Mumbai/Columba: Indian traders have started loading 40,000 tonnes of rice for rapid shipment to Sri Lanka in the first major food aid since Colombo secured a line of credit from New Delhi, Reuters told Saturday two managers.

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 ahead of a key festival in Sri Lanka.

Fuel is running low, food prices are skyrocketing and protests have erupted as the Sri Lankan government prepares for talks with the International Monetary Fund amid concerns over the country’s ability to repay its debt exterior.

India, the world’s largest rice exporter, agreed last month to provide the $1 billion line of credit to help ease crippling shortages of essential items including fuel, food and medicine .

Rice shipments could help Colombo lower rice prices, which have doubled in a year, adding fuel to unrest.

“Rice loading has started in southern ports,” BV said.

Krishna Rao, Managing Director of Pattabhi Agro Foods, which supplies rice to Sri Lanka State Trading (General) Corp under the Indian Credit Facility Agreement.

“We are loading containers first for fast shipments and ship loading will begin in a few days.” Sri Lankan President Gotabaya Rajapaksa on Friday evening declared a nationwide public emergency following violent protests over the country’s worst economic crisis in decades.

In Sri Lanka, President Gotabaya Rajapaksa on Friday evening declared a nationwide public emergency following violent protests over the country’s worst economic crisis in decades.

Rajapaksa said in a notification to the official gazette that he had taken a decision in the interest of public safety, protection of public order and maintenance of essential supplies and services.

Hundreds of protesters clashed with police and military on Thursday outside Rajapaksa’s residence in a suburb of the capital, Colombo.

Police on Friday arrested 53 people and imposed a curfew in and around Colombo to contain sporadic protests that have erupted over shortages of essential items, including fuel and other goods.

Tourism

The Indian Ocean island nation of 22 million people faces power outages for up to 13 hours a day as the government scrambles to secure foreign currency to pay for fuel imports.

The country’s lucrative tourism industry and remittances from foreign workers have been undermined by the pandemic, and public finances have been hit even harder by major tax cuts promised by Rajapaksa during his 2019 election campaign.

Ordinary Sri Lankans are also facing shortages and runaway inflation, after the country sharply devalued its currency last month ahead of talks with the International Monetary Fund for a loan scheme.

An alliance of 11 political parties has urged Rajapaksa to dissolve the cabinet and form an all-party government to tackle the crisis, local media said, in a country where India and China are competing to strengthen their influence.

Police used tear gas and water cannons to disperse crowds near Rajapaksa’s residence on Thursday, after setting fire to several police and army vehicles.

At least two dozen police officers were injured in the clashes, an official said, declining to comment on the number of injured protesters.

Tourism Minister Prasanna Ranatunge has warned that such protests will damage economic prospects. “The main problem facing Sri Lanka is the shortage of foreign currency, and protests of this nature will harm tourism and have economic consequences,” Ranatunge said.

The United Nations representative in the country, Hanaa Singer-Hamdy, called for restraint from all groups involved in the clashes. “We are monitoring developments and are concerned by reports of violence,” she said on Twitter.

Trading on the country’s stock market was suspended for a third consecutive day on Friday after the main blue-chip index fell 10%.

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