The controversy over the arbitrary price hike by wheat flour companies was temporarily settled on Thursday, with a promise by the Government to look into a reasonable price revision to cushion the impact of world market price fluctuations.
A meeting between the Consumer Affairs Authority (CAA), representatives of the two companies Prima Ceylon (Pvt) Limited and Serendib Flour Mills Pvt Limited and representatives of Ceylon Bakery Owners Association was held last week. At this meeting, Industry and Commerce Deputy Minister Buddhika Pathirana pointed out that the arbitrary price revision of wheat flour, one of 15 prescribed commodities under the Gazette Extraordinary No:1975/68 of July 14, 2016, was illegal and that their action set a bad precedent.
Prima Ceylon, one of the two companies which share exclusive rights on wheat imports to the country, announced that it would increase the price of one kilo of wheat flour by by rupees eight from July 16. According to the Gazette Extraordinary issued in 2016, the price of all purpose wheat flour should remain at Rs.87 unless otherwise permitted by the CAA.
The Authority carried out surprise island wide raids on dealers, distribution and wholesale agents of the flour companies on Wednesday and Thursday and nabbed nearly 130 traders who sold the essential commodity at the illegally revised prices.
The CAA is required to submit a report to the cost of Living Sub-Committee with recommendations for a fair price revision by Tuesday next week, following an analysis of all aspects including the world market trends and US dollar fluctuations, the DG CAA M.S.M.Fouzer told the Sunday Observer.
He said the CAA will proceed with legal action against the errant distributors and wholesale traders who were raided last week for breaching the law.
It is learnt that the two companies have suspended the selling of wheat flour at revised prices pending a decision next week by the COL Sub-Committee of the Finance Ministry which is chaired by Agriculture Minister, P.Harrison.
“We received a phone call from Prima saying the old stocks of the wheat flour will be issued at a discounted rate (old price) until next week,” All Ceylon Bakery Owners Association Chairman, N.K.Jayawardena said.
“My discussions on wheat flour with Serendib and Prima as the convener of the Cabinet Committee on Cost of Living was successful. Already, Serendib has informed us that they suspended the price increase. Prima is expected to follow. The requested increase will be discussed at COL and decided after analysis of data,” Non-Cabinet Minister of Economic Reforms and Public Distribution Dr. Harsha de Silva tweeted after a meeting with the company heads on Thursday.
Prima had later confirmed that the company also fell in line until a decision by the Government next week.
It is likely that the wheat flour prices may be revised next week. “We need to protect the consumer but not at the cost of businesses,” the CAA DG said, adding that all these aspects will be looked into next week.
Although the Serendib Mills cannot revise prices of its product according to the agreement entered into with the Government, Prima Ceylon pointed out that it has been given rights to revise the price. The company has cited the contract agreement at the meeting with Deputy Minister Pathirana on Thursday, adding that they were compelled to revise the prices due to the depreciation of the Sri Lankan rupee against the US dollar.
The All Ceylon Bakery Owners Association Chairman said they too suspended the decision to raise the price of a loaf of bread by rupees five after the action by wheat flour companies. “However, We will have to revise our prices even if there is a slightest increase in price,” he added.
Prime Minister Ranil Wickremasinghe also called for a report on the wheat flour controversy to see what caused the arbitrary action by companies and whether it was a delay on the part of COL Sub-Committee.