Overnight Commodity Levy hike and MRP trigger Sugar shortage
By: Staff Writer
Colombo (LNW): In the wake of the finance ministry’s overnight action increase special commodity levy on sugar imports to Rs 50 from 25 cents per kilo, the wholesale sugar price in the Pettah market has gone up to Rs 315 from Rs 250 per kilogram.
Accordingly, retail traders are called upon to sell the Consumer Affairs Authority ordered price control of Rs 275 rupees on white sugar and Rs 330 on brown sugar per kilogram as maximum retail price (MRP).
Importers pointed out that they have no option other than cancelling the future import orders as they are losing Rs 40 per kilo of sugar due to this sudden tax hike.
They have warned that there could be sugar shortages in the country during the Christmas and New Year periods.
The 30,000 MT current stock of sugar is sufficient for only for two weeks as the daily demand is around 2000 MT, several commodity importers disclosed.
Minister of Trade Nalin Fernando has asserted that the necessary measures will be taken to seal all warehouses that do not release sugar stocks.
The Minister noted that such efforts against the recently introduced Maximum Retail Price (MRP) for sugar will not be tolerated.
He further stated that information has also been received that several vendors continue to sell sugar at higher prices than the stipulated MRP, and noted that measures will be taken against such vendors too.
The Consumer Affairs Authority (CAA) on 03 November set an MRP for both white and brown sugar, by way of an Extraordinary Gazette.
Accordingly, packaged and unpackaged brown sugar is sold at Rs. 350/kg and Rs. 330/kg respectively, while packaged and unpackaged white sugar is sold at Rs. 295/kg and Rs. 275/kg, in that respective order.
Sri Lanka’s midnight sugar tax controversy took a new turn Friday with the Trade Minister promising to deploy Consumer Affairs Authority (CAA) officials to monitor the stocks and enforce price controls.
Sri Lanka’s ad-hoc tax policies have created more hardships for consumers as sellers have an undue advantage of choosing either to implement the government’s tax revision immediately or delay it.
When the government raises tax overnight, importers and traders immediately raise the price of existing stocks which were bought at a lower price to raise working capital to import the next stock.
However importers and traders maintain the same price when the government announces tax hike citing that the stocks were bought at a higher price.
“We found out some sugar sellers have been supplying less to the market to get a higher profit,” Trade Minister Nalin Fernando said.