Sri Lanka

GIEWS Country Brief: Sri Lanka 27-June-2017

News and Press Release
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  • Cereal output in 2017 forecast to decrease significantly as result of severe drought in 2016 and early 2017

  • Rice import requirements forecast to increase considerably in 2017 on reduced output

  • Prices of rice increased in recent months and at high levels in June

  • Drought negatively impacted livelihoods and food security of affected households

Cereal output in 2017 forecast to decrease significantly due to severe drought

According to the joint FAO/WFP Crop and Food Security Assessment Mission (CFSAM) report, released on 22 June the 2017 aggregate rice output, the country’s main staple, is forecast at 2.7 million tonnes, almost 40 percent less than last year’s output and 35 percent lower than the average of the previous five years. The decrease is the result of a severe drought at end-2016 and early 2017, which compromised water availabilities for irrigation for the 2016/17 main maha season crops, resulting in a considerable decrease in plantings, widespread crop losses and sharply reduced yields. Paddy cultivations in rainfed areas and minor irrigation schemes, largely dependent on precipitations, were the most affected. Prospects for the 2017 secondary yala season paddy, due to be harvested in August and September, are also unfavourable mostly due to tight water supply situation in the key-producing areas and reported shortages of paddy seeds. Heavy rains in the second part of May caused localized floods and landslides, especially in southwestern parts of the country. Although these rains brought some relief to drought-affected areas in the southwest, severe water supply constraints remained in the main rice-producing districts located in the northcentral and eastern parts of the country.

Other cereals, including maize, various pulses, chillies and onions, mainly grown under rainfed conditions, were also heavily damaged by the dry weather.

Livestock suffered a temporary setback at the end of 2016 and the beginning of 2017, with reduced milk production due to poor pasture conditions, but have since recovered with improved rains starting February.

Rice import requirements forecast to increase considerably in 2017 on reduced output

The cereal import requirement in 2017 is forecast at about 1.8 million tonnes. It comprises about 1 million tonnes of wheat and 100 000 tonnes of maize. For rice, the import requirements are estimated at about 700 000 tonnes for 2017. This is well above the five-year average and considerably up from a mere 30 000 tonnes imported in 2016, when ample inventories and higher duties discouraged imports. In the first four months of 2017, the country has already imported 288 038 tonnes of rice, considerably above the 9 540 tonnes imported during the corresponding period of last year. In early January, with the aim to improve market availabilities through imports, the Government replaced all charges levied on imported rice of LKR 80 (USD 0.53) per kg with a Special Commodity Levy of only LKR 15 (USD 0.1) per kg. Successive decisions further lowered this rate to LKR 5 (USD 0.03) per kg until 30 May 2017.

Prices of rice increased in recent months and at high levels in June

Domestic prices of rice, the main staple food in the country, increased in recent months reflecting unfavourable prospects for the 2017 secondary yala crop. Overall, quotations were around 16 percent above their year-earlier levels in the first three weeks of June after the steep increases registered in the last quarter of 2016, when seasonal tightness was compounded by expectations of a sharply drought-reduced 2017 main crop. Wheat prices remained overall stable in recent months, reflecting adequate market availabilities, following the high level of imports.

Large numbers of people affected by lingering effects of drought

According to the 2017 FAO/WFP CFSAM report, the drought has impacted food consumption scores of households in the affected areas, with approximately about 900 000 people estimated to face food insecurity, mostly concentrated in the districts of Kurunegala, Moneragale, Vavuniya, Mannar and Jaffna. The impact was mainly in form of loss of income and reduced purchasing power among the most affected households, due to reduced production of paddy for sale, poor agricultural labour opportunities and increased retail prices. Daily agricultural labourers and rainfed paddy farming households were among the livelihood groups most affected. In addition, over 630 000 people were affected by floods in May 2017 mostly in the districts of Kalutara, Matara and Galle and Ratnapura.

The 2017 FAO/WFP CFSAM report highlights the need for the timely provision of seeds and planting equipment for the 2017/18 maha planting season from September to December. In addition, it is recommended to assist the poorest and most vulnerable with cash assistance to prevent negative coping strategies, such as building up unsustainable high debt levels and ensuring adequate food consumption among the most vulnerable.