As cost of living soars, people eating less or switching to cheaper and less nutritious food: FAO

Sri Lanka's vulnerable households have apparently reduced their food consumption or switched to comparatively cheaper but less nutritious foods, with an overall negative effect on their food security, health and nutrition status, an update from a UN agency said.

Issuing a Global Information and Early

Warning System (GIEWS) update on January 26, the United Nations' Food and Agriculture Organisation (FAO) said that as rice, wheat and sugar products account for about 40, 12 and 10 percent respectively of the average calories intake, many families had reduced their food consumption due to skyrocketing inflation owing to the rupee's depreciation coupled with the fertiliser crisis and a fuel shortage.

Prices of rice, the country’s main staple food, surged in most markets between

September and November last year. However, after being quite stable in December, prices began to increase

significantly in January, reaching new record highs, more than 50 percent above their year-earlier levels, the update noted.

Price increases were underpinned by the depreciation of the rupee and concerns over the production of ongoing harvest of the “Maha” season mainly due to shortages of fuel and fertiliser. “Similarly, prices of a wide range of imported basic food items, including wheat flour, sugar, dried milk and pulses h av e increased since last September and reached, in many cases, high levels in January.”

Noting government attempts to improve the availability of basic foods, mainly rice and sugar, in domestic markets and limit their price increases worked briefly last year, the report found further depreciation of the rupee since October last year offset the impact of these measures, immediately triggering further price increases.

“As a response, the Government decided to import 100,000 tonnes of rice in late September, followed by 300,000 tonnes in early January, the largest imported amount since 2017 when domestic production was decimated by a severe drought,” the report noted.

High prices of agricultural inputs, including fuel and fertiliser, are likely to result in their reduced application, with a negative impact on yields of the main season crop. Production costs are also anticipated to rise, adding upward pressure on the already high cereal prices, the report said.