Sri Lankans buying sugar at record prices, despite sufficient stocks available until 2022

COLOMBO (News 1st); The retail price of a Kilo of Sugar is currently over Rs. 200/-, forcing consumers to purchase Sugar at the highest price ever recorded in history.

Sri Lanka's annual Sugar consumption is around 50 million metric tonnes.

However, only 100 metric tonnes of Brown Sugar is manufactured in the country to meet this mammoth demand with the deficit being imported.

The Government itself has conceded that the control of sugar imports is divided among 12 business entities.

On the 13th of October 2020, these businesses gained an advantage when the government decided to drop the import tax per kilogram of sugar from Rs. 50/- to 25 cents.

Activist Pubudu Jagoda, from the Frontline Socialists Party, told reporters that reducing the tax itself reveals malpractice as it did not have any effect on the sugar prices.

"The price of sugar did not reduce but kept on rising. Further, the Government lost a substantial amount in tax revenue. Since the tax was slashed after Sugar had been imported at a higher price, Sathosa suffered great losses trying to offer Sugar at the maximum price of 85 Rupees," he added.

It must be noted that Import licenses for importing sugar were suspended effective from the 22nd of May.

Pubudu Jagoda noted that 90,000 metric tonnes of Sugar was stored in Sri Lanka and therefore the prices of Sugar in the local market couldn't have fluctuated even if it did in the global market.

According to available data, current stocks of Sugar are sufficient to meet the local market's demand until the month of May next year.

Hence, a shortage of Sugar does not exist.

Thushan Gunawardena, the Executive Director of the Consumer Affairs Authority said that the temporary ban imposed on Sugar imports can be viewed as a factor giving rise to the rise in sugar prices.

Traders are releasing stocks of Sugar that were stored prior to that ban, he added.

"CAA has revoked the Gazette issued with regards to Sugar. The price of Sugar is not regulated at present," he confirmed.

On the contrary, the State Minister of Consumer Protection Lasantha Alagiyawanna

said the law in place at present does not support our cause of resolving this crisis.

He said a proposal has been tabled in Parliament to increase fines and amendments are being made after 18 years

It was revealed at the Committee on Public Finance that the Sugar Scam had cost the Government 15 Billion Rupees worth of revenue.

By now, such stocks of Sugar are being sold to consumers at augmented rates.