Food Shortages - State of Emergency

Sri Lankan government raided private warehouses outside capital Colombo to seize thousands of tonnes of sugar last week. The raids came a day after the country declaring a state of emergency due to food shortages.

Major General Senarath Niwunhella, who was named commissioner-general of essential services told AFP at least 13 000 tonnes of white and brown sugar were found in the raids.¹

“Today we started with sugar and will expand this action to other commodities like wheat flour and rice too if importers do not release their stocks to the market,” he said.

Niwunhella said the objective of the raids is to prevent hoarding, adding that seized stocks will be given to state-owned retail stores to sell for below the open market price.

AFP reported the country is experiencing sharp price rises for rice, onions, and potatoes, while long queues have formed outside stores because of shortages of milk powder, kerosene oil, and cooking gas.

Experts blame the food crisis on a shortage of foreign exchange to import and maintain buffer stocks. 

The country’s foreign reserves plummeted to $2.8 billion by the end of July from $7.5 billion in November 2019.²

The Sri Lankan rupee has lost almost 20% against the US dollar since the economy contracted by a record 3.6% in 2020 due to COVID-19 measures.

References:

¹ Sri Lanka raids sugar stocks as food shortages bite - AFP

² Sri Lanka declares emergency over food, forex crisis - AA

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