An import ban in cash-strapped Sri Lanka is leaving a bad taste in the mouths of its curry lovers, depriving them of vital turmeric supplies and encouraging budding smugglers to take their chances with the spice.
With no foreign cash coming in as COVID-19 cripples the tourism industry, the government in March last year imposed a ban on many imports to stop money leaving the country, so that it can pay US$4.5 billion this year to service its international debt.
Vehicles, floor tiles and machinery parts are among the items prohibited, but it is a ban on turmeric that has the Indian Ocean island simmering with anger.
Photo: AFP
The aromatic root is a vital ingredient in curries and other local cuisine, and also increasingly sought after as a health supplement.
However, only one-fifth of the 7,500 tonnes Sri Lanka consumes every year is produced locally.
Since the pandemic, demand has increased so much that prices have shot up 20-fold to an eye-watering 9,000 rupees (US$48) a kilogram — a week’s wages for many Sri Lankan workers.
“Our home-cooked curries are not the same since the pandemic,” health worker Prarthana Weerasinghe said, adding that many market varieties were now “adulterated.” “We never thought turmeric would be such a big issue. We had taken it for granted. Now, we can’t afford to use it in our daily cooking.”
Customs agents have found 25 tonnes of the spice smuggled into the country from India in containers marked “onions,” while navy patrols have seized several tonnes from Indian fishers.
Those seeking turmeric have watched on helplessly as officials burn seized turmeric at crematoriums, saying they do not want to flood the market and depress prices.
The government said it wants to promote local production over cheap imports as hundreds of thousands have lost their jobs and the economy recorded its worst-ever contraction of 3.9 percent last year.
Sri Lankan Prime Minister Mahinda Rajapaksa’s ban on “non-essential” items has also seen a surge in prices for other goods, including car tires, floor tiles and even toilets.
“There are no foreign-brand tires available for small cars,” a dealer in Colombo said. “Those who have stocks have jacked up prices.”
Kasun Chaminda said he had lost regular customers for his taxi operation because he could not buy new tires.
“When they realized that I was unable to replace the worn tires, they canceled the [regular] hire. It is dangerous to run with worn tires, but I have no choice,” he said.
With no foreign competition, the share prices of local tile and sanitaryware makers have soared five-fold in less than six months — making the tiny Colombo stock exchange a star performer during an economic crisis.
With banks prevented from releasing dollars to finance vehicle imports since March last year, the second-hand car market has also shot up, with the price of used vehicles almost doubling.
Locally assembled vehicles, which are generally shunned as being of lower quality, are also suddenly sought after.
There are still those seeking foreign rides on the sly — customs seized 12 smuggled vehicles hidden in containers last month — the forged documents said the containers were for a diplomatic mission.
The initial three-month ban has now been extended until at least the end of this year, and Sri Lanka’s trading partners are warning of possible retaliation.
The EU, Colombo’s second-largest export market after the US, said it could report the country to the WTO.
However, the central bank’s economic research chief Chandranath Amarasekara told reporters on Friday that it was better to risk trade retaliation than lose foreign exchange to finance imports and having to default on debt repayments.
Central Bank of Sri Lanka Governor W. D. Lakshman said the government was in talks with undisclosed foreign sources to raise US$4 billion to US$5 billion needed for debt repayments this year.
The import ban led to a 20 percent fall in imports in the first 11 months of last year, but they have eased Sri Lanka’s currency crunch and steadied the rupee, which last year tumbled against the US dollar as reserves dwindled.
However, economic analyst W. A. Wijewardena said the “arbitrary” import ban could retard growth and spawn corruption.
He told reporters that it was draconian and “anti-poor, because it is they who have to go without.”
“It is not desirable to continue the ban for long,” Wijewardena said.
For Weerasinghe, sick to her stomach of adulterated turmeric on the market: “It is better to cook without.”
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