Sri Lanka will pursue two credit lines – one from India for US $ one billion and another from Australia for US $ 200 million to buy essential food items to ensure availability of supplies for the upcoming National New Year and the following months, the Sunday Times reported based on Cabinet Minister.
The Treasury’s External Resources Department would negotiate the two credit lines from which the Government would be able to buy rice, dhal, medicines and other essentials.
“The two credit lines will be sufficient for the imports of essentials for about six months,” he said.
The Credit line from Australia was mainly to buy lentils and barley and the rest could be used for other essentials while the Indian Credit line would cover imports of onions, potatoes, dhal and medicines.
The Minister said that Sri Lanka would seek the two credit lines to be made available in installments to meet the requirements each month.
The Minister said the Government was hopeful that China too would agree to a request for a grant of providing one million metric tonnes of rice which would be brought in stages.
The Government’s request has been conveyed to China.
A Trade Ministry spokesman said during the upcoming visit of Foreign minister G.L.Peiris to India, the issue of the Indian credit line would be taken up.
However the Essential Food Importers’ Association (EFIA) yesterday warned that a risk of a shortage of essential food items in the coming weeks would continue due to more than 1500 container loads being stuck at the Colombo Port owing to the dollar shortage.
“The dollar crisis has resulted in these containers being held up at the port for the past two months. They contain many essential food items including rice, dhal, sugar, sprats and onions, EFIA President Priyantha Seneviratne told.
The failure to pay suppliers on time has resulted in them losing confidence in Sri Lanka and the failure by the Treasury to release the dollars to clear these containers was likely to result in a shortage of essential food items soon, Mr Seneviratne warned.
The EFIA has sought meetings with Finance Minister Basil Rajapaksa and President’s Secretary Gamini Senarath to discuss the crisis. Neither has so far granted a meeting, according to Mr Seneviratne.
Importers have also warned that continued delay in releasing the dollars to clear their shipments would result in the increase of prices of these food items as demurrage charges rise. The EFIA has already conveyed to the Government that importers are not prepared to take responsibility for this as it is the fault of the Treasury for failing to release the required dollars on time.
Meanwhile, eight container loads of printing material imported for the Department of Government Printing are also currently stuck at the port owing to a lack of dollars.
Government Printer Gangani Liyanage told the Sunday Times that a local agent had imported the material and the Treasury would have to find a way to get the items cleared.