Sri Lanka Economic Crisis: Rice Costs Rs. 500 Per Kg

Sri Lanka food crisis

Since Sri Lanka economic situation worsens, prices of basic necessities such as milk and rice have skyrocketed, and residents are forced to queue for hours to refuel their vehicles. Power supply has also been severely impacted in many parts of the country.

Because of a lack of paper for printing question papers, schools are unable to conduct examinations.

People have been forced to cross into India due to the country’s deteriorating condition. According to the news agency IANS, almost 16 Sri Lankan nationals reached Tamil Nadu in two batches on Tuesday.

Sri Lankan inflation is at an all-time high

The majority of the refugees arriving in India are unemployed and have been forced to flee their home countries because critical commodities have become costly due to record inflation, and blackmarket prices have remained prohibitive.

One of the evacuees had to pay a boatman Rs 50,000 to be dropped off near Rameswaram. The Indian coast guard eventually rescued him. According to the IANS report, another ten persons arrived in Tamil Nadu, but no details were given.

An activist based in Mannar, V S Sivakara, told the Indian Express in a separate story that the migration could be only the beginning.

“It is almost inevitable that the price of rice would reach Rs. (Sri Lankan) 500/ kg in another week,” he stated, elaborating on the escalating food prices. Today, sugar costs Rs. 290 per kilogram, and 400 grams of milk powder costs Rs. 790.

According to Reuters, rising food prices have forced restaurant operators to boost the price of a cup of milk tea to Rs 100. The country is unable to import necessary items due to a lack of funds.

Sri Lanka has been struggling to find dollars to pay for more expensive gasoline supplies since January, with foreign currency reserves falling to $2.31 billion in February, Reuters reports. According to the latest government data, Sri Lanka’s inflation reached 15.1 percent in February, the highest in Asia, with food inflation reaching 25.7 percent.

Several Sri Lankans fled to India during the civil conflict in the early 1980s, and over 60,000 refugees now live in 107 camps across Tamil Nadu. Around 30,000 people live outside of the camps or in the broader population.

On March 17, India offered Sri Lanka a $1 billion loan facility, and President Gotabaya Rajapaksa had announced the day before that his government would engage with the International Monetary Fund to resolve the situation.

Thousands of people gathered on the major Galle Road in Colombo to protest shortages and high pricing, with some even entering the President’s office.

Food Scarcity is Driving People to Flee

The financial crisis in Sri Lanka is having a significant impact on southern India’s coastline, notably Tamil Nadu, as Tamil migrants escape the island’s northern regions.

Two sets of 16 Sri Lankan Tamils from the Manna and Jaffna provinces arrived in Tamil Nadu on Tuesday. According to reports, intelligence personnel in Tamil Nadu have discovered that 2,000 refugees are anticipated to arrive in the coming days.

What Caused the Crisis?

Sri Lanka’s economy is heavily reliant on tourism and international trade. The pandemic has been disastrous, with the government estimating a loss of $14 billion over the last two years. The GDP will decrease by 1.5 percent between July and September 2021, according to the central bank.

Sri Lanka, which has depleted its reserves and has large bills to pay, is in severe need of foreign currency, with a debt obligation of $7 billion due in 2022. Sri Lanka’s foreign exchange reserves are dwindling, owing in part to non-building projects financed by Chinese loans.

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