COLOMBO : Importers of essential food items are awaiting an anticipated $ 25 million worth of funds from the Central Bank of Sri Lanka (CBSL) facilitated through the Trade Ministry.
The matter was to be discussed and resolved last week, yet has not seen forward motion, sources told.
Last week, over 1,000 shipping containers with essential food items were stuck at Colombo Port due to the lack of US dollars needed to pay for their release. Such containers incur demurrage charges due to delays in them being released, adding to the cost of items in the market.
Responding to a query, Essential Food Commodities Importers and Traders Association’s Nihal Senevirathne stated that discussions with the Government to release the dollars needed were ongoing, adding that the dollar shortage was posing a complex challenge for many sectors.
However, several private and public banks are releasing some of the dollar funds needed to clear part of the backlog of consignments stuck in Port.
“Some state and private banks have begun to release some funds we have requested. We (importers) have been waitlisted, so some bankers who get export dollars have been releasing some of the funds we have asked for. But it is not enough,” Senevirathne said, adding that progress on the matter was slow.
“For example, if we have 100 containers to clear, the funds being made available now are enough to clear 10, maybe 12. This is an improvement, but is nowhere near what is needed. Meanwhile, more containers arrive. So, they are piling up,” Senevirathne said, stressing the need for a more permanent solution to the issue.
According to Senevirathne, a minimum of approximately $ 110 million per month is needed to pay for importation of essential food items. “This ($ 110 million) is without calculating what is needed to import wheat flour,” Senevirathne stated. He pointed out that to ensure continuous supply to the market, some importers have sought to import items on credit.
When asked, Sri Lanka Ports Authority (SLPA) Chairman Capt. Nihal Keppetipola acknowledged that the backlog of containers in the Port was adding to congestion at Colombo Port. “The sooner they are cleared, the better. It affects terminal occupancy. I can only speak for the SLPA terminal, but I am sure the other terminal operators have similar issues,” Capt. Keppetipola said.
Port congestion, lack of forex for payments, and the ongoing Covid-related strain on global supply chains have pushed up shipping costs and affected trade. The trickle-down effect of such turbulence is felt at the marketplace, the fuel pumps, and in households.