Sri Lanka price controls disrupt rice market: reports

April 20, 2008 (LBO) – Sri Lanka’s Zimbabwe-style price controls on rice have started to disrupt supplies threatening to turn what was simply a steep spike in domestic rice prices into a full blown crisis with actual rice ‘shortages’. . Last July Zimbabwe, a country with a history of money printing and 100,000 percent inflation a year, slapped price controls driving goods out of shop shelves while authorities arrested thousands of traders and shop keepers.

Sri Lanka’s consumer affairs minister Bandula Gunewardene has threatened to use the military to open closed wholesale rice shops, while supermarkets started rationing rice at a retail level, media reports said.

“If the shop owners continue to close shops and hide rice, I will use the Army to open shops and make rice available to the consumers on Monday,” the minister Gunewardene was quoted as saying in the The Nation newspaper.

Sri Lanka’s rice prices have been rising since wheat prices were raised in response to a global boom in grain prices brought about largely by US money printing that has sent the dollar plunging and inflation soaring around the world.

US rate cuts since last July have worsened a global commodity bubble, sending foods, minerals, metal