Sri Lanka President Ranil Wickremesinghe has allowed maize and soybean imports on open account terms for poultry feed producers while the time given to import other foods on similar terms was also extended, according to a gazette notice.
Sri Lanka banned open account imports in May despite banks being reluctant to open letters of credit fast due to forex shortages raising fears of food shortages and price spikes.
However President Ranil Wickremesinghe allowed imports of staple foods under open account terms, ensuring steady supply of lentils, sugar, onion and potatoes initially at elevated prices.
Sri Lanka faced forex shortages after money was printed by the central bank to suppress rates and sterilize interventions. Rates have now been allowed to go up to reduce domestic credit and outflows.
Maize and Soybean could be imported by registered poultry feed makers with the approval of Secretary of the Ministry of Agriculture.
Sri Lanka has a draconian import licensing raj for maize to keep domestic prices artificially high and give fat profits to maize collectors generally referred to as a ‘mafia’ and promoting protein malnutrition among less affluent, critics have said.
Poultry farmers are caught pincer-like between maize farming collector lobby on production costs and the Consumer Affairs Authority which places price controls on chicken meat and eggs.
Due to artificially high feed costs due to protectionism Sri Lanka also cannot build a competitive export industry in poultry, analysts have said.
Sri Lanka is now facing steeply higher food prices after the central bank printed money for two years and the currency collapsed from 182 to 360 to the US dollar, while a domestic maize harvest was also reduced in 2022 due to a fertilizer ban in another state intervention.
Ajith Gunasekera, President of the All Island Poultry Association had warned for several months that chicken were laying less eggs due to lower quality feed. When it becomes expensive to feed chicken, farmers tend to sell them for meat amid higher meat prices.
