Sri Lanka imports 50,000 tons of rice under Indian line of credit: Wickremesinghe

Crisis-hit Sri Lanka has decided to import 50,000 metric tonnes of rice under India’s line of credit to curb an abnormal rise in rice prices, Prime Minister Ranil Wickremesinghe said on Thursday, as the island nation is grappling with an impending food shortage.

The decision was taken after a discussion held at the Prime Minister’s Office to allocate funds to the State Trading Corporation under the Indian Loan Relief Scheme, the EconomyNext news portal reported.

This should avert a possible shortage of rice in the future and curb the abnormal rise in rice prices, the prime minister’s office said in a statement on Thursday.

In March, India extended a $1 billion line of credit to the cash-strapped Sri Lankan government to weather the current economic turmoil and address food shortages.

After the signing of a line of credit extension agreement, Ministry of External Affairs (MEA) spokesperson Arindam Bagchi said that India has always stood by the people of Sri Lanka and will continue to provide all possible support to the country.

In April 2021, President Gotabaya Rajapaksa announced a ban on chemical fertilizers, which dealt a fatal blow to the production of rice and other essential foodstuffs.

Before the fertilizer ban, Sri Lanka was self-sufficient in rice production.

The situation was exacerbated by an acute shortage of foreign exchange reserves, which meant that the Sri Lankan economy would be heading for a free fall.

The United Nations Resident Coordinator in Sri Lanka, Hanaa Singer-Hamdy, said nearly 4.9 million people are currently in need of food assistance, representing nearly 25 percent of the country’s population.

With Sri Lanka in the throes of an impending food shortage, Wickremesinghe invited David Beasley, Executive Director of the United Nations World Food Program, to visit Sri Lanka.

The country on the verge of bankruptcy, with an acute currency crisis that led to a default on external debt payments, announced in April that it was suspending the repayment of nearly $ 7 billion in external debt due for this year on approximately $25 billion due through 2026.

Sri Lanka’s total external debt stands at $51 billion.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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