Sri Lanka, which has suffered damage to its paddy crop, is seeking 1,00,000 tonnes rice from India where stringent restrictions have been imposed on exports of the foodgrain, reports PTI.

Sri Lankan importers want the country’s President Mahinda Rajapaksa to ask New Delhi to reduce minimum export price to enable its imports.

The island country reeling under the impact of damages to the paddy crop due to heavy rains in the growing area during the last fortnight. In November 2007, India acceded to the request of Rajapaksa and supplied 6000 tonnes of rice on an urgent basis to help the Island nation control spiralling prices.

India, confronted with one of the highest rates of inflation, wants to ensure adequate supplies of essential commodities including non-basmati rice and has raised its Minimum Export Price (MEP) of non-basmati rice to 1000 dollars a tonne from 650 dollars a tonne.

According to an essential commodities importing body, demand for rice imports from India was unforeseen as Sri Lanka was heading for bumper paddy production.

“But the sudden heavy rains during the last 20 days have damaged over 15,000 hectares of paddy crop in the growing areas of Sri Lanka”, it said. President of the Old Moor Street Traders Association K. Palaniandy told PTI that they have written to President Mahinda Rajapaksa urging him to impress upon New Delhi to bring down the minimum rice export price to facilitate imports from India.

“We write to request you to use your good offices with the Indian authorities and have this discriminatory floor price removed with immediate effect,” the letter said. Sri Lanka imported over 70,000 tonnes of rice from India in 2007.

Another report adds: Sri Lanka’s double-digit inflation is not driven by runaway global crude prices but by poor economic management, the International Monetary Fund (IMF) said yesterday.

The Indian Ocean island nation’s official year-on-year inflation rate rose to 24.0 percent in February, up from 21.6 percent in January and 7.1 percent a year earlier.

The government, which is battling over three decades of war with Tamil Tiger rebels, has blamed accelerating inflation on rising in global crude oil, commodity and foodgrain prices. However, the IMF report that studied Sri Lanka’s inflation in 2006 and 2007 found that “external shock” such as oil prices were only partly to blame.

“Since late 2006, Sri Lanka’s inflation has increased sharply relative to other economies in the region,” said the 28- page report titled “Pass-Through of External Shocks to Inflation in Sri Lanka.” “The sharp increase in inflation compared to other countries in Asia points out that increases in oil prices in the recent past cannot explain most of the increase in inflation in Sri Lanka.” The study found that most of the inflation in Sri Lanka is home-grown.

It said only 25 percent of recent consumer inflation could be explained by external factors with oil accounting for about six percent, import prices 11 percent and the exchange rate about 10 percent. The fund concluded that “domestic shocks likely play a more significant role on inflation in Sri Lanka,” indicating that better economic policies were needed to lower inflation.

“With external shock not playing a major role in influencing domestic inflation, domestic policies can be very important in containing inflation,” the report said. Sri Lanka’s fiscal policy reversed sharply in 2004, when the then- government began to hire more people into the already- bloated public sector and stopped privatising loss-making state entities, which lead to higher budget deficits.

In 2004, inflation, which was close to zero in the first quarter, was driven towards 20 percent by the end of the year with oil subsidies themselves being financed with central bank credit.