Sri Lanka’s essential food importers are still waiting for money from the Indian credit lines, and industry officials said as banks were short of dollars due to money printing and high domestic credit.

The  country is facing a shortage of essential commodities such as Rice, Sugar, Dhall, Chickpeas, Coriander etc as imported stocks are stuck in the Port of Colombo  for not being able to clear it in the current foreign exchange crisis, commodity importers complained. 

They noted that Port rent and container demurrages are being accumulating on a daily basis (in some instances the cost per Kg was Rs 35-40), they pointed out.

Members of the Essential Food Commodities Importers and Traders Association have also imported and distributed food items such as Dhall and Rice on “Suppliers Credit” (DA terms) which are overdue for settlement and some suppliers requesting for payment..

This issue has been brought to the notice of the President in a letter dated March 1 2022, P.M. Abeysekera, consultant of Essential Food Commodities Importers and Traders Association  disclosed. 

He added that there was a serious threat for food security in the country as most suppliers are reluctant to ship goods to Sri Lanka unless paid in advance.

“Several rounds of discussion have been held with the Trade Ministry,” Essential Food Importers and Traders Association (EFITA) Spokesperson Nihal Seneviratne said, adding that “They are trying but so far no money has come.”

The Association represents about 90 percent of the essential food importers of the country, he told reporters earlier in April at a forum of joint chambers.

Sri Lanka needs 200 million dollars a month for food imports, he said. After 1978 almost all the foods are imported to the country by the private sector.

Other than milk powder most items were available up to now though prices are rising, he said.

Food importers had brought goods to feed the people on credit since banks were not giving enough dollars and many companies were in trouble after the rupee fell in March in a botched float.

“The suppliers just trust us and send the goods to Sri Lanka (without LCs),” Senevirtne said. “That has been hampered for the last six months and there is a problem of continued supply.”

He said suppliers are reluctant to ship and are asking for money upfront.

“We can do it up to a certain extent. But there is a crisis. Other than milk powder we have managed to bring food.”

He said firms which imported goods under credit were facing massive losses after the rupee fell in March.

“Some will even bring under credit terms. What we brought under credit terms, has already been sold, calculating the dollar at 203 rupees.

“Now importers are faced with 50 million dollars (of supplies credit) which we have already sold. So they are facing bankruptcy.”

Amidst growing protests and a shortage of fuel, the Joint Chambers of Commerce and Industry has urged President Gotabaya Rajapaksa to immediately initiate legislative action to repeal the 20th amendment to the Constitution.

“The Joint Chambers urge Your Excellency, as President, to immediately initiate legislative action to repeal the 20th amendment to the constitution which contributed to the present situation.

This will be viewed as a historic positive development for this country both from a political and economic perspective,” it said in a letter to the President on Tuesday.

They noted that it was concerned that the current political deadlock coupled with growing public unrest could potentially derail the actions being taken to resolve the serious economic crisis faced by the country.

The absence of political stability could significantly disrupt the successful and speedy completion of initiatives taken thus far, the letter said.

The chambers were confident the repeal of the 20th amendment will ensure a better balance of power between the Executive and the Legislature along with the reintroduction of the Constitutional Council and other independent Commissions that will lead to a more acceptable political framework that could help resolve the current impasse.

Meanwhile several companies issued statements this week on the public unrest in the country with some supporting the protests and a regime change.

Hemas Group said it ‘continues’ to support the people in its demand for systemic change. “We call upon our nation’s leaders to hear the cry of the people and come together to immediately undertake the necessary political reforms and set our country on the right path.

It should be based on the principles of good governance, free of corruption and ethnic divisions,” it said in a statement. It said it was supporting the rights of their staff to freely express themselves in a non-violent manner.

MAS Holdings said: “As a responsible organisation, we unconditionally support the call for change and good governance, and earnestly request the nation’s leaders to heed the voice of the people and act on it, whilst respecting legal and Constitutional due process.”

The statement added that given the ensuing events, MAS reiterates the need for immediate and decisive action to resolve the current economic and social crisis, in a peaceful and sustainable manner.