Bulk imports by STO to stabilize food prices

The Cabinet on Wednesday moved to address escalating food prices by deciding to import essential food items in bulk through the State Trading Organization (STO).

This decision comes as the prices of common produce like apples and oranges have surged from MVR 4-5 to MVR 13, alongside significant increases in other basic foodstuffs.

President Dr. Mohamed Muizzu announced via X on Wednesday that these changes are part of his administration's policy to enhance national food security.

Beyond general food staples, the STO will now undertake bulk imports of 10 commonly consumed fruits and 10 vegetables, as well as lentils, eggs, and potatoes, for distribution in the Maldivian market.

STO has already begun selling oranges at MVR 35 per kilogram. The organization has a history of leveraging bulk purchasing to mitigate price volatility for frequently used commodities, recently importing coconuts in volume to counteract market price hikes.

Historically, governments, particularly during Ramadan, have utilized STO imports to curb inflationary pressures on food prices.

The current market-wide price inflation, affecting numerous goods including food items, is primarily attributed by traders to the appreciating cost of foreign currency for imports. The black market exchange rate for the US dollar, previously around MVR 16, has now sustained above MVR 20 for several weeks.

Rising food costs represent a significant public concern. Moreover, many businesses report a decline in commercial activity, citing a scarcity of development projects in the country as a factor hindering economic circulation and business viability.