The Hon. Wasantha Samarasinghe - Minister of Trade, Commerce, Food Security and Co-operative Development

¶ 01 Hon. Presiding Member, today we debate the Regulation relating to Special Commodity Levy No. 546 under Section 2 of Act No. 48 of 2007. Specifically, the recent increases in levies on imported potatoes and big onions: the levy on big onions per kg was raised from Rs. 10 to Rs. 50; on potatoes from Rs. 50 to Rs. 80. We did this so local onion and potato farmers receive a price in the market because they supply a significant share of national consumption and need to hold produce.

¶ 02 During this debate several claims were made. Hon. Harsha de Silva spoke about our cool room facility near the Dambulla Economic Centre. Others also made various assertions. This is Parliament; anything said is broadcast live, and some say whatever they wish. But not everything said is true.

¶ 03 On salt: We earlier concluded the salt issue. Permission was given to import salt due to a shortage. However, consignments arrived after the permitted window. Under Sri Lanka Customs rules, the Bill of Lading date (vessel laden date) must be within the permitted period; otherwise clearance is refused. Some tried hard to push late consignments through. About 560 containers were involved, though some alleged 800. Some tried bulk CUSDECs via Trincomalee. Around 10,000 tonnes came that way. Altogether 186,000 MT of salt arrived within 20 days, whereas our annual need is about 170,000 MT. The Cabinet decided clearly: any shipment laden after the permitted B/L dates cannot be released. Some falsified B/L dates and CUSDECs; some consignments even failed quality with mud contamination. Customs detained them; some are now forfeited and will be auctioned per procedure. Meanwhile, domestic production at Hambantota, Elephant Pass and Puttalam salterns is ongoing. Salt issue is closed.

¶ 04 On the Dambulla cool room Hon. Harsha raised: It was built under Indian assistance, initiated around 2019, with CECB as consultant and an Indian contractor. On 22 September, we pressed the contractor and CECB to complete. Three key issues remained: roof leakage, unbalanced floor, and need for 20-foot-high racking with in-warehouse vehicle movement; also a technical issue in the cooling system performance parameters (ToR specified maintaining within 5% after loading). We asked them to rectify all and complete within this month so we can commence operations in early December. The Budget has allocated Rs. 200 million this year, but we also need about Rs. 360 million for racks and material-handling equipment (forklifts) for six chambers with 5,180 MT capacity. Without these, accepting handover would be improper.

¶ 05 The consultant indicates contractor delay since award in 2019; now in 2025, with liquidity charges around Rs. 60 million applicable. The contractor resists if charges are imposed. As this is an Indian grant project, we have discussed with the Indian High Commission to resolve amicably and operationalize by early December. We plan a mixed operations model: some chambers by the Co-operative Wholesale Establishment and Lanka Sathosa, others with private sector participation, per our business plan. We will not let historical delays derail; we will commission within this year.

¶ 06 Now, onions and potatoes. The big onion issue is more sensitive. Average monthly onion consumption is about 25,000–30,000 MT; roughly 30,000 MT per month. In 2025, imports were: Jan 28,565 MT; Feb 29,199; Mar 17,317; Apr 28,494; May 28,722; Jun 30,597; Jul 27,900; by Aug 25th, 26,200; by Aug 31st, 29,600. So we were importing around 27,000–30,000 MT monthly. The Yala season forecast for local big onion was 50,000 MT.

¶ 07 If monthly need is 25,000 MT, annual is about 300,000 MT. We produce for roughly two months; import for about ten. Some allege that three months’ stock was imported and warehoused before the levy. Not true. Customs data shows by Aug 25th (the day we imposed the levy) arrivals were around 26,000 MT that month; not 50,000 MT pre-positioned. After the levy on Aug 25th, arrivals fell sharply: Aug 25–31 only 3,071 MT; Sept 1–28, 7,202 MT. From typical ~30,000 MT per month, arrivals dropped to about a quarter, because domestic onions were in market. For Oct 1–26, CUSDECs lodged total 8,045 MT. With monthly need ~25,000 MT, two months need ~50,000 MT. We imported about 15,000 MT over those two months; therefore about 35,000 MT must be domestically supplied—consistent with the 50,000 MT local forecast. Prices subsequently adjusted: with government and private sector purchases around Rs. 130–160/kg for onions and Rs. 210–250/kg for potatoes at Nuwara Eliya at peaks, we use market operations to protect farmer prices, not as a permanent tool.

¶ 08 Some say we should have imposed the levy three months earlier. Had we done that, consumer prices would have spiked to around Rs. 600/kg. We balanced farmer and consumer protection.

¶ 09 We have also discussed onion storage. Farmers use urea; for longer storage, ammonium nitrate-based nutrition supports storability under GAP. We are tasking the Department of Agrarian Development to guide farmers on improved practices and storage readiness; otherwise domestic onions will not store well.

¶ 10 On rice: On Oct 13 we took Cabinet decisions regarding Keeri Samba. Consumption share is around 10% while production is about 7%, creating a 3% gap. Some exploit this to sell Keeri Samba at Rs. 300/kg though wholesale valuations indicate around Rs. 245/kg, extracting Rs. 55 extra through a trader mafia. To address this, Cabinet authorized import of substitutes—Pal Ponni and GR-11—up to at least 20,000 MT, calibrated to observed Yala and Maha outcomes. On Oct 13 the Gazette was signed; on Oct 14 we notified that by Bill of Lading up to Oct 28, each importer may bring up to 520 MT (about 20 containers, at ~26 MT each). Indian ports supplying these varieties (Vizag, Chennai, Thoothukudi, Kattupalli) have weekly sailings; limiting to about two weeks’ sailing helps modulate volumes. After Oct 28, we gave three weeks (till Nov 15) for clearance domestically. Limits per importer and time windows are to prevent over-importing while breaking artificial price spikes. Assertions that messages were sent to favorites are false; there are over 200 rice importers—no special favors.

¶ 11 In summary: our levy changes and targeted import relaxations protect both farmer and consumer. We will continue to monitor and act through the Food Policy and Security Committee.

¶ 12 Thank you.