Govt. Allows Rice Exports In Small Doses
The Government has rescinded its blanket ruling of disallowing rice exports on account of the prevailing drought that is expected to affect the current Yala harvest.
Previously the Government banned rice exports fearing that there would be shortage on account of the current drought. However Agriculture Minister Mahinda Yapa Abeywardena speaking at a function in Colombo on Sunday said that the drought is expected to shave off between 10-20% of the Yala harvest which is not unusual.
The drought has had affected the North Central Province (including Mahaweli H located in the Anuradhapura District) and the Kurunegala District, according to sources. However Ampara, where harvest is expected to begin by the month end is envisaged to give a good Yala harvest.
Prior to the drought, the Yala harvest was estimated at 1.7 million metric tons (mt) of paddy.
He however told this reporter that bulk exports would be disallowed. State owned Paddy Marketing Board (PMB) was planning to export some 160,000 metric tons (mts) of rice, Abeywardena added. Those will be banned.
However a small entrepreneurial export class has been created because of the Government’s previous encouragement to export rice.” They export some 1-2 mts of rice at a time, they would be allowed to continue with their operations,” said Abeywardena. Local rice, in export markets is mainly eaten by the Sri Lankan diaspora and does not necessarily appeal to other palates. Therefore there is very little export demand for local rice varieties. This year’s Maha harvest was a record 2.8 million mts (see The Sunday Leader business pages of 6.5.12.).
Meanwhile PMB Chairman K.P. Jayasinghe said that they will honour export commitments already made where letters of credit have had already been opened. Those will amount to about 20-25,000 mts where PMB’s liabilities will end therewith, he said. An export of 10,000 mts is due to Saudi Arabia, he added. There is a large sri Lankan expatriate population in Saudi.
PMB has some 200,000 mts of paddy in their godowns, while the country consumes some 300,000 mts of paddy monthly (300,000 mts of paddy=200,000 mts of rice).
Jayasinghe further said that around 80% of the paddy already harvested is with the private sector and a greater part of the balance with the farmers. He was unaware how much of rice would go bad due to storage problems with most of the warehouses where rice used to be stored having had been privatized.
Jayasinghe in The Sunday Leader business pages of 6.5.12. is reported to have had said that on a rule of thumb some 15% of paddy is subjected to post harvest losses.
- Drought Has Last laugh
Central Bank of Sri Lanka in its 2011 Annual Report said that the Government to facilitate the concept of a rice exporting economy saw Budget 2012 suggesting to grant tax concessions for the establishment of modern rice processing mills in proposed rice export zones in Southern, Eastern, North Central and Northern provinces. The Budget also proposed to provide assistance to promote inter-cropping of cinnamon, pepper, cardamom and cocoa, it added.
