Sri Lanka import 50,000 Mt rice under Indian credit line: Wickremesinghe

Crisis-hit Sri Lanka has decided to import 50,000 metric tonnes of rice under the Indian credit line to curb an abnormal rise in rice prices, Prime Minister Ranil Wickremesinghe said on Thursday, as the island nation is grappling with an impending food shortage.

The decision was taken after a discussion held at the Prime Minister's Office to allocate funds to the State Trading Corporation under the Indian loan assistance programme, news portal EconomyNext reported.

This is expected to avert a possible rice shortage in the future and to curb the abnormal rise in rice prices, the Prime Minister's Office said in a statement on Thursday.

In March, India extended a USD 1 billion credit line to the cash-strapped Sri Lankan government to tide over the current economic turmoil as well as in dealing with the food shortage.

After an agreement to extend the line of credit was inked, Ministry of External Affairs (MEA) Spokesperson Arindam Bagchi said India has always stood with the people of Sri Lanka and will continue to extend all possible support to the country.

In April 2021, President Gotabaya Rajapaksa announced a ban on chemical fertilisers, which led to a crippling blow to the production of rice and other essential food items.

Prior to the fertiliser ban, Sri Lanka was self-sufficient in rice production.

The situation was exacerbated by an acute scarcity of foreign exchange reserves, which meant that the Sri Lankan economy would head into a tailspin.

The UN Resident Coordinator in Sri Lanka, Hanaa Singer-Hamdy had said that nearly 4.9 million are currently in need of food assistance, making up for nearly 25 per cent of the country's population.

With Sri Lanka in the throes of an impending food shortage, Wickremesinghe has invited David Beasley, the Executive Director at the United Nations World Food Programme to visit Sri Lanka.

The nearly bankrupt country, with an acute foreign currency crisis that resulted in foreign debt default, announced in April that it is suspending nearly USD 7 billion foreign debt repayment due for this year out of about USD 25 billion due through 2026.

Sri Lanka's total foreign debt stands at USD 51 billion.