Bath Curry Indicator trending down

food

Advocata Institute’s Bath Curry Indicator (BCI) , which tracks changes in the retail price of food in Colombo that typically goes into a packet of rice, recorded a year on year increase of 53% in October 2022.

Compared to June 2022, prices of the BCI basket of food have been declining. The average price of green chillies, tomatoes, dhal and beans fell over the past four months, contributing to the reduction of the overall BCI. Supermarket prices tracked by the BCI also show a similar trend.

Official year on year food inflation stood at 85.6% in October 2022 based on the Colombo Consumer Price Index. A decline of 2% compared to September 2022.

Food inflation in Sri Lanka over the past 24 months has increased at an unprecedented rate. Whilst external factors like the pandemic and the Russian-Ukrainian war have caused supply chain issues that have resulted in global price levels rising, In Sri Lanka, the price increases are mainly a result of years of poor monetary, fiscal and trade policy.  A depreciated currency, ban on fertilizer and import bans in general due to low foreign reserves have exacerbated price increases.  Continued decline in prices will depend on future macroeconomic policies made to bring down inflation as well as policies to improve agriculture productivity.

“Food inflation in Sri Lanka is the 4th highest in the world according to the World Bank in September 2022” said Dr Roshan Perera, a senior visiting fellow at the Advocata Institute.  “Although food price inflation is declining it still remains at historically high levels. A continuing decline in  international food commodity prices and improvements in domestic agriculture supply would be required to bring down inflation to previous levels.  Access to fertilizer at a reasonable cost and at the right time would be vital to ensure adequate domestic agriculture supply.”  She went on to say.

The BCI tracks the weekly retail prices in the Colombo market of the most commonly consumed food ingredients that might be used in a typical Buth curry meal. The prices are collected from the “Weekly Indicators” that the Central Bank publishes.

        The BCI Indicator can be accessed at www.bci.advocata.org.

Advocata is an independent policy think tank based in Colombo, Sri Lanka. We conduct research, provide commentary and hold events to promote sound policy ideas compatible with a free society in Sri Lanka. Visit advocata.org for more information.

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