ECONOMYNEXT – Sri Lanka will import the mid-sized variety of onion called Rose Onion in response to rising big onion prices, Trade Minister Nalin Fernando has said.
Rose onions will be available to consumers at prices between Rs375-400 a kilo.
Fernando said he met wholesale traders of Pettah to discuss rising onion prices ahead of several cultural and religious festivals.
The supply of big onions in the country decreased after neighboring India and Pakistan stopped onion exports.
Fernando said that although the government had implemented controls such as taxes to protect local producers, local production has collapsed.
The government is implementing a tax policy management to uplift small and medium businessmen, Fernando said.
Taxes are kept high to give tax arbitrage super profits to crony-mercantilist, import substitution businesses, critics say.
Crony businesses have strengthened their claims claiming to ‘save foreign exchange’ after a soft-pegged central bank was set up in 1950 started creating monetary instability with liquidity injections.
In Sri Lanka taxes are brought down by midnight gazette without prior notice, bringing large losses to importers who cleared the goods shortly before.
The mid-night gazette is one of the key sources of regime uncertainty (a fluid operating regime for businesses), that raises business risks and undermines the economy.
Sri Lanka has in the past cut taxes by midnight gazette and imposed price controls on retailers who had bought stocks at earlier prices, imposing sweeping losses on small businesses. (Colombo/Mar13/2024)