- Request for rescheduling of exiting loans
- One-year moratorium on capital and interest on all existing debt
- Concessionary terms on working capital requirements
The essential food and commodities’ importers have written to the government requesting immediate assistance, as the current security situation in the country in the aftermath of the Easter Sunday bombings has severely dented the capacity to service their loans.
In a letter addressed to Prime Minister Ranil Wickremesinghe, the importers have asked for re-scheduling of existing loans, one-year moratorium on capital and interest on all existing debt and concessionary terms on working capital requirements.
The Essential Food and Commodities’ Importers and Traders Association said they command over 85 percent of the total essential food and commodities importation to the country with an annual import bill of US$ 1.2 billion.
“Currently we as importers and traders are experiencing an unprecedented situation where our existing debt has risen due to the recent security situation in the country.
“Any further tolerance may not be possible, as on the one hand our obligation to the State to meet the essential food demand of the country is affected, whilst our own exposure to the issues confronting us financially threatens our own existence,” the letter read.
The food and commodities items imported by these importers, such as rice, sugar, dhal, onions, garlic, coriander, milk powder, chilies, canned and dry fish, directly represent the country’s cost of living (CoL) index measurement and CoL food basket.
The importers said their financial situation has been on the decline due to price controls imposed by the government on certain imported essential food and commodities and the significant depreciation of the rupee against the US dollar.
Sri Lanka’s rupee depreciated almost 20 percent in 2018, although it appreciated about 4 percent in the first three and a half months of 2019 before depreciating again after the Easter Sunday bomb attack on April 21.
“During the last three years, the forex movement in the country had an unprecedented increase from a mere Rs.130 to a US dollar ending up over Rs. 182 to a US dollar.
Our debts swelled as import values got further enhanced in the rupee conversion against the progressive rise in the parity rate between the US dollar and that of the Sri Lankan rupee,” the letter noted.
It further said that the membership of their Association supplies to 240, 000 dealers scattered across the country and pays US $ 600 million as customs duty to the government as all of their imports are dutiable.
“Since we are currently burdened with our servicing capabilities with our banks, we seek the government’s immediate intervention to bring about feasible solutions to retain our role as performed traditionally in the past.
“The current environment has compelled us to seek assistance to prevent any further deterioration of the prevailing conditions,” the letter read.