets and historic profitability, with senior management highlighting improvements in production planning, supply chain management and farmer engagement.
Minister Lal Kantha paid tribute to the dedication of the MILCO workforce, stating that the turnaround was the result of collective effort.
“This achievement belongs to everyone who worked tirelessly to restore confidence in this institution. I extend my sincere appreciation to all those who contributed to this success,” he said.
MILCO’s performance in 2025 is being viewed as a benchmark for the revival of state-owned enterprises, particularly within Sri Lanka’s agri-based industrial sector.
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