Sri Lanka vegetable traders hit by contradictory allegations

In the past few months following floods which destroyed agricultural output as well as loose monetary policy has driven prices up to record levels.

Critics say heavy state interference in agriculture including import duties have hampered the ability of people to feed themselves, increasing food insecurity.

Even the state itself has imported poultry and eggs after driving maize prices up through taxes. Coconut has been imported by the state after taxing vegetable oil to high levels.

The Sunday Times said the tomatoes were ‘illegally’ imported and police had raided traders, in the Dambulla economic centre in central Sri Lanka.

In the past media and government minister have been blamed traders for pushing prices up.

The economic centre has now developed into a sophisticated agricultural market which is not very well understood by the ordinary public or farmers.

It has shops which operate on a commission basis much like stock brokers at an exchange. Prices fluctuate when incoming volumes of vegetables do not match the number of buyers from cities who take the produce away.

As a result a type of ‘market maker’ has emerged who buys when prices fall and sell when buyers re-emerge later in the day, helping stabilize prices. Economic analysts say such activities are vital for a vibrant market and to prevent extreme volatility in prices.

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