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Price monitoring and analysis country brief - Sri Lanka

Year of publication 2011

Author Agriculture and Economic Development Analysis Division

Product type Document

Edition 1

Synopsis (short abstract) Favourable forecast of Yala season paddy crop has led to declined rice prices. Overall food security situation has improved particularly thanks to the agricultural recovery. Agencies describe the situation of hunger as serious with moderately high prevalence of undernourishment. Since the war ended IDPs have returned to their place of origin in the north; repatriation process has been nearly completed and most refugees' camps have been closed. The government is supporting agriculture throu gh input subsidies and by undertaking trade measures to reduce imports and increase self-sufficiency.

Language English

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    Rice prices have been rising in the last months but stabilized in January while wheat flour prices, although remained stable, were very high, mainly due to import dependence. Although food security has improved, poor groups particularly children suffer from high levels of malnutrition. Agencies are concerned over a serious food security situation. Over 1 million people were affected by floods earlier in the year in the east and central parts of the country. Flooding damaged also paddy crop i n the main (Maha) season, but rice output for 2011 was still good. The Government is supporting domestic production through wheat import duties and incentives for farmers such as input subsidies and irrigation development.
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    Prices of rice and wheat remained stable however, experienced some fluctuation in November and December. The overall food security situation is favorable however, due to low cereal production, it remains a concern in certain districts in Mid-Western Mountain and Mid-Western Hill. Natural calamities have affected people's food security in recent months; moreover the political situation remains tense. The Government has in place several safety net schemes to support vulnerable groups; the in ternational community is also helping to assist people affected by natural disasters.
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    The sharp increase in staple food prices reached its record level in July leading also to considerable deterioration of terms of trade for pastoralists. An estimated 3.75 million people are classified as food insecure. Major concerns are for the over 490,000 Somali refugees who are in dire need of emergency assistance. The food security situation continues to deteriorate as a consequence of persistent drought condition combined with high food prices, insecurity and displacement. The worst af fected areas are the northern and eastern parts of the country. The Government waived the import duty on maize to ease prices to consumers, while humanitarian aid agencies and UN institutions are assisting the population.
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