Sri Lanka lifts price control on essential goods to end the black market

The Government of Sri Lanka recently lifted the control prices of several essential items in a bid to put an end to people lining up for hours to purchase goods. Last week, the Government took measures to remove items like wheat flour, milk powder, cement, and LP gas from the list of Specified Goods, paving the way for importers to increase their prices for the local markets. For several months, people have been lining up daily outside state businesses to purchase milk powder, rice, LP gas, and other essential items. In late September 2021, rice mill owners announced the new retail price for rice, following the government’s decision to lift control prices. And this move came after the government declared a state of emergency over the food shortages on August 31st and imposed rationing, forcing farmers to sell their rice to a state agency and seized some from private warehouses, which lead to a shortage of foreign currency caused by a pandemic recession in addition to shortages of food, medicines and other essential items in the island of 21 million people. Central bank Governor Nivard Cabraal stated that he had authorized $50 million to get the release of containers of milk powder blocked in Colombo port for the past three months. As soon as the control prices were lifted, Milk Powder importers were first to increase their prices.