Sri Lanka has decided to remove strict controls on rice prices, allowing traders to make the decision, a move taken because the country was on the brink of a shortage of the staple food, officials said on Tuesday.
The move came after government attempts using emergency regulations failed to get traders to release paddy and rice stocks into the market, despite a move to appoint a top military officer with the powers to raid storage sites and force the sale at government-set prices.
“We have decided to release the price control to avoid any shortage in the markets,” Minister of Consumer Protection Lasantha Alagiyawanna said on Tuesday.
The government also has decided to import 100,000 metric tons of rice to avoid any possible shortages, he said.
Hours after the price controls were withdrawn, traders increased prices by a minimum of 20 US cents per kilogram.
The government earlier this month increased the fine on traders selling rice at higher prices than those stipulated by the state. Accordingly, a fine of 20,000 rupees (100 dollars) was increased to 1 million rupees for individual traders, while companies violating the law saw fines leap from 200,000 rupees to 10 million rupees.
Though the fines remain by law, there is now no maximum sale prices for rice.
A government decision to ban the import of chemical fertilizer from May has also affected this year’s paddy harvest.