ECONOMYNEXT – Sri Lanka’s main (Maha) season rice harvest is projected at 2.56 million metric tonnes, based on cultivation up to December 2024, including re-cultivation after crop damage, the Department of Agriculture has said.

Farmers are estimated to have cultivated at least 806,453 hectares or 93 percent of the target of 868,427 and estimated gross harvesting area was 717,847 hectares, the second interim projection.

Foods

About 79,115 hectares was flooded in the second deluge close to harvest damaging at least 25,532 hectares.

In the first round of floods, 124,447 hectares of young plants were hit by October, and farmers had re-cultivated, amid water availability.

Government officials have said fertilizer subsidies were issued to farmers with around 739,000 hectares.

Some farmers had complained that they had to spend on seed paddy, weedicide and sometimes the first round of fertilizer, pushing up costs.

High Farmgate Prices

Sri Lanka said state agencies will pay 120 rupees for rough Nadu (used to make par-boiled rice) which is probably the highest farmgate price in Asia and perhaps the world, analysts say.

The farmgate price of Thailand in the most recent season was around 75 to 85 rupees a kilogram, based on the most recently available data.

In Vietnam farmgate prices are around 8,000 dong or about 94 rupees a kilo. Vietnam, an exporter of high quality rice, is also importing rice Sri Lanka style quality rice from India to feed livestock including pigs.

Sri Lanka has already imported rice after prices spiked in November and December 2024 with a 65 rupees kilogram tax (about 220 dollar a tonne).

Due to years of protection to build what critics say is a policy based on mistaken ideas originally developed in Nazi Germany (autarky), Sri Lanka rice prices and food prices in general are sharply higher than the rest of the world.

Farmers are also complaining of crop damage from a growing wild elephant population.

Based on the current data of the Department of Agriculture, Sri Lanka’s Maha crop could be the lowest since the 2021/2022 season, when the country was hit by a fertilizer ban promoted by the Government Medical Officers Association.

Sri Lanka also faced a shortage of red rice after the Consumer Affairs Authority imposed price controls below par-boiled rice in December, leading to black markets and no red rice in shop shelves for the New Year.

The Consumer Affair Authority through its price controls had previously imposed price controls on a series of goods, including dhall and sugar, creating shortages and undermining public confidence in the ruling government ahead of the Maha harvest.

Economic Recovery

Sri Lanka is recovering from a currency and collapse triggered by the central bank cutting rates and chasing a floor or single policy rate with excess liquidity (abundant reserve system) which made some people and children skip meals and abandon protein consumption amid sharply higher poultry prices.

Poultry prices have since fallen and feed requirements are higher. Sri Lanka’s tourism sector has also recovered, requiring more food.

Due to autarky (self-sufficiency) Sri Lanka has restrictions on the import of maize, a cheaper protein rich input into chicken feed. Rice in any case gives mostly energy needs.

Sri Lanka is also facing a steep fall in coconut output, but the Consumer Affairs Authority has been kept out of the sector and coconuts are available in shops at market clearing prices.

Some partially unripe coconuts are also now coming to the market, consumers have complained. (Colombo/Feb06/2025

Published Date: February 6, 2025