Oil price increase :

‘No dramatic price increase in primal commodities’

Chamikara Weerasinghe

Co-operatives and Internal Trade Minister Johnston Fernando yesterday said they do not expect any sudden increase in prices of basic commodities although oil prices are sky-rocketing worldwide.

Minister Fernando said, although international oil price revisions can affect every area of trade both internal and external, Sri Lanka is prepared to face situations that would have negative macroeconomic effects, due to trade and political activities in the international sphere.

“The current explosion in oil prices is a situation that can have an adverse effect on many economies,” he explained.

Asked to explain the reasons for his confidence that there will be no dramatic rise in the prices of commodities, such as, rice and vegetables, Fernando said, the country has enough rice and vegetables in its reserves.

Admitting that a price increase in crude oil can have a direct influence on transport costs of commodities, the minister said, “even though, this can affect the prices in terms of costs involved in transport, we can still manage the situation since we have buffer stocks of these agricultural goods,” he said.

“There is no chance of things getting out of hand,” he added.

“Production of rice and vegetables in excess helped us overcome the problems even when the rupee was being devalued in the past,“ he explained. The country’s agriculture sector has been led to produce more than the country’s demand under the guidelines for food security in the Mahinda Chinthana over the past years, he pointed out.

“The country produces rice and vegetables more than the demand as at present. We do not expect a dramatic increase in prices of primal goods, such as, rice and vegetables due to the oil price increase in the international market,” he said.