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| Thursday, 06 January 2005 |
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Govt to import flour from next week - Jeyaraj Fernandopulle by Shirajiv Sirimane There is an artificial flour scarcity created by Prima Lanka and to overcome this situation the Ministry would import flour from next week said Minister of Trade and Consumer Affairs, Jeyaraj Fernandopulle. "This is not because of the tsunami. This is a 'Prima tsunami'," he said. He told a meeting of bakery owners of the Western Province at the Ministry on Tuesday that by the end of February the Cooperative Wholesale Establishment (CWE) would supply 50 percent of the local demand for flour. The Minister said that with the price of a kilo of rice increasing the demand for flour has gone up by almost 40 percent. The annual demand of flour in Sri Lanka is around 50,000 metric tonnes and by the end of February the Ministry would import over 25,000 tonnes. As per the agreement signed by the previous government with the Prima management last January the government pays a subsidy of Rs. 7 50 per kilo of flour sold by Prima to compensate for the high world price of flour. This subsidy was not paid for the last few months and the Prima management is demanding that the government pays them Rs. 5,000 million. The Prima factory was given to the Prima management for Rs. 65 million in 1999 and according to some of the clauses the government has to charge a tax of over 40 percent if any other person is importing flour. "I have decided to ignore this and would import flour tax free. The first shipment of 2,000 tonnes would arrive by the end of this week," he said. The flour would be then distributed from the CWE at the D. R. Wijewardene outlet first to bakery owners and then to the public at less than the present market price. He said that the biggest advantage of the import of flour would be that the government does not have to pay the subsidy of Rs. 7 50 for each kilo which has to be paid to Prima. The Ministry would not make any profit from these shipments but would only cover their costs. "I do not like to allow a third party to import flour since they too would keep a profit margin," he said. The Minister also said that when the news of flour imports are spread, hidden stocks would emerge. All hidden stocks of flour would be confiscated. The privatisation of the CWE by the previous government has created major problems for consumers. "If we owned the CWE retail operations we would have done wonders," he said. He said he would not divulge the country of origin of the shipment due to security concerns. "I fear that some one may sabotage it," he said. He said he would submit a cabinet paper next month to suspend the subsidy paid to Prima in the future. |
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