MUMBAI, April 2 (Reuters) – Indian traders have started loading 40,000 tonnes of rice for prompt shipment to Sri Lanka in the first major food aid since Colombo secured credit line from New Delhi, two officials told Reuters on Saturday.
The Indian Ocean island nation of 22 million people is struggling to pay for essential imports after a 70% 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 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 B.V. 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.”
Sri Lankan President Gotabaya Rajapaksa declared a nationwide public emergency late on Friday following violent protests over the country’s worst economic crisis in decades