A less frequented place!

Wednesday, 19 January 2011 00:01 -     - {{hitsCtrl.values.hits}}

With food prices soaring, the usually bustling Manning Market appears to be less frequented by the people. When Daily FT visited the Manning Market yesterday afternoon to get hands-on on the pulse and plight of the market our team of journalists were barred from doing their job.

Here is a view of the market from outside with less people as captured by Daily FT photojournalist Upul Abayasekara

Manning Mafia?

nDaily FT’s bid to report on the popular market thwarted by Traders Association

nSay Manning Market is out of bounds for journalists

nPre-approved reporting visits allow only interviews with selected traders

By Shezna Shums

The Manning Market will not allow independent journalists or photographers to speak with any of the traders or take photographs of the market.

The Manning Market Traders Association insists that any media personnel should obtain permission from the Colombo Municipal Commissioner’s Office if they want to speak with any of the private traders in the market.

Previously media personnel could freely speak with the traders as well as take photographs whenever needed and even the natamis could be interviewed.

When Daily FT’s journalist and photojournalist visited Manning Market yesterday to speak to stall holders and consumers as well as update the price list of vegetables and dry rations, they were reprimanded and told to get permission before interviewing anyone within the complex.

Furthermore, the Manning Market Traders Association also said that even if the journalists and photographers had CMC permission, they would only be allowed to speak to the traders that the association allows them to speak to.

Whatever photographs or issues regarding the Manning Market are to be reported, the Association stated that they would have to authorise who we are to speak to, the pictures we are to take and the issues that are to be reported from the Manning Market.

The Association which appears to be politically inclined to the current regime judging by pictures of top VVIPs adorning its office claimed that in the recent past some media outlets have misreported hence the new rule.

Observers lamented that Manning Market which should epitomise free market practices however chooses to be restrictive to the Fourth Estate and political influence has enabled them to brandish mafia-type powers.

Food prices rising

Original plans by the Government and Central Bank to reduce inflation this year are facing undercurrents due to recent floods as well as the global food supply and demand crises.

Despite concerns, the Central Bank, however, is of the view that its intervention via monetary policy isn’t necessary since the impact on prices would only be temporary, if at all.

However, even before the floods impact, a leading stock broker warned that the country was facing increased inflationary pressure and a senior Minister admitted the same. The Opposition parties are also stepping up pressure for relief to the masses over the rising cost of living.

Disaster Management Minister Mahinda Amaraweera has issued a warning of increase in food prices due to devastating floods in the north and east of the country.

The recent floods resulted in the destruction of thousands of acres of paddy lands and vegetable plots.

Amaraweera told a foreign news service that vegetable prices had already been affected due to the impact on growing areas that were swamped by unusually heavy monsoon rains.

“We have a buffer stock of rice that is good for three months. That means there will be no immediate impact on the price of rice, but vegetables are already going up in price,” Amaraweera told AFP.

The JVP-backed National Trade Union Centre (NTUC) held a public seminar yesterday to create awareness on the rising cost of living and the need for a salary hike.

NTUC Convener Samantha Koralearachchi said that people need to be made aware of the Government’s false promises with regard to salary increases and the real situation with regard to the cost of living.

Koralearachchi observed that the NTUC would continue with the awareness campaign and would also speak with other trade unions about the action to be taken to win the demands of the working masses.

Rising food prices has been a key theme in UNP’s ‘Graama Chaarika’ exercise as well.

The Opposition pressure comes after President Mahinda Rajapaksa recently instructed the Government to take appropriate urgent measures to face a food crisis.

Large extent of agricultural crops being damaged by the floods is the latest blow for a regime desirous of low inflation. Export bans placed by some of the world’s biggest producers of commodities to cope with domestic demand have unsettled global markets. This, analysts said, will pose fresh challenges.

Even before the floods hit the country, there had been signs of inflation being under pressure.

For example CT Smith Stockbrokers in a recent report said that despite the Central Bank’s belief that it can continue with its dovish monetary policy, several issues provide signs of increased inflationary pressures.

It listed recent electricity tariff increase, and rising commodity prices due to inclement weather in the country and global pressures as key reasons. Furthermore the budget deficit expanded 42% YoY (during October 2010) to Rs. 377 b (vs Rs. 266 b in 2009) while contracting for most during 2010 was another reason.

“However, we believe the measures adopted by the Government to reduce the systemic inefficiencies in all sectors will ease any upward inflationary pressures in the short term. Services rendered by the military forces in order to eliminate inefficiencies in the agricultural sector are also expected to contain the rise in the general cost of living, whilst also providing reasonable prices to farmers for their produce. Furthermore, the CBSL would likely monitor the core rate of inflation (i.e. the index without food and energy prices), as this index is not distorted by short term fluctuations in commodity prices. As a result, interest rates can be expected to remain low in the short term.

“Nevertheless we do not expect CBSL’s soft monetary policy stance to continue in the medium term, especially if prices continue to trend upward, requiring a tightening of monetary policy to curb rising inflation. When tightening the monetary policy we expect the CBSL to use other monetary policy tools such as ‘moral suasion’ before adjusting its benchmark policy rates. As a result, an upward policy rate adjustment cannot be ruled out in order to help maintain inflation below double digits in the medium term,” CT Smith Stockbrokers opined.

Central Bank Governor Nivard Cabraal in his Roadmap for 2011 and Beyond presentation identified maintaining inflation around mid-single-digit as a key challenge.

He said that significant price pressures have to be anticipated and intervention will be needed to mitigate these pressures through both demand management and favourable supply-side developments.

This challenge was after the Government being able to maintain relatively lower rate of inflation in 2010 though at latter stages there was upward pressure.

Annual average inflation reached 5.9% in December 2010, up from a 25 year low of end-year annual average inflation of 3.4% in 2009. Year-on-year inflation in December 2010 was 6.9% whilst core inflation was less volatile and declined to 6.3% on an annual average basis.

Central Bank in its last statement on inflation pointed out favourable domestic supply conditions due to improvements in the agriculture sector as well as increase in supply of food commodities, mainly from the North and East helped contain price pressure to a certain extent, although seasonal increases of prices of some commodities were experienced during some months of the year.

Analysts said that floods especially in the most affected provinces of East, North Central and Central are agrarian and much of their crop and fields have been affected. This will pose problems in supplies in the next few months. According to a United Nations Office for the Coordination of Humanitarian Affairs (OCHA) estimate, nearly 350,000 acres of paddy cultivation have been affected. Over 71% of paddy cultivation in Ampara District, 90% in Batticaloa District and 45% in Trincomalee District have been destroyed.

Disruptions to transportation in the past week on the other hand had caused loss of income for farmers in areas such as Jaffna as well. For example Daily FT Correspondent in Vanni said prices of plantains have come down to Rs. 15 and Rs. 20 per kilo from Rs. 50 and Rs. 70 previously while that of Kolikuttu variety had declined to Rs. 45 and Rs. 50 as against Rs. 100 and Rs. 120 earlier on.

Last year prices of commodities that are imported increased with the recovery in the global economy. But the impact of these price changes on the domestic inflation was arrested by import duty revisions. Continuity of this strategy in 2011 will have some revenue implications to the Government, analysts said adding global demand and supply challenges had forced producer countries to ration or suspend temporary exports. Several Asian countries are also facing food supply issues in addition to rising inflation.