Jan. 31 (LBO) – Sri Lanka Tuesday raised import duties (taxes) on rice and wheat flour to discourage flour imports and to boost demand for local rice, the Finance Ministry said. It was not clear whether the tax will apply to the Singapore-owned Prima mill in Trincomalee, which imports whole grain for milling inside the country.
If wheat imported by Prima is free from the tax, analysts say its virtual monopoly in the market would be strengthened.
Sri Lanka’s trade ministry had earlier made sweeping statements about ‘breaking Prima’s monoploy’ status by encouraging other importers to bring in wheat flour.
The excise tax on rice will now go up from Rs. 9 to Rs. 21 per kilo and flour Rs. 10, the statement said.
The government is expecting a bumper harvest during the upcoming Maha season, which usually produces around 560,000 hectares of rice. The Yala season produces around 310,000 hectares of rice.
“There are also sufficient rice stocks in the local market and we need to give a fair price to local farmers,” the ministry said.
During the dry spell in 2004, Sri Lanka imported Rs. 6.18 billion worth of rice to meet the shortfall.
While locals are e