According to Trade and Food Security Minister Nalin Fernando, Sri Lanka plans to import maize to make animal feed using a billion-dollar credit line from India.
“One of the most pressing issues we’ve faced in recent months has been the difficulty in obtaining raw materials for poultry farmers to make feed,” Trade and Food Security Minister Nalin Fernando told parliament.
“This is one of the reasons why the price of chicken and eggs has risen so dramatically.”
“As a result, we have allocated $20 million USD from the Indian credit line to import maize.”
Sri Lanka printed money for two years to suppress interest rates, resulting in the collapse of a soft-peg with the US dollar from 182 to 360, with the currency falling from 200 in March 2022.
Forex shortages persisted as a result of a failed float and continued money printing.
A ban on chemical fertiliser has also hampered domestic maize production in Sri Lanka. Despite the fact that it was relaxed in late 2021, currency shortages caused by the broken peg made it difficult to import fertiliser.
Minister Fernando stated that maize imports will continue until domestic production recovers.
Meanwhile, the central bank raised interest rates in order to choke off private credit and reduce forex outflows and inflation. External and domestic money growth both increased sharply in May and June 2022.
