At least 1300 containers of essential food commodities and other items have piled up at the Colombo Port during the past three months mostly due to the inability of obtaining bank documents on letters of credit.

At least 1300 containers of essential food commodities and other items have piled up at the Colombo Port during the past three months mostly due to the inability of obtaining bank documents on letters of credit (LCs) as a result of the dollar payment crisis and also a limited workforce at the port, importers complained.

A spokesman of the Food Importers Association told the Business Times that the delay in the clearance of containers will create an artificial shortage leading to a price hike and it is essential to expedite the Customs clearance process.

Meanwhile on Friday Prime Minister Mahinda Rajapaksa directed the Customs and other authorities to immediately take action to release the containers of food stocks.

A top official of the Customs confirmed the delays adding that there was a backlog of a considerable number of containers at the port, and additionally the unloading operations have been stalled due to limited number of workers and staff on duty shifts.

He added that the department is following rules and regulations as well as directives of relevant authorities when clearing containers.However the backlog seems to be reducing rapidly at present, he said, adding that there was no delay in clearing containers of milk powder and pharmaceuticals brought into the island in recent shipments.

In a letter to the Treasury, importers have urged to consider shipments in transit, prioritising the shipments already arrived at the Colombo Port and grant approvals urgently as delayed clearance of cargo incurs demurrage continuously.

The letter also sought to consider releasing delivery orders on bank indemnity pending reference to load port/shipper as they may be unavailable to respond promptly resulting in delays in clearing cargo.

On the same lines, they requested to consider releasing delivery orders pending settlement of charges due to the inability of many importers to process cheques or payments on time and also waive storage charges and rent levied from shipping lines, consignees, importers and exporters.

The Customs official noted that a large group of small and medium scale importers had imported goods by depositing 10 percent and opening LCs and honoured the debt after selling the goods. The Association spokesman expressed the belief that the government will intervene and direct the Customs to release the containers struck at the port soon.

However he disclosed that there was a stock of essential food items sufficient for the country till the next month and the clearance process should be expedited without allowing some traders to restrict their wholesale market share. Meanwhile the Consumer Affairs Authority (CAA) has taken measures to stabilise the prices of essential (specified) commodities at reasonable levels, by provisions granted in the Consumer Affairs Authority Act No.9 of 2003.  According to section 18 of the Act where an item is specified as an essential commodity, an importer, manufacturer or trader has to obtain the prior written approval of the Authority before increasing the price of such item.

Acting under Section 19 of the Act, the Authority can intervene in situations of “excessive pricing” and determine a Maximum Retail Price for such commodity. Section 14 of the Act facilitates agreements on prices with manufacturers and traders.

15 items have been lifted as specified essential commodities including Milk Powder – Full Cream, LPG, Wheat Flour, Cement,, Chicken Meat, White Sugar, Dried Chilies, Big Onions, Red Onions, Dhal, Dried Sprats, Gram, Green Gram, Rice and Canned Fish.

Source : Sunday Times