Rice prices reach boiling point despite lower import levy

Homemakers are paying Rs 100 for a kilo of rice although import taxes have been reduced and they accuse traders of fleecing them.

A kilo of rice should sell at Rs 70 based on the Rs 15 import levy reduction.

Finance Minister Ravi Karunanayake, said the Special Commodity Levy on imported rice had been further reduced, but it appeared the benefit was not being passed on to consumers. The reduction was applicable to raw red rice, samba and nadu.

Karunanayake said rice was being imported to stop unscrupulous traders from hoarding supplies and driving up prices.

But a kilo of nadu costs Rs 105, while samba has soared to Rs 103 per kilo. White rice and raw red rice also cost more than Rs 100.

Traders claim they are paying high prices for imports.

A rice importer and miller, M S M Zaneer said the government should not control the import prices of rice. He said a kilo of rice costs between Rs 60 and Rs 95 in foreign markets.

Data from Reuters show that in India, price of 5-percent broken parboiled rice dropped by US$2 in the first week of January to between US$341 and US$345 per tonne (Rs 51,074 to Rs 51,674). By mid-January, prices climbed to between US$352 and US$357 per tonne. Around the same time, Thai 5-percent broken rice was quoted at US$380 a tonne, while Vietnamese 5-percent broken rice was quoted at US$335-US$345 a tonne, FOB Saigon, down from US$345-US$350 a tonne.

But on February 2, Indian 5 percent broken parboiled rice increased by US$17 a tonne to US$371-US$376 a tonne.

Importer Zaneer suggested that local millers be granted a concession so they could offer lower prices at retail level.

A large-scale rice importer said cutting taxes alone would not help ease retail prices because it did not have an impact on local varieties, on which millers have a monopoly.

He said importers pay taxes, custom duty and bear shipping and transport expenses.

“There are five major millers controlling the market,’’ he said adding that prices of local varieties must be controlled. He claimed the local millers could provide rice for Rs 66 kilo.

The convener of All-Island Farmers Federation, Namal Karunaratne, said price controls were discussed with the Minster of Rural Economic Affairs P Harrison, but that it was fruitless.

He said the government purchased paddy from the farmer for less than Rs 50.

“There is enough rice to last until April because the 2015 harvest was big and the reduced harvest from previous season is also available,’’ he said.

He claimed rice was being imported to pocket the commissions.

Karunaratne warned that taint- ed rice could enter the market when dubious traders mix imported varieties with local ones.

The Director Of the Consumer Affairs Authority, Chandrika Thilakaratne said a rice price survey is being done. Daily reports are given to the Ministry of Industry and Commerce for policy decisions.

The Secretary of the Ministry of Industry and Commerce, Chinthaka S Lokuhetti, said the first daily report from the consumer authority was received on Friday.

He said discussions have been held to stem sales of rice at high prices.