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Country Briefs

  Sri Lanka

Reference Date: 02-June-2020

FOOD SECURITY SNAPSHOT

  1. Paddy crop production in 2020 forecast at above‑average level

  2. Cereal import requirements in 2020 forecast below five‑year average

  3. Domestic prices of rice well above year earlier levels in March

Paddy crop production in 2020 forecast at above‑average level

Harvesting of the 2020 main “Maha” paddy crop was completed in March and farmers are currently planting the 2020 secondary “Yala” crop, for harvest in August and September. The “Maha” production is officially estimated at 3.1 million tonnes, 23 percent above the previous five‑year average. Remunerative prices and Government support, in the form of free irrigation water supplies and fertilizer subsidies, ensured well above‑average plantings, while generally favourable weather conditions prevailed. Similarly, production prospects for the 2020 secondary “Yala” crop are generally favourable. Seasonal weather forecasts for the May‑July 2020 period indicate a higher likelihood of average to above‑average rainfall over most of the country. Overall, the 2020 aggregate paddy output is forecast at a well above‑average level of 4.7 million tonnes.

Harvesting of the 2020 main “Maha” maize crop finalized in March and production is officially estimated at a record of 310 000 tonnes. This is the result of the high level of plantings, driven by strong demand from the feed industry and above‑average yields supported by generally favourable weather conditions. Assuming an average output of the ongoing secondary “Yala” maize crop, the aggregate 2020 maize production is forecast at 335 000 tonnes, about 40 percent above the five‑year average.

Cereal import requirements in 2020 forecast below five‑year average

In the 2020 calendar year, import requirements of wheat, which is not produced in the country and accounts for the largest share of imports, are forecast at 1.1 million tonnes, close to the five‑year average. Similarly, import requirements of maize are expected to remain at an average level of 100 000 tonnes. By contrast, imports of rice are forecast at 10 000 tonnes, reflecting the near‑record output expected in 2020. Overall, cereal import requirements in the 2020 calendar year are estimated at 1.25 million tonnes, about 20 percent below the average.

Domestic prices of rice well above year‑earlier levels in March

Prices of rice increased steadily between August 2019 and January 2020, supported mostly by low imports. Subsequently, prices decreased in February and March with the onset of the 2020 main “Maha” season crop, which improved market availabilities. Prices, however, in March remained about 20 percent above their year‑earlier levels.

On 10 April 2020, the State‑run Consumer Affairs Authority (CAA) announced the new Maximum Retail Prices (MRP) for rice that entered into force with immediate effect. MRPs are set by the Government to protect consumers from food price hikes. The MRPs have been set as follows: LKR 85 per kg for raw rice, LKR 90 per kg for Nadu and Samba rice and LKR 125 per kg for Keeri Samba. Control prices for vegetables were also set on 27 March 2020.

Prices of imported wheat flour remained steady between January and March 2020 and were, as of March 2020, slightly below their year‑earlier levels reflecting adequate availabilities from imports.

COVID-19 and measures adopted by the Government

As a measure to contain the spread of COVID‑19, the Government imposed restrictions on international and domestic travels, prohibited large gatherings of people and closed schools and universities. In addition, all international incoming vessels and planes have been suspended, except for cargo and humanitarian shipments. Only economic activities deemed essential were permitted to operate, including the food supply chain. Nevertheless, permits were required in order to be allowed to transport food. As some disruptions to agricultural operations have been reported, the Government took measures to assist actors across the sector in order to enable domestic production and commercialization of food as well as the work of export activities.

The Government has also implemented some measures to ease the economic burden on households during the lockdown, including the establishment of price ceilings on essential food items as well as the provision of concessional loans and food allowances to low‑income consumers. Market surveillance and monitoring activities have been strengthened in order to limit the potential overpricing of food products. Furthermore, special credit schemes and rescheduling of loan payments are being implemented.

The country relies on imports of horticultural foods, such as onions, lentils, legumes and dried chilies, to cover the domestic demand. As export restrictions of food in the country’s main suppliers may be enforced due to the COVID‑19 pandemic, the Government has been implementing measures to increase the area planted of these food items.

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