Im­porters of es­sen­tial goods seek govt. help to re­pay loans af­ter bomb at­tacks

„Re­quest for reschedul­ing of ex­it­ing loans „One-year mora­to­rium on cap­i­tal and in­ter­est on all ex­ist­ing debt „Con­ces­sion­ary terms on work­ing cap­i­tal re­quire­ments

Daily Mirror (Sri Lanka) - - MIRROR BUSINESS -

The es­sen­tial food and com­modi­ties’ im­porters have writ­ten to the govern­ment re­quest­ing im­me­di­ate as­sis­tance, as the cur­rent se­cu­rity sit­u­a­tion in the coun­try in the af­ter­math of the Easter Sun­day bomb­ings has se­verely dented the ca­pac­ity to ser­vice their loans.

In a let­ter ad­dressed to Prime Min­is­ter Ranil Wick­remesinghe, the im­porters have asked for re-sched­ul­ing of ex­ist­ing loans, one-year mora­to­rium on cap­i­tal and in­ter­est on all ex­ist­ing debt and con­ces­sion­ary terms on work­ing cap­i­tal re­quire­ments.

The Es­sen­tial Food and

Com­modi­ties’ Im­porters and Traders As­so­ci­a­tion said they com­mand over 85 per­cent of the to­tal es­sen­tial food and com­modi­ties im­por­ta­tion to the coun­try with an an­nual im­port bill of US$ 1.2 bil­lion.

“Cur­rently we as im­porters and traders are ex­pe­ri­enc­ing an un­prece­dented sit­u­a­tion where our ex­ist­ing debt has risen due to the re­cent se­cu­rity sit­u­a­tion in the coun­try.

“Any fur­ther tol­er­ance may not be pos­si­ble, as on the one hand our obli­ga­tion to the State to meet the es­sen­tial food de­mand of the coun­try is af­fected, whilst our own ex­po­sure to the is­sues con­fronting us fi­nan­cially threat­ens our own ex­is­tence,” the let­ter read.

The food and com­modi­ties items im­ported by th­ese im­porters, such as rice, sugar, dhal, onions, gar­lic, co­rian­der, milk pow­der, chilies, canned and dry fish, di­rectly rep­re­sent the coun­try’s cost of liv­ing (COL) in­dex mea­sure­ment and COL food bas­ket.

The im­porters said their fi­nan­cial sit­u­a­tion has been on the de­cline due to price con­trols im­posed by the govern­ment on cer­tain im­ported es­sen­tial food and com­modi­ties and the sig­nif­i­cant de­pre­ci­a­tion of the ru­pee against the US dol­lar.

Sri Lanka’s ru­pee de­pre­ci­ated al­most 20 per­cent in 2018, al­though it ap­pre­ci­ated about 4 per­cent in the first three and a half months of 2019 be­fore de­pre­ci­at­ing again af­ter the Easter Sun­day bomb at­tack on April 21.

“Dur­ing the last three years, the forex move­ment in the coun­try had an un­prece­dented in­crease from a mere Rs.130 to a US dol­lar end­ing up over Rs. 182 to a US dol­lar.

Our debts swelled as im­port val­ues got fur­ther en­hanced in the ru­pee con­ver­sion against the pro­gres­sive rise in the par­ity rate be­tween the US dol­lar and that of the Sri Lankan ru­pee,” the let­ter noted.

It fur­ther said that the mem­ber­ship of their As­so­ci­a­tion sup­plies to 240, 000 deal­ers scat­tered across the coun­try and pays US $ 600 mil­lion as cus­toms duty to the govern­ment as all of their im­ports are du­tiable.

“Since we are cur­rently bur­dened with our ser­vic­ing ca­pa­bil­i­ties with our banks, we seek the govern­ment’s im­me­di­ate in­ter­ven­tion to bring about fea­si­ble so­lu­tions to re­tain our role as per­formed tra­di­tion­ally in the past.

“The cur­rent en­vi­ron­ment has com­pelled us to seek as­sis­tance to pre­vent any fur­ther de­te­ri­o­ra­tion of the pre­vail­ing con­di­tions,” the let­ter read.

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