Staple food prices slashed

The government has reduced prices of staple foodstuff to rates before a hike caused by an unpopular subsidy cut in 2016.

The prices will be dropped with effect on April 5, the State Trading Organisation’s boss announced Wednesday evening after the government relaxed price controls.

“The change was made after President Abdulla Yameen considered complaints from the public,” STO managing director Ahmed Shaheer told the press, assuring that the lower rates can be maintained.

• Sugar – MVR4 per kilo (down from MVR6.80)
• Rice – MVR3.98 per kilo (down from MVR6.76)
• Wheat flour – MVR2.98 per kilo (down from MVR5.26)

The economic development ministry also imposed limits for selling staples outside the capital. Accounting for transportation costs and profit, businesses can add no more than MVR1.02, MVR0.82 and MVR1.21 per kilo respectively in the northern, central and southern atolls.

The bulk of rice, flour and sugar sold in the Maldives is imported by the state-owned wholesaler and sold at prices set by the ministry.

Shaheer told reporters that the government spends MVR850,000 (US$55,200) a day to subside the staple foods.

On Monday, citing global oil price rises, STO increased the price of diesel by 30 laari to MVR10.41 per litre (US$0.70).

STO previously reduced the price of rice and sugar by 15 percent and wheat flour by 12 percent ahead of last year’s council elections.

Shaheer told the press at the time that the change was made possible due to better sourcing and because the government made arrangements for fast-tracking payments and lowering logistics costs.

The April 2017 prices were higher than October 2016 when the government decided to target food subsidies to the poor in a bid to rein in the budget deficit.