ECONOMYNEXT – Sri Lanka has imposed price controls on canned fish amid excess domestic capacity and low sales when the imported product is also taxed, Trade Minister Wasantha Samarasinghe has said.
There was already a price control of 480 rupees on a fish can, he said.
“Some salmon (a common reference to canned fish made from tuna, sardinella to jack mackerel) were sold at 480, some 500, 520, 440 rupees,” Minister Samarasinghe told parliament.
“We called the canned fish manufacturers. There are about 25 manufactures. This is a new industry for Sri Lanka.”
The fish canneries were an ‘import substitution’ scheme started under a Rajapaksa administration, where retail prices were pushed up artificially with import duties to help the businessmen make easy profits under cover of protectionism.
Many less affluent families who did not own refrigerators and also construction workers used canned fish.
“Children also eat this. It should be of good quality,” Minister Samarasinghe said. “A household should be able to get this for a low price. We told the factory owners, that there is a sea all around the island, you can catch fish and also export it to other countries and find dollars.”
Industries that gouge customers under import duties however are not usually export competitive analysts say. If they were, they would not have lobbied the political establishment for import taxes to corner consumers and make profits in the first place, analysts say.
Sri Lanka has some distressingly high food prices (as well as protein malnutrition of children of poor families) amid self-sufficiency and import substitution schemes for rice, maize and dairy products whic were revived over the last two decades.
Minister Samarasinghe said an imported fish tin was already taxed at 85 rupees and a kilo at 200 rupees (about 680 dollar a tonne).
“So, we asked what support can we give? ” Minister Samarasinghe said. “We asked what their capacity was”
The factories have a capacity to produce 500,000 cans. The daily consumption was 180,000 cans, he said.
“So there was a problem,” Minister Samarasinghe said. “A government market intervention was needed. There were also imports. We had to make an intervention.
“So, we imposed a price control 380 rupees. We reduced the price of a salmon (canned fish) for the people by 90 rupees.”
A price control gazette said a tuna can (drained weight 280 grams) should be sold at 380 rupees, mackerel 425 rupees and Jack mackerel 560 rupees.
Meanwhile some producers are lobbying for import taxes of 450 rupees per kilogram or a complete import ban, media reports said.
Sri Lanka did not remove taxes on imported food even during a recent currency crisis, as flexible inflation-targeting African countries did when their currencies collapsed. (Colombo/Jan14/2025)
