Tuesday Mar 24, 2026
Tuesday Mar 24, 2026
Tuesday, 24 March 2026 02:29 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
Essential food importers have sought to calm fears of shortages ahead of the Sinhala and Tamil New Year, while cautioning that consumers should expect price increases of between 10-20% as higher fuel, freight, and insurance costs filter through the supply chain.
“The country would have uninterrupted supplies of staple goods despite mounting geopolitical risks in the Middle East,” Essential Food Commodities Importers and Traders Association (EFCITA) President G. Vinayagasundaram told the Daily FT.
“We had a meeting with the Trade Minister [yesterday] morning and there is no shortage of essential food commodities,” he said, following discussions with the Ministry yesterday.
With Sri Lanka being a net importer of essential foods and fuel, the Association said the combined impact of higher bunker fuel prices, surging war risk premiums, and a weakening rupee has lifted landed costs across a range of staples.
“We estimate that retail prices could rise by 10-20% in the coming weeks,” he said.
The announcement comes at a sensitive moment for the Government, which is already grappling with higher domestic fuel prices and broader cost-of-living pressures.
With global energy markets volatile and shipping risk recalibrated almost daily, the price of stability is rising, with economists warning ‘consumers are likely to feel it in their New Year shopping baskets.’
Perishable items such as onions, garlic, and potatoes are stocked for roughly two weeks at a time, with shipments arriving on a fortnightly cycle. “There is no shortage of those,” he said, noting that replenishment schedules remain intact for now.
However, Vinayagasundaram said the cost environment is deteriorating.
“Two consignments of lentils from Canada and Australia have been slightly delayed,” he said, as freight charges edge higher and insurers reassess risk exposure.
With conflict intensifying in the Middle East, some underwriters have either withdrawn cover or increased premiums for vessels transiting sensitive sea lanes. Shipping lines have also begun altering routes, lengthening transit times and adding to costs.
War risk insurance, which covers losses arising from war and terrorism, exclusions under standard marine and aviation policies, is key to global trade flows. Commercial vessels cannot operate without adequate cover; port authorities, charterers, and banks require proof of insurance before allowing cargo movements. As premiums rise, freight rates tend to follow.
Officials have sought to reassure the public that supply lines remain open, even as they acknowledge the vulnerability of an island economy dependent on international shipping routes that traverse the Indian Ocean and, ultimately, Middle Eastern chokepoints.
“As long as maritime corridors remain operational, Sri Lanka can secure cargoes, albeit at a premium,” he said, adding a prolonged disruption, however, would pose deeper challenges, particularly if insurers further tighten coverage or freight markets experience a sustained spike.
