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India starts supplying rice to Sri Lanka

India starts supplying rice to Sri Lanka

INDIAN traders are exporting 40,000 tons of rice to Sri Lanka in the first major food aid since Colombo secured a credit line from New Delhi.

The Indian Ocean island nation of 22 million people is struggling to pay for essential imports after a 70 per cent drop in foreign exchange reserves in two years led to a currency devaluation and efforts to seek help from global lenders.

The shipment of the staple comes before a key festival in Sri Lanka.

Fuel is in short supply, food prices are rocketing and protests have broken out as Sri Lanka's government prepares for talks with the International Monetary Fund amid concerns over the country's ability to pay back foreign debt.

India, the world's biggest rice exporter, last month agreed to provide the $1 billion (£760 million) credit line to help ease crippling shortages of essential items, including fuel, food and medicine.

The rice shipments could help Colombo bring down rice prices, which have doubled in a year, adding fuel to the unrest.

"Rice loading has started in southern ports," said BV Krishna Rao, managing director of Pattabhi Agro Foods, which is supplying rice to Sri Lanka State Trading (General) Corp under the Indian Credit Facility Agreement.

"We are first loading containers for prompt shipments and vessel loading will start in a few days."

The Indian rice will be available before demand jumps for Sri Lanka's mid-April New Year festival, said a Mumbai-based dealer with a global trading firm.

"Right now, only India can ship rice quickly. Other countries need weeks, India can deliver in days," the dealer said.

India's support comes after previous administrations had drawn Sri Lanka closer to China during the past decade, leading to unease in New Delhi.

The 40,000-ton shipment is part of 300,000 tons India will supply to Sri Lanka in the next few months, Rao said.

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