India overcomes the economic crisis and sends the first rice aid to Sri Lanka

TEMPO.CO, jakarta -Indian traders forwarded 40,000 tons of rice Sri Lanka in first food aid as reported Reuters on Saturday 2nd April 2022. The staples will be delivered ahead of the main festival in Sri Lanka.

Indian rice will be available before demand picks up for Sri Lanka’s Lunar New Year celebrations in mid-April, a Mumbai-based trader for a global trading firm said.

“At the moment, only India can deliver rice quickly. Other countries take weeks, India can deliver in days,” said the trader.

The delivery of 40,000 tonnes is part of the 300,000 tonnes that India will ship to Sri Lanka over the next few months. Indian traders are expected to start shipping other key commodities such as sugar and wheat in the coming weeks, the trader said.

The Indian Ocean island nation of 22 million people is struggling to pay for important imports. This comes after a 70 percent drop in foreign exchange reserves over the past two years prompted currency devaluations and attempts to seek help from global lenders.

Limited fuel and skyrocketing food prices sparked mass protests as the Sri Lankan government prepared for talks with the International Monetary Fund (IMF). This comes amid concerns about the country’s ability to repay its external debt.

India, the world’s largest rice exporter, last month agreed to a $1 billion credit line.

Rice shipments could help Sri Lanka slash rice prices, which have more than doubled in a year, fueling unrest.

Sri Lankan President Gotabaya Rajapaksa declared a national emergency on Friday night after violent protests against the country’s worst economic crisis in decades.

India’s support comes after the previous government, led by the Rajapaksa family, has brought Sri Lanka closer to China over the past decade. This caused unrest in New Delhi.

Sri Lanka has become a net importer of rice as production fell after Colombo banned all chemical fertilizers in 2021, a move that was later reversed.

Also read: Unrest over widespread economic crisis, Sri Lanka declares state of emergency

SOURCE: REUTERS

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