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Friday, 20 November 2015 00:05 - - {{hitsCtrl.values.hits}}
From Left The Ceylon Chamber of Commerce Chief Economist Anushka Wijesinha, the Ceylon Chamber of Commerce Import Section Chairman Dinesh De Silva and the Ceylon Chamber of Commerce Import Section Committee member Sanjeeva Samaranayake - Pic by Daminda Harsha Perera
By Shehana Dain
The Ceylon Chamber of Commerce Import section yesterday urged the Government to avoid taking ad hoc decisions over imports with sudden Maximum Retail Prices (MRP) enactments, which would hinder the already volatile trading economy.
The largest group of local importers yesterday asserted that imports should not be looked down upon as an inferior aspect of the economy. The association said the import sector was overregulated with regard to the rupee devaluation and subsequent price controls imposed in an unfair manner, which would discourage several good businesses and result in them moving move out of the economy very soon.
Speaking about the pharmaceuticals sector which is at a critical point, Committee Member of the Import Sector Sanjeewa Samaranayake stressed: “Rather than facilitating trade, some of the institutions have hampered trade. Currently with the devaluation, most of the importers have faced a lot of difficulties. They import in foreign currency and ultimately when they try to market it, they can’t try to increase prices to pass the devaluation of currency. As a result the key pharmaceuticals might go out of stock so the impact will be on the patients. The Consumer Affairs Authority and the newly-set-up National Medicine Regulatory Authority (NMRA) which have the power should push proactive decisions.”
Samaranayake also added that while the setting up of the NMRA was a good initiative, it lacked proper gearing. “The authority has not been accepting any new drug file since its establishment in July. The policymakers announced a formula that is 85%+ CIF (cost, insurance and freight) to arrive at MRP, but currently they have frozen all prices due to price control. This was done under the Consumer Affairs Authority Act by a gazette notification despite devaluation. This has led to a curtailment of some drugs in the market which might run out. Under the new act they have scrapped cosmetics and as a result that part of the industry is unregulated, which has led to so many issues,” he highlighted.
Moreover, the Consumer Affairs Authority brought in a new set of Maximum Retail Prices (MRPs) for six new essential consumer items on Tuesday which is to take effect today (20). This comes as an adverse signal to the importers as they struggle to go ahead with business as usual due to the profit margin squeeze. This was mainly due to the rupee devaluation, which saw a historically new low in November this year when it reached Rs. 142.59 subsequent to the CBSL directive to let the rupee float in September.
Speaking on what importers require to survive in the economy, CCC Import Section Chairman Dinesh De Silva commented: “We want fair trading. We urge our policymakers to give us quick solutions for our problems. Our future depends on the time it takes to solve an issue. The more time it takes, current and potential businessmen will be discouraged. This will have a negative impact on the whole economy. If everyone looks for jobs, entrepreneurs who offer us jobs will cease to exist. It’s very important that a favourable environment is created for our SMEs to grow. Import or export, there should be room for a business community to grow. We expect the Government to put together a positive setting which will help us in the long term.”
De Silva also noted that importers were expecting long-term healthy decisions from the upcoming Budget, with simplifications in duty structures and changing of outdated acts like the Sri Lanka Ports Authority Act and Customs Ordinance.
