ISSN: 1391 - 0531
Sunday May 4, 2008
Vol. 42 - No 49
Financial Times  

Societies sell rice at higher prices

By Tharindri Rupesinghe

The controlled price for rice mechanism, which has created ripples in the market but benefitted the consumer, works in strange ways however.

Some state agencies it appears, seem to be making an almost unwilling profit from the maximum prices the state has set for rice.
Lak Sathosa, a chain of societies that has close to 70 outlets all over the island was selling rice for lower-than-market prices until the set prices were brought in. The current prices are higher than the ones they were formerly selling rice at.

Although there is no rule to say they can’t sell below the price, a senior official from Lanka Sathosa, the entity which owns the Lak Sathosa chain, told The Sunday Times FT that in the current market environment this has become impossible.

“Unfortunately, in the current situation we can’t sell for anything less than the government’s price. The wholesalers are also jacking up their prices,” he said. “We don’t sell for a cent more than the government price.”

He argues however that the quality of the rice at the store is better than that sold at in the other markets even though the price is the same.

The Sambha rice that is sold at Rs. 70 in the market is now bought by retailers for an average of Rs.68, the head of a traders association revealed. However, according to him, the retailers are buying directly from millers instead of wholesale operations as wholesale traders complain of millers holding back stock from them.

Looking at it, the prices seem to be the only things under control in the boiling pot.


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