The imposition of a price cap on the retail price of rice has triggered rice struggles in Sri Lanka, which has intensified the black market situation in the country.
Government imposed Price cap in December 2024
In December 2024, the Sri Lankan govt. has imposed a price cap on the varieties of rice such as Nadu Rice for 230 rupees per kg, Samba Rice for 240 Rs per kg and Keeri Samba Rice 260 Rs. Per kg. This move aims to protect poor people from high rice prices, especially during shortages and when suppliers hoard the rice.
However, the imposition of price cap on the varieties of rice has triggered significant problems such as shortages, since adequate rice is not available in the shops as sellers couldn’t make enough profit at the already set rice prices. Black marketing is also one of the significant problems since official shops ran out of stock, people started selling rice at higher prices. Not only this, several rice millers couldn’t sell at those low prices, therefore they have to shut down or reduce their production. Even Farmers are grappling a lot in this crisis as Millers are not purchasing properly, decreasing their earnings. Consequently, only large producers survived the loss, whereas small businesses suffered.
Solutions suggested by the experts
According to the experts, the system needs better solutions, like improving farming (to grow more rice), investing in storage and transport, and letting the market work more freely. In addition, it is difficult for the government to check shops in the country, ensuring the following of price cap rules, as some shops are following and some do not, creating confusion and unfairness.