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ECONOMYNEXT – Sri Lanka’s bakers and confectionery makers want the government to impose controls on their suppliers such as egg farmers, after the central bank printed money, despite the emergence of blackmarkets and collapse of supply due to such action in the recent past.
“We are asking the government to intervene and impose price controls to reduce the prices of flour, eggs and margarine,” NK Jayawardena Head of All Ceylon Bakery Owner’s Association (ACBOA) told EconomyNext.
“If the government would intervene and levy measures to control abnormal price increments, it would enable sellers to pass on the benefits to consumers.”
According to Jayawardena the price of bread and a bun could be brought down by at least 25 to 50 rupees if the government intervenes.
Jayawardene did not call for price controls on his own industry only on suppliers. Price control in the recent past have led to shortages and blackmarkets.
Jayawardene’s solution could lead eggs going off the shelves, killing of more layer chicken prematurely for meat and leaving many other sectors such as restaurants and even ordinary consumers without eggs.
Higher egg prices on the other hand is an automatic clearing price which matches demand and supply and will eventually drive up supply.
Jayawardene did not call for price controls on their own industry.
The price of a loaf of bread ranges between 195 rupees to 250 rupees.
Egg is sold between 65-70 rupees while flour per kg is 310 rupees.
Egg prices have sharply risen after a shortage in animal feed, the price of an egg has increased by 250 percent compared to eggs since October 2021.
Related – Sri Lanka chicken, egg prices soar due to demand spike, animal feed shortage
The association members also want the government to import eggs as the local prices have hit the roofs due to expensive feed costs.
Jayawardena said, “There is no stability in the industry, flour prices are increasing every day and cooking fat prices are exceeding the reach of the industry.”
In South India, eggs retail at lower rates compared to Sri Lanka, thus he encourages the government to import from overseas to bring the costs down.
The association has submitted a written proposal in this regard to the Ministry of Trade, as per Jayawardena Head of All Ceylon Bakery Owner’s Association (ACBOA).
“The economic crisis has resulted in each cost of production increased by more than 200%, the entire industry is on survival instinct,” SD Suriyakumara, President of the Lanka Confectionery Manufacturers Association (LCMA), told EconomyNext.
Sri Lanka’s food inflation has skyrocketed to 90.9% and bakeries, confectioneries and eateries are increasingly finding it difficult to curtail costs and bare up revenue.
Suriyakumara said that the prices of flour have been adjusted 11 times so far this year, while retail prices of eggs and margarine are abnormally increasing and expenditure has reached a high magnitude with packaging expenditure alongside electricity tariffs that were made effective from Wednesday (10).
Sri Lanka’s Trade and Food Security Minister Nalin Fernando has also announced that they will use 20 million US dollars from a billion US dollar credit line from India to import maize to make animal feed. (Colombo/Aug14/2022)
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